Description

“The foodservice coffee and tea market overcame COVID-related challenges as consumers resumed their pre-pandemic behaviors and returned to their favorite coffee shops. While the rise of remote work will shift market dynamics, remote workers remain steadfast AFH coffee and tea customers. However, rising inflation will create new challenges for foodservice coffee/tea outlets as price-sensitive consumers will source their own beverages from home. Operators must therefore offer promotions for value-conscious consumers while also creating new innovative coffee and tea drinks consumers cannot replicate.”
Caleb Bryant, Associate Director of Food and Drink Reports

This Report looks at the following areas:

  • Impact of inflation on the foodservice coffee and tea market
  • Consumers’ growing preference for cold coffee beverages
  • Coffee shops and the metaverse/web3
  • Foodservice coffee and tea menu trends

Table of Contents

  1. Overview

    • What you need to know
      • This Report looks at the following areas
        • Definition
          • Market context
          • Executive Summary

              • Top takeaways
                • Market overview
                  • Figure 1: Category outlook, 2022-27
                • Opportunities and challenges
                  • Foodservice coffee and tea market bounces back after a period of pandemic-induced disruption
                    • Figure 2: Trended AFH coffee and tea purchases, 2019-22
                  • Consumers will curtail coffee purchases following rising inflation
                    • Figure 3: Anticipated behaviors if coffee prices increase, 2022
                  • Beverage variety can allow QSRs and c-stores to steal market share from coffee shops
                    • Figure 4: Correspondence Analysis – Symmetrical map – Coffee/tea foodservice segment association, 2022
                  • Hot opportunities for cold coffee beverage innovation
                    • Figure 5: Coffee drinks ordered most often: hot vs cold, by age, 2022
                    • Figure 6: Reasons for ordering cold coffee drinks most often, by age, 2022
                  • Millennials are willing to spend more for a “green” cup of coffee
                    • Figure 7: Coffee attitudes, any agree, by generation, 2022
                • Market Factors

                  • AFH coffee and tea will struggle as inflation soars
                    • Figure 8: Anticipated behaviors if coffee prices increase, 2022
                    • Figure 9: Trended financial situation, January 2022-June 2022
                  • Coffee shop labor disputes may shape the future of the foodservice industry
                    • Figure 10: AFH coffee attitudes, by area, 2022
                  • Climate change threatens the future of coffee
                    • Figure 11: AFH coffee attitudes, sustainability attitudes, any agree, by coffee enthusiasts, 2022
                • Competitive Strategies and Market Opportunities

                  • Coffee shops in the metaverse: fad or future?
                    • What is the metaverse?
                      • Starbucks and web3
                        • NFTs as the next step in foodservice loyalty programs
                          • Counter-trend: Community co-working coffee shops
                            • Fourth-wave coffee and foodservice
                              • Brief history of coffee shop waves
                                • Fourth-wave coffee
                                  • Figure 12: Coffee information sources, by generation, 2022
                                • “Bottom-up” nature of fourth-wave coffee will increase demand for memorable AFH drinks
                                  • Chains look to cut costs and increase convenience through automation
                                    • Stressed out consumers are in need of indulgent coffee shop treats
                                      • Build off the espresso martini’s return
                                        • Figure 13: Coffee cocktail examples
                                      • Competitive strategies for FSRs
                                        • Marketing to Gen Z as the new diner crowd
                                          • Homemade as a driver for differentiation
                                            • Figure 14: Change in incidence of menu items claims in coffee and tea drinks on menus, Q4 2018-Q4 2021
                                          • Optional convenience can lead to dine-in loyalty
                                          • Foodservice Coffee and Tea Menu Trends

                                            • Coffee goes stale
                                              • Figure 15: Change in incidence of coffee drinks on menu, Q4 2018-Q4 2021
                                              • Figure 16: Change in incidence of coffee drinks on menu, by segment, Q4 2018-Q4 2021
                                              • Figure 17: Change in incidence of coffee drinks on menu, by preparation, Q4 2018-Q4 2021
                                            • Operators spill the tea
                                              • Figure 18: Change in incidence of tea drinks on menu, Q4 2018-Q4 2021
                                              • Figure 19: Change in incidence of tea drinks on menu, by segment, Q4 2018-Q4 2021
                                              • Figure 20: Change in incidence of tea drinks on menu – drink flavors, Q4 2018-Q4 2021
                                          • The Consumer – Fast Facts

