In Canada, coffee is the most popular drink after water and a key part of daily life. But this love for coffee doesn’t mean the market is stagnant. Younger generations are influencing the coffee industry with their evolving tastes, pushing producers to innovate and stay competitive in Canada’s market.
The definition of coffee is expanding, especially with formats like ready-to-drink (RTD) options appealing to younger adults, even drawing in teenagers. That said, ground coffee remains relevant among younger consumers. However, brands can’t take consumers’ loyalty for granted, especially as energy drinks gain popularity for offering quick boosts.
Coffee shops also play an important role in Canada. Beyond caffeine, they serve as “third spaces” where people connect or enjoy a moment of calm. Tim Hortons continues to dominate as Canada’s go-to choice for out-of-home coffee. However, the market is large enough to accommodate a range of competitors that cater to diverse preferences.
This report looks at the following areas:
- Coffee usage among Canadian adults.
- Types of coffee consumed at home and popular foodservice locations for out-of-home coffee.
- Coffee consumption habits among teenagers.
- Attributes that define consumers’ ideal coffee brands and areas of interest.
- Perspectives on habit versus exploration, the role of coffee shops, and the impact of rising coffee prices
- Coffee usage and attitudes analyzed by generation, newer Canadians, work location, and regional differences
Almost all Canadians drink coffee, and while many habits are well established, the market remains dynamic, with consumers showing clear openness to innovation.
Joel Gregoire, Associate Director of Food & Drink Reports
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EXECUTIVE SUMMARY
- What you need to know
- Market predictions
- Opportunities
- What consumers want & why
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THE MARKET
- Market drivers
- Inflation was on target at 1.9% in January
- Graph 1: annual change in CPI and retail food prices by month, January 2019 – January 2025
- Weather and demand have spiked coffee prices
- Graph 2: coffee commodity prices, by select dates in annual increments, 2015-25
- Global average temperatures point to a warming planet
- Graph 3: global land-ocean temperature index, 1973-2023
- Limited-service restaurant sales grew in 2024, albeit at a more moderate rate
- Graph 4: monthly limited-service eating places* dollar sales, January 2019 – December 2024
- Canadians show greater willingness to spend on dining out
- Graph 5: percent of consumers who have cut back on dining out/other leisure activities over the past two months, February 2023 – December 2024
- Trade tensions with the US could undermine consumer confidence
- Graph 6: issues of concern over the next six months, (any rank), March 2022 – January 2025
- Flexible work arrangements remain
- Graph 7: work location of employed Canadians, 2025
- Despite reduced admission targets, immigration will remain the key driver of Canada’s population growth
- Graph 8: permanent resident admission targets, 2025-27
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CONSUMER INSIGHTS
- Consumer fast facts
- In-home coffee behaviours
- Nearly all Canadian adults drink coffee
- Ground coffee remains the top choice among Canadians
- Graph 9: types of coffee drunk at home in the past month, 2025
- Core coffee formats remain steady, while alternative options see growing popularity
- Graph 10: types of coffee drunk at home in the past month, 2023 & 2025
- Consumers report turning to ground coffee and single-cup pods more often, emphasizing habit, value, and convenience
- Graph 11: how coffee usage at home has changed vs last year by type, 2025
- Foodservice coffee behaviours by operator
- Tim Hortons maintains its lead as McDonald’s strengthens its hold on second place
- Graph 12: coffee shops or restaurants where coffee was purchased from in the past month, 2023 & 2025
- Tim Hortons and McDonald’s are at the centre of Canada’s coffee wars
- Graph 13: coffee shops or restaurants where coffee was purchased from in the past month, by specific operators’ consumers, 2025
- Tim Hortons solidifies its place as Canada’s go-to venue for coffee
- Graph 14: change in visit frequency to get coffee vs last year, by operator, 2025
- Describing the ideal coffee brand
- Taste and affordability are central to consumers’ perception of an ideal coffee brand
- Graph 15: words that best describe ideal coffee brands (select up to five), 2025
- Adapt brand positioning to align with format preferences
- Graph 16: words that best describe ideal coffee brands (select up to five), by types of coffee drunk at home in the past month, 2025
- Maximize success with key strengths in foodservice coffee
