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Coffee - US - September 2016

"Future growth is expected to remain healthy, supported by the current popularity of coffee and greater premiumization across segments. High quality ingredients and premiumized production and brewing methods transport the category into the Third Wave of coffee, which elevates the drink to more than just a commodity type beverage. Single-cup’s convenience and easy preparation methods also continue to support overall category growth, while RTD coffees generate renewed attention."
- Elizabeth Sisel, Beverage Analyst

This report discusses the following key topics:

  • Roasted coffees see stagnant growth
  • RTD coffees challenged by low consumption frequency
  • Competition with foodservice for specialty coffees

This Report includes packaged coffee and prepared coffee beverages sold for home preparation and/or consumption. The following types of coffee are included:

  • Roasted coffee - ground and whole bean; regular and decaffeinated; non-flavored and flavored
  • Single-cup coffee - cups and pods containing pre-measured coffee for use in automatic single-cup coffee makers
  • Instant coffee - regular and decaffeinated; includes both powdered instant and liquid coffee concentrates
  • Ready-to-drink (RTD) coffee - shelf-stable or refrigerated bottled/canned single-serve prepared iced coffees and coffee drinks; refrigerated RTD coffee (half-gallons and single-serving)
The Report references “brewed coffees” to classify the bundled segments of roasted (grounds/beans) and single-cup and/or pods, which require brewing at home.

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Table of contents

  1. Overview

    • What you need to know
      • Definition
          • Figure 1: Coffee definitions and hierarchy
      • Executive Summary

        • The issues
          • Roasted coffees see stagnant growth
            • Figure 2: Sales of market, by segment, current year
          • RTD coffees challenged by low consumption frequency
            • Figure 3: Coffee consumption – RTD coffees, June 2016
          • Competition with foodservice for specialty coffees
            • Figure 4: Coffee tracker – Coffee consumption at home and away from home, by coffee type, July 2016
          • The opportunities
            • Third Wave movement opens opportunity for innovation through premiumization
              • Figure 5: Attitudes and behaviors of interest regarding Third Wave coffees, June 2016
            • 70% want functions with their coffee
              • Figure 6: Desired coffee functionality, June 2016
            • Opportunity to cater to new drinking occasions, like mood
              • Figure 7: Drinking occasions – Consumption need, by generation, June 2016
            • What it means
            • The Market – What You Need to Know

              • Coffee sales forecast to grow 6.3% from 2015-16 estimate
                • Roasted coffee leads category sales, single-cup close behind
                  • Cream and creamer see sales growth, popular additions in coffee
                    • At home coffee consumption rate higher than at foodservice
                      • Coffee prices unpredictable, reliant on the state of key importers
                      • Market Size and Forecast

                        • Coffee sales forecast to grow 6.3% from 2015-16 estimate
                          • Figure 8: Total US sales and fan chart forecast of coffee, at current prices, 2011-21
                          • Figure 9: Total US retail sales and forecast of coffee, at current prices, 2011-21
                          • Figure 10: Total US retail sales and forecast of coffee, at inflation-adjusted prices, 2011-21
                      • Market Breakdown

                        • Roasted coffee leads category sales, single-cup close behind
                          • Roasted coffee
                            • Single cup
                              • RTD coffee
                                • Instant coffee
                                  • Figure 11: Total US retail sales and forecast of coffee, by segment, at current prices, 2011-21
                                • Healthy future growth expected for single-cup, RTD coffee segments
                                  • Figure 12: Sales of market, by segment, 2012-21
                                • “Other” retail channels, supermarkets dominate coffee sales
                                  • Figure 13: Sales of market, by segment, current year
                                • Natural channels coffee sales grow 26.2% from 2015-16
                                  • Figure 14: Natural supermarket sales of coffee, at current prices, rolling 52 weeks April 2014-16
                                • Whole beans dominate coffee sales at natural channels
                                  • Figure 15: Natural supermarket sales of coffee, by type, at current prices, rolling 52 weeks ending April 2016
                              • Market Perspective – Cream/Creamer

                                • Cream and creamer see sales growth, popular additions in coffee
                                  • Figure 16: Total US sales and fan chart forecast of cream and creamers, at current prices, 2011-21
                                  • Figure 17: Total US retail sales and forecast of cream and creamers, at current prices, 2011-21
                                  • Figure 18: Total US retail sales and forecast of cream and creamers, at inflation-adjusted prices, 2011-21
                              • Market Perspective – Foodservice

