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Tea and Ready-to-Drink Tea in the United States: Retail and Foodservice Markets

Chapter 1: Executive Summary
Report Scope
Report Summary
Market Size, segmentation and forecast
Marketing opportunities
Is the family at stake?
Why not more men?
Has the health card been fully played?
Customization and usage frequency
Oh, single cup!
Make some tea with that brewer, would you?
Dare we envision the future?
Retail product trends
Foodservice menu trends
The Consumer: tea usage & brand trends
The Consumer: tea retail & foodservice channel usage trends
The Consumer: tea types/flavors drunk at home & restaurants
The Consumer: factors influencing restaurant tea order decision
Company and brand analysis
The retail market
By market segment
More about the players
Foodservice companies and brands
Green Mountain
Starbucks
Teavana
Argo Tea Café
Chapter 2: Market Size, Segmentation and Forecast
Summary analysis
Market size and forecast
Table 2-1: Tea Market Size and Forecast: Foodservice and Retail, 2014-2016
Tea sales at retail
Graph 2-1: Retail Tea Market Size, by Distribution Channel, 2014
Market segmentation
Graph 2-2: Retail Tea Segment Share, 2013
A mixed bag
Table 2-2: Retail Tea Sales and Share, by Segment, 2012-2013
Unit and volume trends
Table 2-3: Retail Tea Sales, Unit Sales and Volume Sales, by Segment, 2012-2013
Tea sales at foodservice
Table 2-4: Foodservice Tea Sales, 2011-2016
Tea per capita consumption trends
Graph 1-3: U.S. per Capita Tea Consumption Volume, 2002-2011
Analysis: tea price outlook
Summary pricing analysis
Table 2-5: Tea Commodity PPI & CPI Index and Percent Change: 2010-2014
At the commodity level: Tea pricing stability delivers growth potential
Graph 2-4: Producer Price Index, Commodities: Coffee, Tea, Soft Drinks and Juices, 2007-2014
On restaurant menus: Moderate price hikes suggest untapped pricing power
Table 2-6: Iced Tea & Hot Tea Menu Prices and Price Trends, 2007-2013
Branded tea driving increases?
By restaurant segment
Table 2-7: Iced Tea & Hot Tea Menu Price Trends, by Restaurant Segment, 2009-2013
At retail: coffee commodity declines passed on to consumer; tea stable
Graph 2-5: Consumer Price Index: Coffee, Tea, Carbonated & Noncarbonated Drinks and Juices,2007-2014
Tea imports: volume and value
Healthy growth in tea import value and volume
Table 2-8: Total Tea Imports, by Value, Volume and Price per Ton Trends, 2009-2013
Table 2-9: Tea Imports, by Tea Type: Value, Volume and Price per Ton Trends, 2009-2013
Table 2-10: Tea Imports, by Tea Type: Value & Volume Share Trends, 2009-2013
Chapter 3: Market Trends & Opportunities
Demographic opportunities: Focus on Family
Families are important to the tea market—don’t lose them!
Table 3-1: Regular Bagged/Packaged Tea & Instant Iced Tea Mix (HH Use/Daily Use) & RTD ICED Tea(Personal Use), by Age of Children in HH, 2013
Marketing strategy: Tea innovation for kids
Harnessing the power of the Millennial mom
Marketing strategy: Blog power
Demographic opportunities: Men as Tea Drinkers
Table 3-2: RTD Iced Tea Usage Penetration and Share, by Gender, 2013
Table 3-3: RTD Iced Tea Brands Drunk Most: Usage Penetration and Share, by Gender, 2013
Marketing strategy: Making tea macho
Leveraging tea attributes
The health factor
Marketing strategy: Tea as the healthy restaurant beverage
Personalized tea drinking
Marketing strategy: Tea enhancers
Tea as a replacement for coffee
Graph 3-1: Times per Month Consumers Drink Tea and Coffee, by Usage Frequency
Graph 3-2: Factors Influencing Decision to Order Tea & Coffee Type at Restaurant, Ranked by