- Graph 17: words that best describe ideal coffee brands (select up to five), by coffee shops or restaurants where coffee was purchased from in the past month, 2025
- Second Cup customers are more likely to connect patriotism with their ideal coffee brand
- Interest in coffee or coffee-related products
- Unique flavours and creative applications can help coffee brands stand out
- Graph 18: coffee or coffee-related products interested in trying, 2025
- Brewing variety: coffee flavours can satisfy varied palates
- Consumers of RTD coffee and liquid concentrates show more enthusiasm for coffee innovations
- Graph 19: coffee or coffee-related products interested in trying, by type of coffee drunk at home, 2025
- Power up coffee with protein-infused offerings
- Teenagers and coffee
- Younger generations start drinking coffee at an earlier age
- Graph 20: age when consumers first started drinking coffee, mean age, by generation, 2023
- Most teenagers enjoy coffee, embracing both hot and cold options
- Graph 21: whether teenagers aged 12-17 drink coffee (answered by parents), 2025
- How urban life percolates coffee habits in teens
- Graph 22: whether teenagers aged 12-17 drink coffee (answered by parents), by living area, 2025
- Starbucks is more likely to be a coffee destination for parents of teenagers versus the broader consumer base
- Graph 23: operators visited in the past month for coffee, by teens who drink coffee (answered by parents), 2025
- Teenagers and coffee: a brewing debate
- Graph 24: attitudes toward teenagers drinking beverages with caffeine levels typically found in coffee, 2025
- Parents are more likely to say yes to teens and coffee
- Graph 25: attitudes toward teenagers drinking coffee drink beverages with caffeine levels typically found in coffee, by parental status, 2025
- Do parents’ approval make a difference?
- Graph 26: “It’s okay for teenagers (ie aged 13-17) to drink beverages with caffeine levels typically found in coffee”, by teens who drink coffee (answered by parents), 2025
- Younger Generations support teen caffeine culture
- Graph 27: attitudes toward teenagers drinking beverages with caffeine levels typically found in coffee and energy drinks offering the same benefits as coffee (any agree), by generation, 2025
- Attitudes toward habit versus exploration
- Consumers may enjoy variety, but habit has more impact on coffee choices
- Graph 28: attitudes toward habit and coffee, 2025
- Coffee shops are the main gateway to new coffee trends
- Graph 29: attitudes toward learning about and experimenting with coffee, 2025
- Attitudes toward the purpose of coffee shops
- Coffee shops foster connection
- Graph 30: attitudes toward the coffee shop experience, 2025
- Generation influences expectations of coffee shops
- Graph 31: attitudes toward the coffee shop experience (any agree), by generation, 2025
- Coffee shops can be a go-to office for busy parents
- Graph 32: coffee shops as a good place to get work done (any agree), by parental status, 2025
- Graph 33: coffee shops as a good place to get work done (any agree), by living area, 2025
- Attitudes toward the rising price of coffee
- Consumers perceive coffee price changes similarly across retail and foodservice
- Graph 34: attitudes toward the rise of coffee prices, 2025
- Rising coffee prices are less of a focus for Gen Z
- Graph 35: attitudes toward the rise of coffee prices (any agree), by generation, 2025
- Coffee and generational differences
- Gen Z shows little difference between in-home and out-of-home coffee consumption
- Graph 36: where consumers drank coffee or coffee-based drinks in the past month, by generation, 2025
- RTD coffee rivals ground coffee among Gen Zs and Millennials
- Graph 37: types of coffee drunk at home in the past month, by generation, 2025
- Starbucks relies heavily on younger generations
- Graph 38: coffee shops or restaurants where coffee was purchased from in the past month, by generation, 2025
- Older generations prioritize fundamental qualities when defining their ideal coffee brand
- Graph 39: words that best describe ideal coffee brands (select up to five), by generation, 2025
- Harness creative innovation strategies to engage with younger audiences
- Graph 40: coffee or coffee-related products interested in trying, by generation, 2025
- To connect with younger generations, brands must invest in their social media presence
- Graph 41: influence of coffee shops vs social media on coffee trends (any agree), by generation, 2025
- Energy drinks are a rival to coffee among younger generations
- Coffee brands can draw inspiration from Celsius energy drinks
- Beyond coffee: how foodservice operators energize customers
- Will younger generations turn more to hot coffee as they age?