                                • At home coffee consumption rate higher than at foodservice
                                  • Figure 19: Coffee tracker – Coffee consumption at home and away from home, Trended December 2014 to July 2016
                                  • Figure 20: Coffee tracker – Coffee consumption at home and away from home, by coffee type, July 2016
                                • Coffee house chain most popular foodservice location
                                  • Figure 21: Coffee/tea segment visitation, October 2015
                              • Market Perspective – Mintel Defines Coffee’s “Waves”

                                • The history of coffee, defined by waves
                                  • The First Wave
                                    • The Second Wave
                                      • The Third Wave
                                        • Third Wave Evolution – What’s next
                                        • Market Factors

                                          • Coffee prices unpredictable, reliant on the state of key importers
                                            • Figure 22: US imports of coffee, trended 2010-14, November 2015
                                          • US coffee consumption on the rise
                                            • Figure 23: US domestic consumption of coffee, trended 2011-16, June 2016
                                          • iGeneration, Millennial populations have positive growth
                                            • Figure 24: Population by generation, percentage change, 2011-21
                                          • Declining household income challenges some coffee segments
                                            • Figure 25: Median household income, in inflation-adjusted dollars, 2004-14
                                          • Overlap between Millennials, acculturated Hispanics, and parents
                                            • Millennials as parents
                                              • Figure 26: Households with own children, by age of householder, 2013
                                            • Hispanics as parents
                                              • Figure 27: Households with own children, by Hispanic origin of householder, 2013
                                            • Hispanics as Millennials
                                              • Figure 28: Generations, by Hispanic origin, 2016
                                          • Key Players – What You Need to Know

                                            • Leading companies see MULO sales growth
                                              • Coffee house and foodservice brands experience gains across segments
                                                • National brands face challenges across segments
                                                  • Coffee innovation picks up pace
                                                  • Leading Companies and Brands of Coffee

                                                    • Leading companies see MULO sales growth
                                                      • Manufacturer sales of coffee
                                                        • Figure 29: MULO sales of coffee, by leading companies, rolling 52 weeks 2015 and 2016
                                                    • What’s Working?

                                                      • Roasted coffee house brands see sales gains at MULO channels
                                                        • Specialty roasters
                                                          • Foodservice/national coffee house brands
                                                            • Foodservice, national brands drive single-cup sales growth
                                                              • RTD coffees
                                                              • What’s Struggling?

                                                                • National brands face challenges across segments
                                                                  • Figure 30: MULO sales of roasted coffee, by leading companies and brands, rolling 52 weeks 2015 and 2016
                                                                • Keurig brand sales decline at MULO channels
                                                                  • Figure 31: MULO sales of single cup coffee, by leading companies and brands, rolling 52 weeks 2015 and 2016
                                                                • Instant coffee continues to falter in wake of single-cup success
                                                                • What’s Next?

                                                                  • RTD coffees feature unique nutrition, functional qualities
                                                                    • Specific regions are spotlighted
                                                                      • Unique roasting and aging methods create new flavor experience
                                                                        • Nitro, carbonated coffees launch at retail
                                                                          • Single-cup packaging
                                                                          • The Consumer – What You Need to Know

                                                                            • Segmentation breakdown
                                                                              • Figure 32: Coffee definitions and hierarchy
                                                                            • Core consumers drink multiple types of coffee
                                                                              • Roasted coffee leading coffee format, consumed at highest frequency
                                                                                • Sugar, flavored creamer leading coffee additions
                                                                                  • Coffee pot brewer preferred preparation method
                                                                                    • Classic cold coffee drinks most preferred RTD option, frequency still low
                                                                                      • Cold brew continues to see impressive sale gains
                                                                                        • The history of coffee, defined by waves
                                                                                          • Quality, price, premium flavor defining characteristics of Third Wave
                                                                                            • Roast type, flavor most influential to consumers’ coffee choice
                                                                                              • 70% of consumers want functionality
                                                                                                • Brewed, RTD coffees preferred at different occasions
                                                                                                • Cross Consumption of Coffee Segments

                                                                                                  • Core consumers drink multiple types of coffee
                                                                                                    • Figure 33: Repertoire analysis – Coffee consumption, June 2016
                                                                                                • Roasted and Single-cup Coffee Consumption