Importance
Leveraging the positive side of caffeinated tea
Formulation trends
Single-serve/pod brewing
Graph 3-3: Prevalence of At-Home Coffee/Tea Electric Brewing Equipment, by Equipment Type, 2014
Graph 3-4: Percentage of At-Home Single-Serve Pod Brewer Use: Coffee, Tea, or Other Hot Beverage,2014
Graph 3-5: Percentage of At-Home Single-Serve Pod Brewer Use: Coffee, Tea, or Other Hot Beverage,
Among All Adults, Monthly Tea Drinkers & Daily Tea Drinkers, 2014
Lions, and tigers, and all-in-one brewers? Oh, my!
While you’re at it, can you make a Coke, too, please?
Chapter 4: Retail Product Trends
Summary analysis
The premiumization of tea
Quality associations
Honest Tea
Rishi Tea
Third Street Inc.
Unique ingredients and flavor profiles
The Republic of Tea
Herbal Water
Functional benefits
Tadin Herb & Tea Company
East West Tea Company
The Republic of Tea
Innovations in form
Minimal processing
Single-serve cups
Redco Foods Inc.
Celestial Seasonings
Liquid concentrates
Redco Foods
Nestea
Blending tea
Tetley USA
R.C. Bigelow
Amazon Beverages
2013 best new product awards
Chapter 5: Foodservice Menu Trends
Summary analysis
Tea is a top trend
Specialty iced tea more than perennial favorite
Tea as an ingredient is gaining momentum
Beverage variety trends
Iced tea is challenged to oust soda as most popular on beverage menus
How about a little booze?
Table 5-1: Top Beverage Varieties: Percent of Restaurants Featuring: by Restaurant Segment, 2013
Casual restaurants adding Chai tea to menus
Table 5-2: Top Beverage Varieties: Change in Percent of Restaurants Featuring: by Restaurant Segment,2009-2013
Soda commands largest share of beverage menu
Table 5-3: Top Beverage Varieties: Beverage Menu Share: by Restaurant Segment, 2013
Growth in tea and other “healthy” beverages
Table 5-4: Top Beverage Varieties: Change in Beverage Menu Share: by Restaurant Segment, 2013
Tea flavor & variety trends
Hot tea widely available
Table 5-5: Top Hot Tea Varieties: Percent of Restaurants Featuring: by Restaurant Segment, 2013
Expansion in variety of hot tea
Table 5-6: Top Hot Tea Varieties: Change in Percent of Restaurants Featuring: by Restaurant Segment,2013
Raspberry and sweet tea are the most popular iced tea varieties
Table 5-7: Top Iced Tea Varieties: Percent of Restaurants Featuring: by Restaurant Segment, 2013
QSRs embrace innovative iced tea varieties
Table 5-8: Top Iced Tea Varieties: Change in Percent of Restaurants Featuring: by Restaurant Segment,2013
Snapple brand iced tea has the highest restaurant penetration
Fewer restaurants featuring iced tea brands
Table 5-10: Top Iced Tea Brands: Change in Percent of Restaurants Featuring: by Restaurant Segment,2013
Chapter 6: The Consumer: Tea Usage & Brand Trends
Summary analysis
Household and personal tea use
Trended tea usage: 2008-2013
Table 6-1: Household Bagged/Loose & Instant Iced Tea Mix Usage, Personal RTD Iced Tea Use,2008-2013
Tea use, by demographics
Table 6-2: Household Bagged/Loose & Instant Iced Tea Mix Usage, Personal RTD Iced Tea Use: by Race/Ethnicity, HH Income, Number/Age of Children in HH & Nielsen Region, 2013
Trended HH tea usage frequency
Table 6-3: Household Tea Usage Frequency: Bagged/Loose & Instant Iced Tea Mix, 2008-2013
Tea usage frequency, by demographics
Table 6-4: Household Tea Usage Frequency: Bagged/Loose & Instant Iced Tea Mix: By Race/Ethnicity,
HH Income, #/Age of Children in HH & Nielsen Region, 2013
Personal tea usage frequency
Graph 6-1: Times per Month Consumers Drink Tea, by Usage Frequency
The majority of tea drinkers consume several cups per day
