National Coffee Day sees more Americans partaking and reaching for premium options
NCA’s 2017 National Coffee Drinking Trends found a whopping 62% of Americans drink coffee daily, up from 57% in 2016, thanks in part to increased consumption by younger consumers and a heightened interest in gourmet varieties across most demographics.
Specifically, it found significant growth in daily consumption by 13- to 18-year-olds in 2017 with 37% of this group drinking coffee daily compared to just 31% in 2016 and a mere 23% in 2014. The next group up, 18- to 24-year-olds, didn’t see as much of a bump – growing to 50% from 48% – but it is still notable.
Research from IBIS World suggests these jumps, while significant, are coming off of a small base and need to be kept in perspective. If found consumers younger than 24 years make up only 4.8% of the total US coffee market in 2016, which reinforces the idea that the sharp increase is coming off a small base. Comparatively, consumers 40 to 59 years make up the largest percentage of the coffee market at 63.2%, making the growth NCA found in this segment more impressive.
NCA found an 11-point uptick to 64% of 40- to 59-year-olds who consume coffee daily and a 4-point increase to 68% in adults 60 years and older.
Looking forward, age is not the only demographic manufacturers should watch for growth opportunity. IBIS World predicts that Latinos will become an increasingly important target segmentation given that they currently consume the largest share of higher priced gourmet coffee on a daily basis at about 69% compared to just 59% of whites, 56% of Asians and 47% of blacks.
Premium coffee becomes a hot commodity
Given the predictions that the Latino market in the US will continue to explode in coming years, IBIS World suggests they also will drive demand for gourmet coffee in the next five years.
The Latino market is not the only one focusing on gourmet coffee – rather, NCA data suggests all demographics are. It found daily consumption of gourmet coffee increased 15 percentage points to 39% of 40- to 50-year-olds. It also climbed 3 percentage points to 39% for 18- to 24-year-olds, 9 percentage points to 50% for 25- to 39-year-olds and 10 percentage points to 34% among adults 60 years and older.
Overall, this breaks down to a whopping 70% of the cups of coffee consumed across age groups were gourmet versus 30% non-gourmet, NCA adds.
Demand for premium-coffee will not slow in coming years, according IBIS World, which says premium coffee currently generates about 9.3% of total industry revenue and projects it will rise in line with increased per-capita disposable income at an annual rate of 1.8% through 2022.
This creates opportunity not just for food service, but also at retail as illustrated by Nestle offering specialized instant cappuccinos and Starbucks selling VIA instant coffee options on store shelves, IBIS World notes in its Coffee Production in the US Industry Report.
In addition, it notes, “demand for specialized coffee, especially in the single-use servings like K-Cups, will enable industry operators to mark up coffee prices.”
