Category Spotlight: Coffee
Among single-cup brands, private label continues to see double-digit growth in both dollar and unit sales, according to Chicago-based IRI. Dunkin’ Donuts also continues to be a bright point in the segment, similarly boasting double-digit dollar and unit sales during the period.
Market penetration for single-cup is particularly sizeable, given that the requirements for equipment can be a costly upfront investment, Mintel notes. However, equipment requirements could place limitations on the segment, as could negative perceptions such as high cost per cup and environmental impact from used single-cup offerings.
Progressive Grocer's 2018 Consumer Expenditures Study Data
Download“While eco-friendly claims are making their way into the single-cup segment, potentially addressing environmental concerns, negative perceptions suggest that a ceiling does exist for market penetration, making it likely that usage will eventually hit its peak,” Mintel observes in the report.
Turning to attributes, consumer desire for premium products and experiences is in vogue, says Chicago-based market research firm Euromonitor in its February report, “Coffee in the US.” Coffee origin in particular has increasingly become a significant criterion by which consumers choose their coffee. Roasters that feature the region in which beans are cultivated are associating coffee with terms typically reserved for wine, such as “terroir.”
Premium brewing methods that highlight the natural flavor of beans are also growing in popularity, Euromonitor notes in its report. Still, the fresh whole-bean segment appears to be slowing in terms of volume growth, suggesting that while consumers are “hungry for methods” that produce higher-quality coffee, there remains a limit to the amount of time and effort they’ll spend in preparing and brewing coffee.