Graph 6-2: Daily Tea Drinkers: Cups of Tea Drunk per Day
Women are more likely to drink more cups per day than men
Table 6-5: Cups of Tea Drunk Monthly & Daily, by Gender, 2014
Under-45s are high frequency tea drinkers
Table 6-6: Cups of Tea Drunk Monthly & Daily, by Age, 2014
Personal tea usage skews toward the more affluent
Table 6-7: Cups of Tea Drunk Monthly & Daily, by HH Income, 2014
Asians are the quintessential tea consumer
Table 6-8: Cups of Tea Drunk Monthly & Daily, by Race/Ethnicity, 2014
Northeasterners tend to be daily tea drinkers
Table 6-9: Cups of Tea Drunk Monthly & Daily, by Region, 2014
Students who are daily tea drinking are avid consumers
Table 6-10: Cups of Tea Drunk Monthly & Daily, by Employment Status, 2014
Household and personal tea use by type Bagged/loose tea
Table 6-10: Household Tea Usage: Bagged/Loose (Hot & Iced), Regular & Decaffeinated Loose,Regular & Decaffeinated Bagged & Tea Flavors: With Usage Preference Ratios, 2008-2013
Hot tea vs. iced tea, by demographics
Table 6-11: Household Bagged/Loose Tea Usage (Hot & Iced), With Usage Preference Ratios: by
Race/Ethnicity, HH Income, Number/Age of Children in HH & Nielsen Region, 2013
Regular vs. decaffeinated tea, by demographics
Table 6-12: Household Bag/Loose Tea Usage (Regular & Decaffeinated), With Usage Preference Ratios:by Race/Ethnicity, HH Income, Number/Age of Children in HH & Nielsen Region, 2013
Regular vs. decaffeinated: Loose tea, by demographics
Table 6-13: Household Loose Tea Usage (Regular & Decaffeinated), With Usage Preference Ratios: by Race/Ethnicity, HH Income, Number/Age of Children in HH & Nielsen Region, 2013
Regular vs. decaffeinated: Bagged tea, by demographics
Table 6-14: Household Bag Tea Usage (Regular & Decaffeinated), With Usage Preference Ratios: by Race/Ethnicity, HH Income, Number/Age of Children in HH & Nielsen Region, 2013
Instant iced tea
Table 6-15: Household Instant Iced Tea Mix Usage: Presweetened w/ and w/o Sugar & Unsweetened:
With Usage Preference Ratios, 2008-2013
Presweetened vs. Unsweetened tea, by demographics
Table 6-16: HH Instant Iced Tea Mix Usage: Presweetened w/ and w/o Sugar & Unsweetened: W/ Usage Preference Ratios: by Race/Ethnicity, HH Income, #/Age of Children in HH &
Nielsen Region, 2013
RTD iced tea
Table 6-17: Ready-to-Drink Tea Usage: Presweetened w/ and w/o Sugar & Unsweetened: With
Usage Preference Ratios, 2008-2013
Household and personal tea use by brand
Bagged/loose tea brand usage
Table 6-18: Household Bagged/Loose Tea Usage, by Brand, With Usage Preference Ratios, 2008-2013
Bagged/loose tea brand usage, by demographics
Table 6-19: Household Bagged/Loose Tea Usage, Top 8 Brands: by Race/Ethnicity, HH Income,
#/Age of Children in HH & Nielsen Region, 2013
Table 6-20: Household Bagged/Loose Tea Usage, Other Brands/Store Brand: by Race/Ethnicity,
HH Income, #/Age of Children in HH & Nielsen Region, 2013
Trended instant iced tea mix brand usage
Table 6-21: Household Instant Iced Tea Mix Usage, by Brand, With Usage Preference Ratios, 2008-2013
Instant iced tea mix brand usage, by demographics
Table 6-22: Instant Iced Tea Mix Usage, by Brand/Store Brand: by Race/Ethnicity, HH Income,
#/Age of Children in HH & Nielsen Region, 2013
Trended RTD iced tea brand usage
Table 6-23: Personal Ready-to-Drink Iced Tea Usage, by Brand, With Usage Preference Ratios,2008-2013
RTD Iced tea brand usage, by demographics
Table 6-24: RTD Iced Tea Usage, Top 5 Brands: by Race/Ethnicity, HH Income, #/Age of Children in HH & Nielsen Region, 2013
Table 6-25: RTD Iced Tea Usage, Other Brands/Store Brand: by Race/Ethnicity, HH Income,
