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Coffee - US - September 2014

“Coffee manufacturers face increased competition both from within their own category and from other beverages. Consumers are embracing the choice and variety of coffee options and from other beverages, but with a slowly improving economy, manufacturers will be challenged to maintain consumer interest in in-home coffee consumption.”
– Elizabeth Sisel, Beverage Analyst

This report will cover the following key topics:

  • Pods could resonate with older consumers, though perhaps not single-cup
  • Energy drinks emerge as coffee substitute – can they take over coffee’s turf?
  • Can RTD coffees expect the same growth as single-cup?
With younger consumers embracing an ever-increasing variety of coffee drinks, the category is as fractured along generational lines as ever. Millennials and Generation X, on one side, are experimenting with a range of formats, origins, and flavor additions.
 
At the same time, older, more traditional coffee drinkers seek roasted, brand name coffee, but a host of options will be targeting these consumers.
 

Overview:
  • Quest for flavor and convenience will fuel the coffee category’s continued growth.
  • Coffeehouse flavors could inspire in-home options.
  • Consumers of all types drink less coffee as the day progresses.
  • Multi-serve drip coffee makers remain the norm in most households.
  • Convenience, ease of use lead reasons behind choice of coffee machine.
  • Consumers aged 18-34 most likely to drink single-cup, RTD coffee.

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Abbreviations and terms
                • Abbreviations
                  • Terms
                  • Executive Summary

                    • Overview
                      • Quest for flavor and convenience will fuel the coffee category’s continued growth
                        • Figure 1: Total US sales and fan chart forecast of coffee, at current prices, 2009-19
                      • Coffeehouse flavors could inspire in-home options
                        • Figure 2: Top 10 coffee types menued at coffeehouses and donut shops, by incidence, Q3 2010-Q3 2013
                      • Consumers of all types drink less coffee as the day progresses
                        • Figure 3: Time of day for consuming coffee prepared at home, by any consumption – Types of coffee, June 2014
                      • Multi-serve drip coffee makers remain the norm in most households
                        • Figure 4: Coffee brewer ownership, by generations, June 2014
                      • Convenience, ease of use lead reasons behind choice of coffee machine
                        • Figure 5: Reasons for purchasing preferred coffee brewer, by gender and age, June 2014
                      • Roast coffee share slips, while single-cup gains
                        • Figure 6: Total US retail sales and forecast of coffee, by segment, at current prices, 2009-19, in millions
                      • Single-cup coffee, RTD companies offset declines from roast, instant manufacturers
                        • Figure 7: MULO market share of coffee sales, by leading companies, 52 weeks ending June 15, 2014
                      • Consumers aged 18-34 most likely to drink single-cup, RTD coffee
                        • Figure 8: Personal coffee consumption prepared at home – Any consumption, by gender and age, June 2014
                      • Potential for healthy coffee innovation
                        • Figure 9: Any Agreement with attitudes and behaviors toward coffee, by any consumption of coffee, June 2014
                      • What we think
                      • Issues and Insights

                          • Pods could resonate with older consumers, though perhaps not single-cup
                            • Issue
                              • Insight: Forthcoming pod carafe machines could entice older consumers to the pod
                                • Energy drinks emerge as coffee substitute – can they take over coffee’s turf?
                                  • Issue
                                    • Insight: Coffee can serve as a natural energy booster
                                      • Can RTD coffees expect the same growth as single-cup?
                                        • Issue
                                          • Insight: RTDs should capitalize on Millennial interest with flavorful coffees that embrace other attributes
                                          • Trend Applications

                                              • Trend: Who are the Joneses?
                                                • Trend: Minimize Me
                                                  • Trend: Secret, Secret
                                                  • Market Size and Forecast

                                                    • Key points
                                                      • Coffee growing but slowing
                                                        • Figure 10: Total US sales and forecast of coffee, at current prices, 2009-19
                                                        • Figure 11: Total US sales and forecast of coffee, at inflation-adjusted prices, 2009-19
                                                      • Single-cup propels the coffee category to continued growth
                                                        • Figure 12: Total US sales and fan chart forecast of coffee, at current prices, 2008-18
                                                      • Forecast methodology
                                                      • Market Drivers

                                                        • Key points
                                                          • Commodity prices of coffee rise dramatically
                                                            • Figure 13: Monthly average price for raw coffee supplies, January 2012-June 2014
                                                          • Millennials growing and embracing quick, convenient options
                                                            • Figure 14: US population, by generation share, 2014
                                                          • Diverse population drinking a diversity of coffee drinks
                                                            • Figure 15: Personal daily consumption of coffee at home, by volume (mean), by race/ethnicity origin, June 2014
                                                        • Competitive Context

