Despite the specialty coffee craze at limited-service restaurants, regular hot coffee still accounts for the highest level of reported consumption among consumers surveyed by Technomic. Of consumers recently surveyed, 60 percent reported drinking regular hot coffee or tea within the last month, second only to the 62 percent of consumers who had a non-diet carbonated soft drink during the same time period.
Technomic Vice President Joe Pawlak says understanding consumer motivations during various dayparts can help improve sales for operators and suppliers. “Consumers who regularly purchase coffee on their way to work are motivated by the convenience of the location, but significantly, they are actually more motivated by the quality of the coffee, making them important loyal customers who return often, integrating the same locations into their normal routines.”
In order to uncover insights and opportunities in coffee and tea, Technomic has developed the Market Intelligence Report: Coffee and Tea. Interesting findings include:
Fourteen percent of consumers say they are making more purchases of regular hot coffee today than they did two years ago, and 10 percent say the same about iced tea by the cup or glass.
Green tea, healthful and antioxidant-rich, is of interest to nearly three out of four consumers (73 percent), making it the most appealing flavor for hot or iced tea. In recent years, the number of green tea products has increased significantly on chain menus, according to MenuMonitor data. Lemon and honey are also appealing tea flavors for a sizeable percentage of consumers (61 percent and 60 percent, respectively).
Overall, grocery, drug and mass-merchandise stores have experienced a nominal 15.9 percent increase in coffee sales from 2007-2010. Although each type of retailer saw a gain, mass merchandisers achieved the biggest increase (53.1 percent) to coffee sales of $318 million in 2010 from $208 million in 2007. While price increases played some role (see below), the rise is also due to mass merchandisers such as Target expanding their food and beverage offerings, increasing pressure on traditional food stores.
With the exception of frozen/blended coffee drinks, all other types of coffee and tea drinks have steadily increased in price since 2008. Offered for an average price of $2.25 in 2008, regular coffee now sells for an average of $2.36. Similarly, tea/iced tea products have seen their prices go up, increasing from an average of $2.40 in 2008 to $2.57 two years later.