#/Age of Children in HH & Nielsen Region, 2013
Chapter 7: The Consumer: Tea Retail & Foodservice Channel Usage Trends
Summary analysis
Buying tea for at-home use
Getting tea to drink now
Tea forms bought for home use in the past 12 months, by channel
Graph 7-1: Tea Forms Bought for Home Use in the Past 12 Months
Table 7-1: Cross-Use of Tea Forms Bought for Home Use in the Past 12 Months
Tea retail distribution, by tea form
Graph 7-2: Tea Bought for Home Use, by Form and Retail Distribution: Tea Users, 2014
Another view
Graph 7-3: Tea Bought for Home Use, by Form and Retail Distribution: Users of Respective Tea Form, 2014
Demographic analysis
Table 7-2: Tea Bought for Home Use in the Past 12 Months, by Form & Retail Distribution Channel, by Age, 2014
Table 7-3: Tea Bought for Home Use in the Past 12 Months, by Form & Retail Distribution Channel, by HH Income
Table 7-4: Tea Bought for Home Use in the Past 12 Months, by Form & Retail Distribution Channel, by Region
Tea gotten for immediate consumption in past 12 months, by channel
Graph 7-4: Tea Gotten for Immediate Consumption in Past 12 Months, by Food Retail & Foodservice Channel, 2014
Demographic analysis
Coffeehouses in solid position
Table 7-5: Tea Gotten for Immediate Consumption, by Food Retail & Foodservice Channel, by HH Income, 2014
QSRs missing the youth boat?
Table 7-6: Tea Gotten for Immediate Consumption, by Food Retail & Foodservice Channel, by Age, 2014
Employment and need state
Table 7-7: Tea Gotten for Immediate Consumption, by Food Retail & Foodservice Channel, by Employment Status, 2014
Regional skew
Table 7-8: Tea Gotten for Immediate Consumption, by Food Retail & Foodservice Channel, by Region,2014
Chapter 8: The Consumer: Tea Types/Flavors Drunk at Home & Restaurants
Tea Drunk in Past 12 Months, by Type/Flavor
Tea type drunk most
Graph 8-1: Tea Drunk Most, by Tea Type/Flavor
At home versus at restaurants
Graph 8-2: Tea Drunk at Home & at Restaurant in Past 12 Months, by Tea Type/Flavor, 2014
Gender differences
Table 8-1: Tea Type/Flavor Drunk at Home & Restaurant in Past 12 Months, by Gender, 2014
Age differences
Table 8-2: Tea Type/Flavor Drunk at Home & Restaurant in Past 12 Months, by Age, 2014
HH income differences
Table 8-3: Tea Type/Flavor Drunk at Home & Restaurant in Past 12 Months, HH Income, 2014
Regional differences
Table 8-4: Tea Type/Flavor Drunk at Home & Restaurant in Past 12 Months, by Region, 2014
Race/ethnicity differences
Table 8-5: Tea Type/Flavor Drunk at Home & Restaurant in Past 12 Months, by Race/Ethnicity, 2014
Chapter 9: The Consumer: Factors Influencing Restaurant Tea Order
Decision
Factors influencing decision to order type of tea at restaurant
Taste and getting that specific flavor
Not brand sensitive
Did someone say low price? Does it matter?
“To your health!” “Hey, not so loud . . .”
What time is it?
Graph 9-1: Factors Influencing Decision to Order Type of Tea at Restaurant, Ranked by Importance, 2014
Generations don’t always separate us
Table 9-1: Factors Influencing Decision to Order Type of Tea at Restaurant, Ranked by Importance, by Age, 2014
Yes to lower price
Table 9-2: Factors Influencing Decision to Order Type of Tea at Restaurant, Ranked by Importance, by HH Income, 2014
Race/ethnicity
Table 9-3: Factors Influencing Decision to Order Type of Tea at Restaurant, Ranked by Importance, by Race/Ethnicity, 2014
Chapter 10: Retail Company and Brand Analysis
Summary analysis
The retail market
By market segment
More about the players
Segment snapshot
Graph 10-1: Retail Tea Segment Share, 2013