                                            • Trended AFH Coffee and Tea Purchases

                                              • Consumers return to pre-pandemic behaviors
                                                • Figure 21: Trended AFH coffee and tea purchases, 2019-22
                                              • Coffee is a drink best served cold to Gen Z and Millennial consumers
                                                • Figure 22: AFH coffee purchases, by generation, 2022
                                                • Figure 23: AFH coffee and tea purchases, by generation, 2022
                                              • Remote workers remain dedicated AFH coffee and tea consumers
                                                • Figure 24: AFH coffee and tea purchases, by WFH status, 2022
                                            • Trended Coffee and Tea Foodservice Visitation

                                              • FSRs did not experience a post-pandemic coffee/tea sales bump
                                                • Figure 25: Trended coffee and tea foodservice visitation, 2019-22
                                              • Increased economic anxieties may benefit value-forward chains
                                                • Figure 26: coffee and tea foodservice visitation, by financial situation, 2022
                                            • Foodservice Coffee and Tea Segment Associations

                                              • QSRs and C-stores can draw consumers away from high-priced segments
                                                • Figure 27: Correspondence Analysis – Symmetrical map – Coffee/tea foodservice segment association, 2022
                                                • Figure 28: Coffee/tea foodservice segment association, 2022
                                            • AFH Coffee: Hot vs Cold

                                              • Cold coffee is the norm for young consumers
                                                • Figure 29: Coffee drinks ordered most often: hot vs cold, 2022
                                                • Figure 30: Coffee drinks ordered most often: hot vs cold, by age, 2022
                                                • Figure 31: Coffee drinks ordered most often: hot vs cold, by gender and age, 2022
                                            • Reasons for Ordering Hot Coffee Drinks Most Often

                                              • Hot coffee is associated with comfort and familiarity
                                                • Figure 32: Reasons for ordering hot coffee drinks most often, by age, 2022
                                            • Reasons for Ordering Cold Coffee Drinks Most Often

                                              • Cold coffee is a refreshing treat
                                                • Figure 33: Reasons for ordering cold coffee drinks most often, by age, 2022
                                            • Cold Coffee Consumption Frequency: MTO vs RTD

                                              • Consumers habitually consume cold coffee drinks
                                                • Figure 34: Cold coffee consumption frequency: MTO vs RTD, 2022
                                              • Expand cold coffee beverage choices
                                                • Figure 35: Cold coffee consumption frequency: MTO, by generation, 2022
                                              • Remote work has not diminished consumers’ demand for AFH cold coffee
                                                • Figure 36: Cold coffee consumption frequency: MTO, by remote work status, 2022
                                              • Retain price-sensitive cold coffee consumers via promotions and deals
                                                • Figure 37: Cold coffee consumption frequency: MTO, by financial situation, 2022
                                            • Cold Coffee Perception: MTO vs RTD

                                              • Foodservice faces pressure from RTD coffee
                                                • Figure 38: Cold beverage perception: MTO vs RTD, 2022
                                              • MTO cold coffee drinks are personal treats for older consumers
                                                • Figure 39: Cold beverage perception: MTO, by age, 2022
                                            • AFH Coffee Purchase Factors

                                              • Decision-making process dictated by a combination of quality, convenience and price
                                                • Figure 40: AFH coffee purchase factors, 2022
                                              • “Good enough” is just OK with Gen Z consumers
                                                • Figure 41: AFH coffee purchase factors, by generation, 2022
                                                • Figure 42: AFH coffee purchase factors, by age and HHI, 2022
                                            • AFH Coffee Attitudes

                                              • Innovation combats the threat from home-sourced coffee
                                                • Figure 43: AFH coffee attitudes, 2022
                                              • Foodservice can save coffee’s future
                                                • Figure 44: coffee attitudes, sustainability attitudes, 2022
                                              • Millennials are engaged coffee enthusiasts
                                                • Figure 45: AFH coffee attitudes, any agree, by generation, 2022
                                              • Successful offerings in urban areas may not translate to suburban or rural areas
                                                • Figure 46: AFH coffee attitudes, any agree, by area, 2022
                                            • Appendix – Data Sources and Abbreviations

                                              • Data sources
                                                • Consumer survey data
                                                  • Abbreviations and terms
                                                    • Abbreviations

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