                                                          • Key points
                                                            • Energy drinks, CSDs compete for coffee’s caffeine benefit
                                                              • Figure 16: Reasons for drinking energy drinks, by age, June 2014
                                                            • Foodservice steals in-home coffee occasions by promoting premium and specialty coffee drinks
                                                              • Figure 17: Agreement with attitudes and behaviors toward coffee, by any consumption* of coffee, June 2014
                                                              • Figure 18: Top 10 coffee types menued at coffeehouses and donut shops, by incidence, Q3 2010-Q3 2013
                                                              • Figure 19: Drivers for coffeehouses and donut shops, by day parts, September 2013
                                                            • Tea has caffeine plus a healthier reputation
                                                              • Figure 20: Attitudes and behaviors toward tea, by generations, any agree responses May 2014
                                                          • Segment Performance

                                                            • Key points
                                                              • Single-cup and RTD drive coffee category growth
                                                                • Figure 21: Total US retail sales of coffee, at current prices, 2012 and 2014
                                                                • Figure 22: Total US retail sales and forecast of coffee, by segment, at current prices, 2009-19
                                                              • Roast coffee’s loss is single-cup’s gain
                                                                • Figure 23: Total US Retail sales of roast coffee, 2009-19
                                                              • Single-cup growth slows but will still overtake roast coffee within three years
                                                                • Figure 24: Total US retail sales and forecast single-cup coffee, at current prices, 2009-19
                                                              • RTD sales value grows 26% vs 2012, second only to single-cup
                                                                • Figure 25: Total US retail sales and forecast of ready-to-drink coffee, at current prices, 2009-19
                                                              • Instant coffee continues to erode
                                                                • Figure 26: Total US Retail sales of instant coffee, 2009-19
                                                                • Figure 27: Household usage of instant coffee, by brand, February 2008-March 2014
                                                                • Figure 28: Total US retail sales and forecast of instant coffee, at current prices, 2009-14
                                                                • Figure 29: Household usage of instant coffee, February 2008-March 2014
                                                                • Figure 30: Household volume usage of instant coffee, February 2008-March 2014
                                                                • Figure 31: Household usage of instant coffee, by flavors, February 2009-March 2014
                                                            • Retail Channels

                                                              • Key points
                                                                • Supermarkets and other channels vie for coffee sales
                                                                  • Figure 32: Total US retail sales of coffee, by channel and market share, at current prices, 2012 and 2014
                                                                • Coffee sees distinctly more activity in other retail channels than most other food and drink
                                                                  • Figure 33: Total US retail sales of coffee, by channel, at current prices, 2009-14
                                                                • Natural grocery stores coffee sales grew 20%, more than any other retail channel
                                                                  • Figure 34: Natural supermarket sales of coffee and coffee substitutes, at current prices, 2012-14*
                                                                  • Figure 35: Natural supermarket sales of coffee, by segment, 2012 and 2014*
                                                                • Single-cup pods begin to emerge in natural supermarkets
                                                                  • Figure 36: Natural supermarket sales of ground coffee, by packaging, 2012 and 2014*
                                                              • Leading Companies and Brand Analysis

                                                                • Key points
                                                                  • Roast coffee sales tumble as single-cup continues upward climb
                                                                    • Figure 37: Folgers, “Folgers Gourmet Selections K-Cup Packs Commercial,” TV Ad, August 2014
                                                                    • Figure 38: MULO sales of coffee at retail, by leading companies, rolling 52 weeks 2013 and 2014
                                                                  • Roast coffee brands shrink
                                                                    • Figure 39: Maxwell House, “GOOD,” TV Ad, April 2014
                                                                    • Figure 40: Seattle’s Best, “Seattle's Best Coffeehouse Blend is the Taste That Duncan Loves,” TV Ad, March 2014
                                                                    • Figure 41: MULO sales of roast coffee at retail, by leading companies, rolling 52 weeks 2013 and 2014
                                                                  • Single-serve espresso cups, store brands drive sales in the single-serve segment
                                                                    • Figure 42: Gevalia, “Cheers,” TV Ad, August 2014
                                                                    • Figure 43: MULO sales of single-cup coffee at retail, by leading companies, rolling 52 weeks 2013 and 2014
                                                                  • Starbucks maintains dominance in RTD segment
                                                                    • Figure 44: Starbucks, “Purrfection,” Tumblr Post, 2014
                                                                    • Figure 45: International Delight, “Skip the Line,” TV Ad, May 2014
                                                                    • Figure 46: MULO sales of ready to drink coffee at retail, by leading companies, rolling 52 weeks 2013 and 2014
                                                                • Innovations and Innovators