- Coffee habits and preferences among newer Canadians
- Instant and RTD coffee are much more popular with newer Canadians
- Graph 42: types of coffee drunk at home in the past month, newer vs established Canadians, 2025
- Tim Hortons connects with newer Canadians
- Graph 43: coffee shops or restaurants where coffee was purchased from in the past month, newer vs established Canadians, 2025
- Tim Hortons captures the emotional journey of newcomers to Canada
- Newer Canadians share similar priorities with younger generations
- Graph 44: words that best describe ideal coffee brands (select up to five), newer vs established Canadians, 2025
- Newer Canadians express greater openness to variety in coffee
- Graph 45: attitudes toward habit versus exploration, newer vs established Canadians, 2025
- Newer Canadians represent a key audience for unique, coffee-focused innovations
- Graph 46: coffee or coffee-related products interested in trying, newer vs established Canadians, 2025
- Coffee habits and preferences based on work location
- Going to work bolsters out-of-home coffee opportunities
- Graph 47: where consumers drank coffee or coffee-based drinks in the past month, by work location, 2025
- Making coffee with whole beans is more common among remote workers
- Graph 48: types of coffee drunk at home in the past month, by work location, 2025
- Hybrid work arrangements: the sweet spot for McDonald’s and Starbucks
- Graph 49: coffee shops or restaurants where coffee was purchased from in the past month, work location, 2025
- Among the top three coffee shop chains, Starbucks is viewed as the best place to get work done
- Graph 50: coffee shops as a good place to get work done, by coffee shops or restaurants where coffee was purchased from in the past month, 2025
- Coffee habits and preferences based on living area
- Urban and suburban consumers are more likely to buy coffee out-of-home
- Graph 51: where consumers drink coffee or coffee-based drinks, by living area, 2025
- Starbucks usage skews toward cities
- Graph 52: coffee shops or restaurants where coffee was purchased from in the past month, by living area, 2025
- Coffee shops in and near cities fuel work and study habits
- Graph 53: attitudes toward the coffee shop experience (any agree), by living area, 2025
- City residents are open to more coffee varieties
- Graph 54: attitudes toward variety and experimentation (any agree), by living area, 2025
- Coffee habits and preferences based on regions
- Quebecers are less likely to get coffee from foodservice
- Graph 55: where consumers drink coffee or coffee-based drinks, by region, 2025
- Starbucks leads in British Columbia
- Graph 56: coffee shops or restaurants where coffee was purchased from in the past month, by region, 2025
- Quebec consumers are less influenced by affordability
- Graph 57: words that best describe ideal coffee brands (select up to five), by region, 2025
- Ontarians take a more relaxed approach to teens and caffeine
- Graph 58: attitudes toward teenagers drinking beverages with caffeine levels typically found in coffee and energy drinks offering the same benefits as coffee (any agree), by region, 2025
- Plant-based creamers resonate in Ontario and particularly BC
- Graph 59: interest in trying plant-based creamers, by region, 2025
- The appeal of plant-based creamers goes beyond skipping dairy
- Almond leads dairy alternatives, but oat is on the rise
- Graph 60: types of non-dairy alternatives to milk purchased in the past three months, 2019 & 2023
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COMPETITIVE STRATEGIES
- Launch activity and innovation
- Variety packs are a way to mark different seasons
- Seasonality can be a catalyst for flavour innovation
- Fun flavours can elevate coffee’s appeal
- Fourth Wave: home coffee revolution
- Coffee meets playful packaging
- Evolving instant coffee
- Plant-based RTD coffees come in different varieties
- Bridge the gap between coffee lovers and energy drink fans
- Asian (more specifically Vietnam-sourced) coffee resonates with today’s younger generations
- Blending the pulse of modern media with global inspiration
- Promoting wellness: mushroom coffee and functionality
- Counterintuitively, coffee can foster a sense of calm
- Adding a sophisticated twist to coffee
- Marketing and advertising
- Starbucks adapts its operational strategies to enhance customer service
- Nespresso’s immersive coffee boutiques bolster the coffee experience
- Smaller footprints and pop-ups can promote efficiency and flexibility
- Supporting Canadians matters more than ever
- Opportunities
- Coffee can add depth to desserts
- Coffee machines can be a work of art
- Coffee can make offices more inviting
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APPENDIX
- Market definition
- Consumer research methodology
- Flavourscape AI
- Generations
- Abbreviations and terms
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