Dive Brief:
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A recent industry survey found 64% of American adults drink a cup of coffee each day — up 2% from 2017 and the highest level since 2012, according to a survey from the National Coffee Association cited by Reuters.
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Demand is increasing as more consumers enjoy the beverage at home and gourmet coffee drinks become more popular, the survey indicated. The drop in soda and juice consumption also is having an impact.
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Coffee joins bottled water and tea as the most popular beverages in the U.S. For Americans, Reuters said drinking coffee at home is the preferred way to consume the beverage, with 79% of those surveyed saying they had some this way the previous day. Coffee consumed away from home came in at 36%.
Dive Insight:
Americans are enjoying a variety of coffee types and styles they didn't have access to just a few years ago. The convenience factor also is playing a role in increased consumption as some people get their own machines to make espressos, lattes and other coffee drinks that they can enjoy at home or drink on their way to work in the car. Coffee houses and regional brands such as Starbucks and Peet's Coffee also have influenced interest in coffee, particularly among millennials.
It's no wonder that big food companies have been moving into the space by acquiring startup coffee companies and by debuting new upscale products. AB Holdings has purchased a collection of U.S. coffee brands in recent years, including Keurig Green Mountain, Peet's Coffee and Stumptown Coffee Roasters.
Nestle bought a majority stake last year in Blue Bottle Coffee and acquired Chameleon Cold-Brew. J.M Smucker's Folgers brand, long known for its ground coffee in a metal container, is introducing a new, higher-end brand of 100% arabica coffee in April aimed at winning back millennials and other people who have switched to pods and gourmet brews. And Dr Pepper Snapple and Keurig Green Mountain are expected to close their merger later this year, which could influence what types of coffee products emerge next in the marketplace or how they are embraced by consumers.
Due to the increase in coffee consumption and the availability of new and innovative products, the growth rate is very promising. Consumption grew by almost 8% from 2015 to 2016. As demand grows, other outlets such as convenience stores, fast-food restaurants and gas stations are now selling high-quality coffee — and often at much lower prices than the premium coffee shops. Busy consumers appreciate being able to pick up a quick cup of coffee on their way to or from work, or for a quick afternoon pick-me-up, so the trend is also responding to their lifestyles.
Younger coffee drinkers are demanding more cold-brew, ready-to-drink and gourmet coffee products, which has bumped up consumption figures. According to the survey, 48% of millennials said they had consumed a gourmet cup of coffee the previous day.
Even though consumers can easily get a jolt of caffeine in snacks, water and even gum, it's interesting that so many of them are choosing to get it the old-fashioned way — in a cup of joe. That trend has gone up and down in recent years but seems to be on an upward trajectory now, so brands are taking advantage and riding along to see how high it can go. As more beverage companies, desperate for growth, increase the quality of their coffee, competition will continue to increase and coffee makers will increasingly have to compete on factors such as price, convenience and the ever-important taste.