Leading retail tea marketers
Graph 10-2: Top Retail Tea Marketers, Share and Sales, 2013
Market leaders challenged to grow sales and share…
Table 10-1: Top Retail Tea Marketers, by Marketer and Tea Category, 2013
Consumer usage trends point to longer term growth
Tea marketers and brands by category
Top RTD canned and bottled tea marketers
Table 10-2: Top Canned/Bottled Retail Tea Marketers, by Marketer and Brand, 2013
Top bag/loose tea marketers
Table 10-3: Top Bag/Loose Retail Tea Marketers, by Marketer and Brand, 2013
Top RTD refrigerated tea marketers
Table 10-4: Top Refrigerated Tea Marketers, by Marketer and Brand, 2013
Top instant tea marketers
Table 10-5: Top Instant Tea Marketers, by Marketer and Brand, 2013
Pepsi Lipton Tea Partnership
Table 10-6: Pepsi Lipton Tea Partnership Sales, by Tea Category and Brand, 2013
Leveraging the refreshment of RTD Lipton tea
Ferolito, Vultaggio & Sons
Table 10-7: Ferolito Vultaggio & Sons Sales, by Tea Category and Brand, 2013
AriZona offers steady innovation
Unilever
Table 10-8: Unilever Sales, by Tea Category and Brand, 2013
Unilever uses innovation and marketing to boost interest in flagship black tea
Dr Pepper/Snapple
Table 10-9: Dr Pepper/Snapple Sales, by Tea Category and Brand, 2013
Snapple engages consumers with Real Fact marketing
SnapTea offers value positioning
Coca-Cola Co.
Table 10-10: Coca-Cola Co. Sales, by Tea Category and Brand, 2013
Gold Peak continues to grow
Source: goldpeaktea.com
Premium positioning of Honest Tea
Fueling sales with Fuze
Chapter 11: Foodservice Companies and Brands
Green Mountain Coffee Roasters, Inc.
Growth strategy
Brewers
Beverage products
K-cup tea sales gaining momentum
Table 11-1: Green Mountain K-Cup Tea Retail Sales and Unit Sales, by Brand, 2012-2013
Table 11-2: Green Mountain Coffee & Tea K-Cup Retail Sales, 2012-2013
Licensing/partner strategy
No license: no Keurig 2.0
Make mine carafe sized
Platform expansion
Cold brewing with Coca-Cola
Channel expansion
At home versus away from home
Table 11-3: Keurig Brewer Placements & Attachment Rate, by Location Type, 2013
At home
Table 11-4: Keurig Brewer Penetration, by Region, 2013
Away from home
Sales performance
Table 11-5: Green Mountain Coffee Roasters, Selected Metrics, 2009-13
Starbucks Corporation
Competitive differentiation: Store experience
Menu trends: beverage category expansion
Graph 11-1: Starbucks Entrée, Side, Dessert, Beverage & Appetizer Menu Share, 2013
Menu trends: tea in the mix
Table 11-6: Starbucks Food and Beverage Menu Share, by Menu Item Type
Acquisition trends: Turning to tea
Upscale reimaging
Tea growth strategy: Cross-channel development
Menu trends: Addressing the food challenge and building food share
Table 11-7: Starbucks Company-Operated Stores: Revenue Mix by Product Type, 2009-2013
Sales performance
Table 11-8: Starbucks U.S. and Global Company-Owned & Licensed Locations, 2012-13
Table 11-9: Starbucks Revenue: Restaurant & Retail/Foodservice, 2009-2013; Product Type & Geography, 2011-2013
Table 11-10: Starbucks Comparable Sales, Transaction & Ticket Growth, by Geography, 2009-2013
Teavana
Store experience
Teas and other products
Sales and growth
Table 11-11: Teavana Net Sales, Comparable Sales, Total Store & Sales by Product Category, 2009-2013
Argo Tea Café
Target: Upscale cache
The campus connection
On the menu
At retail
Marketing & promotional activity
Health focus
Table 11-12: Argo Tea Café, Selected Signature Drinks, 2014
Appendix
Methodology
Consumer survey methodology
Market size and forecast
Terms and definitions
Varieties of tea
Restaurant categories

