Thrive Market has noted a growing consumer trend toward multifunctionality in coffee, as illustrated by brands such as Four Sigmatic.
Experiments in Coffee
Multifunctionality is a growing trend within coffee as more consumers are seeking coffee that provides more than just a morning boost, but also ingredients such as mushrooms and adaptogens that help the body manage stress and restore balance after a stressful situation.
According to Dang, the growing popularity of coffee containing these ingredients is the result of consumers doing more research as they seek healthier alternatives. Also, companies and brands have expanded their marketing efforts.
“I think it’s really all about proper education,” she explains. “We have had these types of products for a while, but it was very niche. Now, with more education and marketing of these products, the consumer is understanding the benefits of these products and exactly what they do.”
Ackrill notes that consumers are experimenting with various methods in both hot and cold coffee and with additives such as nondairy nut-based whiteners like oak milk, and functional additives that include vitamin or protein powders.
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Additionally, instant coffee, which traditionally is viewed as a choice for older consumers, has gained popularity with younger consumer groups. Driving this growth is the social media trend of “whipped coffee” that uses instant coffee. While this trend started during the pandemic, younger consumers have continued it post-pandemic, she says.
Seeking Value and Sustainability
As with every consumable category in recent years, economics have had an impact on consumer choices. As a result, Dang says that Thrive Market has seen a shift in its customer purchase habits to private label products as shoppers have sought to save money and find a better value. That growing desire for better value has led Thrive to launch value pack sizes.
“That’s been helpful to alleviate costs,” Dang notes of the value pack additions. “It’s more of an upfront cost, but our customers realized the savings over time. Our members are pretty savvy in terms of price savings.”
Club Coffee’s Ackrill says that inflation has affected the coffee choices of consumers, with private label brands representing everyday value and becoming more popular with shoppers.
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“Higher prices overall have impacted what and where consumers are buying their coffee,” she observes. “For example, if a value brand raised its price and that price was closer to the price of a premium brand, consumers may choose to buy the premium brand instead of the value brand. Additionally, consumers are also shifting to alternate channels, from traditional grocery to clubs and e-commerce channels, if there is more choice and value.”
As with other retailers, Thrive has also seen private label coffee sales grow. While price/value is a key factor in consumers choosing the retailer’s own-brand coffee over national brands, sustainability is also playing a significant role in the decision-making process of shoppers.
Dang points out that Thrive’s coffee assortment has long been regeneratively grown, a process that includes several components such as crop biodiversity, minimizing water usage and ensuring farmers are paid a premium for the coffee beans they harvest.
“While regenerative growing has long been a big component of our coffee, we never educated our members about it,” she observes. “But they are starting to understand it more, so that adds to our sustainability message, along with the quality of ingredients we use.”