                                                                  • Single-cup launches overtake those of roast coffee
                                                                    • Figure 47: Coffee launches by product launch type, 2009-14*
                                                                  • Coffeehouse and other foodservice brands take their mark into single-cup formats
                                                                    • Consumers are looking for a healthful benefit from their coffee
                                                                      • Cold brewing takes RTD form
                                                                      • The Consumer – Coffee Brewer Ownership

                                                                        • Key points
                                                                          • Multi-serve drip coffee makers remain standard with single-cup pod makers in second place
                                                                              • Figure 48: Coffee brewer ownership, by generations, June 2014
                                                                            • Households with children more likely to own single-serve machines
                                                                              • Figure 49: Coffee brewer ownership, by presence of children in household, June 2014
                                                                            • Coffee connoisseurs own the widest variety of coffee-making machines
                                                                              • Figure 50: Coffee brewer ownership, by any consumption – Types of coffee, June 2014
                                                                          • The Consumer – Reasons for Coffee Brewer Preference

                                                                            • Key points
                                                                              • Ease of use, coffee taste are top reasons for preferred brewer
                                                                                  • Figure 51: Reasons for purchasing preferred coffee brewer, June 2014
                                                                                • Single-cup machine users demonstrate a stronger degree of brand loyalty
                                                                                    • Figure 52: Reasons for purchasing preferred coffee brewer, by generations, June 2014
                                                                                  • Multi-serve owners most habit-driven, single-serve drip maker users less happy with taste
                                                                                      • Figure 53: Reasons for purchasing preferred coffee brewer, by coffee brewer ownership, June 2014
                                                                                    • Espresso-pod users like ability to accommodate many drinkers with a variety of coffee drinks
                                                                                      • Figure 54: Reasons for purchasing preferred coffee brewer, by coffee brewer ownership, June 2014
                                                                                    • Cold brew coffee connoisseurs say their machine/s offer a coffeehouse experience
                                                                                        • Figure 55: Reasons for purchasing preferred coffee brewer, by any consumption – Types of Coffee, June 2014
                                                                                    • The Consumer – Occasions for Drinking Coffee

                                                                                      • Key points
                                                                                        • Morning and breakfast still most common times to drink coffee
                                                                                          • Figure 56: Occasions for drinking coffee prepared at home, June 2014
                                                                                        • Younger adults drink coffee at less conventional times of day, more likely on the go
                                                                                            • Figure 57: Location, meal occasion and time of day for consuming coffee prepared at home, by generations, June 2014
                                                                                          • Millennial women are biggest afternoon coffee drinkers, Millennial men drink coffee in the evening
                                                                                            • Figure 58: Time of day for consuming coffee prepared at home, by gender and age, June 2014
                                                                                          • RTD and cold brew coffee drinkers consume at lunch, in the evening
                                                                                            • Figure 59: Time of day for consuming coffee prepared at home, by any consumption – Types of coffee, June 2014
                                                                                            • Figure 60: Meal occasion for consuming coffee prepared at home, by any consumption – Types of coffee, June 2014
                                                                                          • Half of Millennial women drink home-brewed coffee on the go
                                                                                            • Figure 61: Location for consuming coffee prepared at home, by gender and age, June 2014
                                                                                          • Parents drink coffee everywhere: at home and on the go
                                                                                            • Figure 62: Location for consuming coffee prepared at home, by presence of children in household, June 2014
                                                                                          • Retail RTD and cold brew coffee drinkers drink it out of home
                                                                                            • Figure 63: Location for consuming coffee prepared at home, by any consumption – Types of coffee, June 2014
                                                                                        • The Consumer – Consumption by Type

                                                                                          • Key points
                                                                                            • Ground/whole bean, espresso coffee usage holds steady; RTD just under 25% usage
                                                                                              • Figure 64: Household usage of ground or whole bean coffee, February 2008-March 2014
                                                                                              • Figure 65: Personal consumption of bottled or canned coffee drinks, February 2008-March 2014
                                                                                              • Figure 66: Household usage of espresso/cappuccino, February 2008-March 2014
                                                                                            • Ground coffee consumption high; Millennials driving single-cup, RTD coffee usage
                                                                                                • Figure 67: Personal coffee consumption prepared at home – Any consumption, June 2014
                                                                                                • Figure 68: Personal coffee consumption prepared at home – Any consumption, by generations, June 2014
                                                                                                • Figure 69: Personal coffee consumption prepared at home – Any consumption, by gender and age, June 2014
                                                                                              • Households with children significantly more likely to drink all coffee types than households without kids
                                                                                                • Figure 70: Personal coffee consumption prepared at home – Any consumption, by presence of children in household, June 2014
                                                                                            • The Consumer – Consumption by Frequency