                                                                                                  • Roasted coffee leading coffee format, consumed at highest frequency
                                                                                                    • Figure 34: Coffee consumption – Brewed and single-cup coffee, June 2016
                                                                                                  • Older Millennials heaviest brewed coffee drinkers
                                                                                                    • Figure 35: Coffee consumption (heavy and moderate) – Brewed and single-cup coffee, by generation, June 2016
                                                                                                  • Coffee consumption influenced by household income level
                                                                                                    • Figure 36: Coffee consumption (heavy and moderate) – Brewed and single-cup coffee, by household income, June 2016
                                                                                                    • Figure 37: Coffee consumption (heavy) – Brewed and single-cup coffee, by age and household income, June 2016
                                                                                                  • Acculturated Hispanics heavy, frequent brewed coffee drinkers
                                                                                                    • Figure 38: Coffee consumption (heavy and moderate) – Brewed and single-cup coffee, by race and Hispanic origin, June 2016
                                                                                                • Brewed Coffee Additions

                                                                                                  • Sugar, flavored creamer leading coffee additions
                                                                                                    • Figure 39: Coffee additions, June 2016
                                                                                                  • Consumers add multiple ingredients into their coffee
                                                                                                    • Figure 40: Coffee additions – Dairy and non-dairy additions, June 2016
                                                                                                    • Figure 41: Coffee additions – Sugar, sweeteners, and flavorings, June 2016
                                                                                                  • Older consumers most likely to drink coffee black
                                                                                                    • Figure 42: Coffee additions – Drink it plain/black, June 2016
                                                                                                  • Men drive usage for a variety of coffee additions
                                                                                                    • Figure 43: Coffee additions, by gender, June 2016
                                                                                                  • Millennials drive usage of coffee additions
                                                                                                    • Figure 44: Coffee additions, by generation, June 2016
                                                                                                  • Hispanics, Blacks, Whites stand out for preferences
                                                                                                    • Figure 45: Coffee additions, by race and Hispanic origin, June 2016
                                                                                                • Coffee Brewer Usage

                                                                                                  • Coffee pot brewer preferred preparation method
                                                                                                    • Figure 46: Attitudes and behaviors – Coffee brewer usage, June 2016
                                                                                                  • Millennials use a variety of brewers, iGen stands out with single-cup
                                                                                                    • Figure 47: Attitudes and behaviors – Coffee brewer usage, by generation, June 2016
                                                                                                  • Income influences coffee brewer preferences
                                                                                                    • Figure 48: Attitudes and behaviors – Coffee brewer usage, by household income, June 2016
                                                                                                • Ready-to-drink Coffee Consumption

                                                                                                  • Classic cold coffee drinks most preferred RTD option, frequency still low
                                                                                                    • Figure 49: Coffee consumption – RTD coffees, June 2016
                                                                                                  • Millennials, iGeneration core consumer groups
                                                                                                    • Figure 50: Coffee consumption (heavy and moderate) – RTD coffees, by generation, June 2016
                                                                                                  • Income level influences rate, frequency of RTD coffee consumption
                                                                                                    • Figure 51: Coffee consumption (heavy and moderate) – RTD coffees, by household income, June 2016
                                                                                                    • Figure 52: Coffee consumption (heavy and moderate) – RTD coffees, by age and household income, June 2016
                                                                                                  • Hispanics dominate RTD coffee consumption, Blacks least interested
                                                                                                    • Figure 53: Coffee consumption (heavy and moderate) – RTD coffees, by race and Hispanic origin, June 2016
                                                                                                • Cold Brew

                                                                                                  • Cold brew consumption remains steady from 2015-16
                                                                                                    • Figure 54: Cold brew coffee consumption, trended June 2015 to June 2016
                                                                                                  • Impressive sale gains indicate increased awareness, trial
                                                                                                    • Figure 55: Total US retail sales of refrigerated cold-brew/concentrate coffee, at current prices, 2011-21
                                                                                                  • Interest in cold brew preparation at home
                                                                                                    • Figure 56: Attitudes and behaviors, by generation, June 2016
                                                                                                  • Classic RTD cold coffees preferred over cold brew retail varieties
                                                                                                  • Third Wave Coffee – Consumer Defined

                                                                                                    • Quality, price, premium flavor defining characteristics of Third Wave
                                                                                                        • Figure 57: Defining third wave coffee, June 2016
                                                                                                      • “I don’t know what this is”
                                                                                                        • Figure 58: Defining third wave coffee – I don’t know what this is, June 2016
                                                                                                      • Millennials, iGen drive definition of Third Wave coffee
                                                                                                        • Figure 59: Coffee additions, June 2016
                                                                                                      • Potential for premiumized coffee growth
                                                                                                        • Figure 60: Attitudes and behaviors, by generation, June 2016
                                                                                                    • Important Coffee Attributes