Tea and Ready-to-Drink Tea in the United States: Retail and Foodservice Markets

Make no mistake, coffee is big business: Packaged Facts’ Coffee and Ready-to-Drink Coffee in the United States: The Retail and Foodservice Markets forecasts coffee sales in the retail and foodservice industries to exceed $48 billion in 2014. From those sales, $11.2 billion will be from retail sales and $37 billion from sales at foodservice establishments.

For coffeehouse and quick-service restaurant operators, the next step to increasing profits is attaching food to coffee sales. Brands are expanding their beverage menu and developing new food menus to provide customers with the perfect energized pairing. More of these coffee industry brands are branching into other beverages, which has the potential to dampen coffee sales growth. But despite the variety, hot coffee is still the go-to beverage with 75% of coffee/coffee drink users saying “hot coffee” is still the beverage they choose most often. The start of utilizing loyalty programs has placed coffeehouses in a position to blend social media, mobile technology, and rewards together. Our research suggests that coffeehouse users are open to the idea of social media and brand interplay, and when it comes to adapting to these new technologies, these consumers are able to fully grasp the programs.

For coffee retailers, the increased use of single-serve coffee brewers are changing the retail coffee industry. The idea of single-serve coffee is also creating a change for away-from-home coffee consumption. Coffee co-branding has also moved beyond coffee shops that partner with other indulgent brands. Retail coffee manufacturers are building off coffeehouse expectations to create a wide variety of options for coffee consumers. But industry innovation continues: instant coffee marketers are working to breathe life into new quality products underscored by variety, functionality, and value positioning.

Scope and Methodology

Coffee and Ready-to-Drink Coffee in the United States: The Retail and Foodservice Markets provides industry participants with valuable insight on coffee and ready-to-drink beverage trends that are shaping this highly competitive market. The sales content includes:

1) a market size and forecast for coffee sales at retail and foodservice, along with retail sales analysis by coffee segment and by distribution channel;

2) detailed company analysis of the retail coffee market, by market segment (ground/whole bean, instant, instant flavored, espresso/cappuccino, and ready-to-drink coffee) and by brand;

3) detailed company analysis of leading coffee foodservice participants, including Dunkin’ Donuts, Green Mountain Coffee Roasters, McDonald’s, Starbucks, Caribou Coffee and Tim Hortons, with a focus on how coffee fits into each company’s competitive and growth strategies.

