A new generation of coffee drinkers are shaping the coffee industry! According to market research firm, Packaged Facts, coffee sales are going strong. The research firm stated that in 2015, the U.S. market for packaged and ready-to-drink coffee sold at retail was estimated at $13.5 billion. By 2020, sales are predicted to be close to $18 billion in the U.S. Traditional coffee products such as ground coffee and instant coffee has been in the decline. Ground coffee is still the largest segment, but single-cup coffee is catching up quickly!
There are three segments that have lead to growth in the coffee industry:
- Single cup coffee
- Cappuccino/iced coffee
- Ready-to-drink coffee
Many older and traditional consumers are still purchasing ground coffee in cans and some have moved toward specialty coffee. Millennials are drinking more specialty coffee than any other generation. In fact, this generation is drinking more coffee than other generations. Millennials are much less likely to drink coffee at breakfast, but they will drink it at lunch or dinner or in the afternoon or evening. According to the Specialty Coffee Chronicle, almost half of the population under 40 is more likely to consume coffee outside of the home. Coffee Talk stated that approximately 30% of coffee consumption for young coffee drinkers is away from home.
Younger coffee drinkers are more concerned with the entire coffee supply chain especially sustainability. The market share of gourmet coffee beverages (gourmet traditional coffee, espressos, iced or frozen drinks, etc.) have continued to increase especially among younger audiences. Older Millennials are the most likely age group to drink cappuccinos, mochas, espressos, gourmet coffee, caffè Americano, flat white, cold brew, and nitrogen infused coffee. The number of cups of coffee consumed in the U.S. decreased over the past year, but retail earnings have still increased as consumers spend more money on premium coffee products. Over the years consumers have shown that they are willing to pay more for a higher quality premium cup of coffee!