                                                                                              • Key points
                                                                                                • Ground coffee has daily at-home consumption
                                                                                                  • Figure 71: Personal coffee consumption prepared at home, June 2014
                                                                                                • Most coffee drinkers are have high to moderate consumption
                                                                                                  • Figure 72: Personal coffee consumption prepared at home – Any consumption, by any consumption* of coffee, June 2014
                                                                                                • Single-cup and RTD consumers are high frequency overall coffee drinkers
                                                                                                  • Figure 73: Personal coffee consumption prepared at home – Usage Groups, by Any consumption* – Types of coffee, June 2014
                                                                                                • Swing Generation most likely to be high frequency coffee consumers
                                                                                                  • Figure 74: Personal coffee consumption prepared at home – Usage groups*, by generations, June 2014
                                                                                                • Parents are high frequency coffee consumers – across all coffee types
                                                                                                  • Figure 75: Personal coffee consumption prepared at home – High usage*, by presence of children in household, June 2014
                                                                                              • The Consumer – Consumption by Volume

                                                                                                • Key points
                                                                                                  • Households drinking 4.5 cups of home-brewed coffee per day
                                                                                                    • Figure 76: Household volume usage of ground or whole bean coffee, February 2008-March 2014
                                                                                                  • Personal at-home coffee consumption has mean range 1.5-2.9 cups per day
                                                                                                      • Figure 77: Personal daily consumption of coffee at home, by volume, June 2014
                                                                                                    • Millennial single-cup, RTD consumption lead results in more average cups per day than other generation groups
                                                                                                      • Figure 78: Personal daily consumption of coffee at home, by volume (mean), by generations, June 2014
                                                                                                    • Parents average more coffee volume per day than those without kids
                                                                                                      • Figure 79: Personal daily consumption of coffee at home, by volume (mean), by presence of children in household, June 2014
                                                                                                  • The Consumer – Brands Used

                                                                                                    • Key points
                                                                                                      • Folgers leads in ground/whole bean usage with other brands taking usage from Maxwell House
                                                                                                        • Figure 80: Household usage of ground or whole bean coffee, by brand, February 2008-March 2014
                                                                                                      • Other brands lead RTD coffee usage
                                                                                                        • Figure 81: Personal consumption of bottled or canned coffee drinks, by brand, February 2008-March 2014
                                                                                                    • The Consumer – Important Product Attributes

                                                                                                      • Key points
                                                                                                        • Millennials seek coffeehouse experience in retail product purchase
                                                                                                            • Figure 82: Important product attributes, by generations, June 2014
                                                                                                          • Parents choose coffeehouse brands, premium/gourmet, and bulk size
                                                                                                              • Figure 83: Important product attributes, by presence of children in household, June 2014
                                                                                                            • RTD coffee drinkers attracted to a coffeehouse experience via flavor, freshness, and premium quality
                                                                                                              • Figure 84: Important product attributes, by any consumption – Types of coffee, June 2014
                                                                                                              • Figure 85: Agreement with attitudes and behaviors toward coffee, by generations, June 2014
                                                                                                            • High frequency coffee drinkers, mostly older adults, seek national brands
                                                                                                              • Figure 86: Important product attributes, by any consumption* of coffee, June 2014
                                                                                                          • The Consumer – Attitudes and Behaviors toward Coffee

                                                                                                            • Key points
                                                                                                              • Iced coffee and new flavored coffee are desired by Millennials
                                                                                                                  • Figure 87: Agreement with attitudes and behaviors toward coffee, by generations, June 2014
                                                                                                                  • Figure 88: Agreement with attitudes and behaviors toward coffee, by presence of children in household, June 2014
                                                                                                                • Consumers want additional benefits from coffee – strong potential for innovation and growth
                                                                                                                    • Figure 89: Attitudes and behaviors toward coffee, June 2014
                                                                                                                    • Figure 90: Agreement with attitudes and behaviors toward coffee, by generations, June 2014
                                                                                                                    • Figure 91: Agreement with attitudes and behaviors toward coffee, by presence of children in household, June 2014
                                                                                                                    • Figure 92: Agreement with attitudes and behaviors toward coffee, by any consumption* of coffee, June 2014
                                                                                                                • Race and Hispanic Origin