Also included in this report is:

  • Identifies key marketing opportunities for coffee, supported by consumer survey data, product examples and other metrics. In particular, we focus on food and beverage pairing, organic growth opportunities, growing sales of iconic coffee retail brands, and harnessing loyalty programs.
  • Using proprietary survey results, assesses the degree which consumers get different coffee types for home use from different retail distribution channels; similarly, we assess the degree they get coffee for “immediate consumption” from a variety of foodservice channels. Comparative analysis is included.
  • Explores coffee retail product trends that center on bringing the coffeehouse experience into the consumers’ home (with an emphasis on co-branding); sourcing; convenience; and instant coffee, liquid concentrate and single-serve pod innovation.
  • Assesses coffee menu trends, focusing on menu item penetration by restaurant segment, including beverage varieties, coffee flavors/types and coffee brands.
  • Assesses household and personal coffee usage and usage frequency trends, including ground, whole bean, single-serve/pod, instant and RTD coffee; and household and personal coffee brand usage and trends, ground, whole bean, single-serve/pod, instant and RTD coffee. To help gauge brand loyalty, we also trend brands’ “usage preference ratios,” the ratio showing that consumers drink that brand “most” over drinking that brand “also.”
  • Using proprietary survey results, provides comparative analysis on the degree to which consumers drink different flavors and types of coffee at home and at restaurants, as well as identifying which coffee types/flavors consumers drink most often.
  • Drawing from consumer survey “ranking” responses, identifies the relative importance consumers place on factors such as taste, getting a specific brand, low price, and time of day when deciding to order coffee at a restaurant.


Market Insights: A Selection From The Report

  • The grocery channel continues to reign as the retail coffee sales champion, with an estimated $5.26 billion in 2013 sales.  
  • In 2013, total IRI-based multi-channel sales of coffee were up 6% from 2012.
  • We expect coffee sales at foodservice establishments to increase steadily during 2014-2016, driving by incremental growth in foodservice establishment visits, continued breakfast platform build outs and improvements where coffee continues to play a central role, and pricing increases driven by further transition to “premium” coffee as well as increasing coffee drink variety.
  • Nearly 61% of all households use ground or whole bean coffee in 2013.
  • While innovation is an integral factor in keeping consumers engaged, opportunities for organic growth will be achieved by increasing replenishment cycles, developing new usage opportunities, and increasing price per cup. In this regard, marketers can leverage the social experience that goes along with coffee as a lifestyle beverage. The industry can also continue to expand beyond the morning daypart to develop new usage opportunities, as well as harness coffee’s positive health attributes in tandem with functional positioning.
  • A driving factor in retail coffee innovation and marketing is bringing the coffee shop experience into the consumers’ home by utilizing familiar brands, an abundance of variety, and high-quality retail products.
  • Co-branding of retail coffee goes beyond coffee shop brands to align with other indulgent brands. Such partnerships create brand recognition and cross-merchandising opportunities. The bold, rich flavor of coffee provides a natural balance to indulgent sweet notes—making partnerships with decadent, palette-pleasing brands a natural fit.
  • The premiumization trend is alive and well as evident in the significant growth of organic, house blend, premium, fair trade, and Ethiopia coffees from 2009-2013. These types of coffees are gaining traction because they communicate “quality.”
  • Sourcing has become a key element in coffee premiumization.
  • Ready-to-drink coffee beverages exploit the convenience factor by simply removing the need for a brewer. These grab-and-go beverages capture impulse and immediate consumption opportunities with single-serve product placement at beverage coolers, but also allow for multiple-serve product usage at home.
  • Instant coffee marketers are trying to breathe life into the category with innovations that focus on quality products underscored by variety, functional, and value positioning. Liquid concentrates are emerging in the category.
  • Iced coffee is most prevalent among midscale restaurant operators. Iced coffee beverages offer a good opportunity for these operators to broaden coffee beverage consumption across all dayparts. Moreover, there’s opportunity to communicate premium quality with customized flavor opportunities.
  • The 18-29 demographic shows a preference for coffeehouse brands, such as Starbucks. This youngest set of coffee drinkers also over index in use of Gevalia ground/whole bean coffee, which could be due to the company’s strong Internet presence and direct-to-consumer home delivery service.
  • Hispanic households are 11% more likely that average to drink coffee.
  • Some 9% of monthly coffee drinkers use the mail/internet to purchase single-serve/pod coffee, where they can shop most conveniently to obtain competitive pricing on an easy-to-ship and easy-to-receive single-serve/pod coffee brands.

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