                                                                                                      • Roast type, flavor most influential to consumers’ coffee choice
                                                                                                        • Power of niche attributes
                                                                                                          • Brand influences consumer coffee preferences
                                                                                                            • Figure 61: Important coffee attributes, June 2016
                                                                                                        • Functionality

                                                                                                          • 70% of consumers want functionality
                                                                                                            • Leveraging inherent nutrition and functions
                                                                                                              • The mood of coffee
                                                                                                                • Figure 62: Desired coffee functionality, June 2016
                                                                                                              • Functionality a way to reach iGeneration consumers
                                                                                                                • Figure 63: Desired coffee functionality, June 2016
                                                                                                              • Millennials, Gen Xers interested in added health benefits
                                                                                                                • Figure 64: Desired coffee functionality – Health focus, by generation, June 2016
                                                                                                            • Drinking Occasions

                                                                                                              • Brewed, RTD coffees preferred at different occasions
                                                                                                                • Morning habitual time to drink brewed coffee
                                                                                                                  • With/without a meal
                                                                                                                    • Weather influences drink choice
                                                                                                                      • Figure 65: Drinking occasions, June 2016
                                                                                                                    • Coffee consumption for energy, relaxation, thirst
                                                                                                                      • Figure 66: Drinking occasions – Consumption need, by generation, June 2016
                                                                                                                  • Appendix – Data Sources and Abbreviations

                                                                                                                    • Data sources
                                                                                                                      • Sales data
                                                                                                                        • Fan chart forecast
                                                                                                                          • Consumer survey data
                                                                                                                            • Abbreviations and terms
                                                                                                                              • Abbreviations
                                                                                                                                • Terms
                                                                                                                                • Appendix – Market

                                                                                                                                    • Figure 67: Total US retail sales and forecast of roasted coffee, at current prices, 2011-21
                                                                                                                                    • Figure 68: Total US retail sales and forecast of roasted coffee, at inflation-adjusted prices, 2011-21
                                                                                                                                    • Figure 69: Total US retail sales and forecast of single-cup coffee, at current prices, 2011-21
                                                                                                                                    • Figure 70: Total US retail sales and forecast of single-cup coffee, at inflation-adjusted prices, 2011-21
                                                                                                                                    • Figure 71: Total US retail sales and forecast of instant coffee, at current prices, 2011-21
                                                                                                                                    • Figure 72: Total US retail sales and forecast of instant coffee, at inflation-adjusted prices, 2011-21
                                                                                                                                    • Figure 73: Total US retail sales and forecast of ready-to-drink coffee, at current prices, 2011-21
                                                                                                                                    • Figure 74: Total US retail sales and forecast of ready-to-drink coffee, at inflation-adjusted prices, 2011-21
                                                                                                                                    • Figure 75: Total US retail sales and forecast of cream, at current prices, 2011-21
                                                                                                                                    • Figure 76: Total US retail sales and forecast of cream, at inflation-adjusted prices, 2011-21
                                                                                                                                    • Figure 77: Total US retail sales and forecast of creamer, at current prices, 2011-21
                                                                                                                                    • Figure 78: Total US retail sales and forecast of creamer, at inflation-adjusted prices, 2011-21
                                                                                                                                    • Figure 79: US supermarket sales of coffee, at current prices, 2011-16
                                                                                                                                    • Figure 80: US drugstore sales of coffee, at current prices, 2011-16
                                                                                                                                    • Figure 81: US sales of coffee through other retail channels, at current prices, 2011-16
                                                                                                                                    • Figure 82: US supermarket sales of cream and creamer, at current prices, 2011-16
                                                                                                                                    • Figure 83: US sales of cream and creamer through other retail channels, at current prices, 2011-16
                                                                                                                                • Appendix – Key Players

                                                                                                                                    • Figure 84: MULO sales of roasted coffee, by leading companies and brands, rolling 52 weeks 2015 and 2016
                                                                                                                                    • Figure 85: MULO sales of single cup coffee, by leading companies and brands, rolling 52 weeks 2015 and 2016
                                                                                                                                    • Figure 86: MULO sales of instant coffee, by leading companies and brands, rolling 52 weeks 2015 and 2016
                                                                                                                                    • Figure 87: MULO sales of ready to drink coffee, by leading companies and brands, rolling 52 weeks 2015 and 2016

                                                                                                                                Companies Covered

                                                                                                                                • Walmart Stores (USA)

                                                                                                                                Coffee - US - September 2016

                                                                                                                                £3,199.84 (Excl.Tax)