                                                                                                                  • Key points
                                                                                                                    • All ethnicities more likely to use single-serve drip machines with less likelihood to like the coffee taste
                                                                                                                      • Figure 93: Coffee brewer ownership, by race/ethnicity origin, June 2014
                                                                                                                      • Figure 94: Reasons for purchasing preferred coffee brewer, by race/ethnicity origin, June 2014
                                                                                                                    • Coffee with lunch is more common among all race/ethnic groups
                                                                                                                      • Figure 95: Location for consuming coffee prepared at home, by race/ethnicity origin, June 2014
                                                                                                                      • Figure 96: Meal occasion for consuming coffee prepared at home, by race/ethnicity origin, June 2014
                                                                                                                      • Figure 97: Location for consuming coffee prepared at home, by race/ethnicity origin, June 2014
                                                                                                                    • Hispanics drink RTDs and cold brew more than traditional hot coffee
                                                                                                                      • Figure 98: Personal coffee consumption prepared at home – Any consumption, by race/ethnicity origin, June 2014
                                                                                                                    • Hispanics drink RTDs with higher frequency than all other consumers
                                                                                                                      • Figure 99: Personal coffee consumption prepared at home – Usage groups*, by race/ethnicity origin, June 2014
                                                                                                                    • Blacks, Hispanics favor major retail brands, look for freshness dates
                                                                                                                      • Figure 100: Important product attributes, by race/ethnicity origin, June 2014
                                                                                                                    • Hispanics are key opportunity for major retail brand RTDs with added benefits and flavors
                                                                                                                      • Figure 101: Agreement with attitudes and behaviors toward coffee, by race/ethnicity origin, June 2014
                                                                                                                  • Appendix – Other Useful Consumer Tables

                                                                                                                    • Coffee brewer ownership
                                                                                                                      • Figure 102: Coffee brewer ownership, by any consumption* of coffee, June 2014
                                                                                                                      • Figure 103: Coffee brewer ownership, by gender and age, June 2014
                                                                                                                      • Figure 104: Coffee brewer ownership, by age and household income, June 2014
                                                                                                                      • Figure 105: Reasons for purchasing preferred coffee brewer, by gender and age, June 2014
                                                                                                                      • Figure 106: Reasons for purchasing preferred coffee brewer, by age and household income, June 2014
                                                                                                                    • The Consumer – Personal Consumption of Coffee
                                                                                                                      • Figure 107: Personal coffee consumption prepared at home – Any consumption, by age and household income, June 2014
                                                                                                                      • Figure 108: Personal daily consumption of coffee at home, by volume (mean), by gender and age, June 2014
                                                                                                                      • Figure 109: Personal daily consumption of coffee at home, by volume (mean), by race/ethnicity origin, June 2014
                                                                                                                    • Occasions for drinking coffee prepared at home
                                                                                                                      • Figure 110: Meal occasion for consuming coffee prepared at home, by gender and age, June 2014
                                                                                                                      • Figure 111: Time of day for consuming coffee prepared at home, by any consumption of coffee, June 2014
                                                                                                                      • Figure 112: Meal occasion for consuming coffee prepared at home, by any consumption of coffee, June 2014
                                                                                                                      • Figure 113: Location for consuming coffee prepared at home, by any consumption of coffee, June 2014
                                                                                                                    • Important coffee product attributes
                                                                                                                      • Figure 114: Important product attributes, by gender and age, June 2014
                                                                                                                    • Attitudes and behaviors toward coffee
                                                                                                                      • Figure 115: Agreement with attitudes and behaviors toward coffee, by gender and age, June 2014
                                                                                                                      • Figure 116: Agreement with attitudes and behaviors toward coffee, by age and household income, June 2014
                                                                                                                      • Figure 117: Agreement with attitudes and behaviors toward coffee, by gender and age, June 2014
                                                                                                                      • Figure 118: Attitudes and behaviors toward coffee, June 2014
                                                                                                                      • Figure 119: Agreement with attitudes and behaviors toward coffee, by gender and age, June 2014
                                                                                                                      • Figure 120: Agreement with attitudes and behaviors toward coffee, by any consumption* of coffee, June 2014
                                                                                                                  • Appendix – Trade Associations

                                                                                                                    Companies Covered

                                                                                                                    • Kraft Foods Inc.
                                                                                                                    • Krispy Kreme Doughnuts Inc.
                                                                                                                    • National Trust (Enterprises) Ltd
                                                                                                                    • Peet's Coffee & Tea, Inc.
                                                                                                                    • Starbucks Corporation
                                                                                                                    • Tully's Coffee Corporation
                                                                                                                    • Walmart Stores (USA)

                                                                                                                    Coffee - US - September 2014

                                                                                                                    £3,277.28 (Excl.Tax)