Coffee and Ready-to-Drink Coffee in the U.S.: The Market and Opportunities in Retail and Foodservice, 6th Edition
As the U.S. economy slid deeper into recession during 2009, coffee marketers and foodservice operators moved in the opposite direction, digging out of the trench of 2008 with a variety of strategies designed to capitalize on the fact that even upscale coffee is a relatively thrifty luxury that offers comfort during stressful times. Two success stories were the rebound of Starbucks on the foodservice side and the revitalization of the former P&G retail coffee portfolio by J M. Smucker. Although the era when the coffee market grew effortlessly through premiumization may have ended, such upscale trends as the shifts towards specialty coffee beverages, gourmet beans and ethical consumerism are still clearly in force. What’s more, there’s ample opportunity for companies to capitalize on such trends as the economy recovers—not by ignoring the tougher times or reversing strategy, but by crafting an image that’s both upscale and responsive to consumers’ stronger-than-ever demand for value.
Packaged Facts’ Coffee and Ready-to-Drink Coffee in the U.S.: The Market and Opportunities in Retail and Foodservice, 6th Edition offers a comprehensive look at this $47.5 billion market, examining both the retail and foodservice sides of the business as well as the growing overlap of the two. On the retail side, the report analyzes coffee sold for future brewing—beans and ground, and instant—as well as RTD coffee drinks (à la Frappuccinos), as well as coffee enthusiast’s new brewing method of choice: single-serve (pod) coffee. Positive upscaling trends that slowed during the weak economy will gradually regain the upper hand, the report predicts, resulting in increasing annual percentage sales gains lifting sales by 23% by 2014 to reach $58.3 billion. The report examines sales across the entire retail universe, using Information Resources, Inc. InfoScan Review data and SPINSscan data to extensively chart performance, market composition and marketer/brand performance for the mass-market and natural supermarket channels.
Comprehensive coverage is also devoted to the vast foodservice market for coffee, including the expansion of specialty drinks at such mass-market venues as McDonalds, Dunkin’ Donuts and, most recently, Burger King with its planned 2010 roll-out of Starbucks’ Seattle’s Best. Supplementing the market tracking and forecasting of previous editions, Coffee and Ready-to-Drink Coffee in the U.S.: The Market and Opportunities in Retail and Foodservice, 6th Edition pays special attention to trends in new product development, inclusive of valuable global perspective; details competitive opportunities, including via in-depth company profiles; explores winning marketing methods including Web-based activity; and provides detailed consumer profiling using Experian Simmons data for 2009.
Packaged Facts’ Coffee and Ready-to-Drink Coffee in the U.S.: The Market and Opportunities in Retail and Foodservice, 6th Edition offers a comprehensive look at this $47.5 billion market, examining both the retail and foodservice sides of the business as well as the growing overlap of the two. On the retail side, the report analyzes coffee sold for future brewing—beans and ground, and instant—as well as RTD coffee drinks (à la Frappuccinos), as well as coffee enthusiast’s new brewing method of choice: single-serve (pod) coffee. Positive upscaling trends that slowed during the weak economy will gradually regain the upper hand, the report predicts, resulting in increasing annual percentage sales gains lifting sales by 23% by 2014 to reach $58.3 billion. The report examines sales across the entire retail universe, using Information Resources, Inc. InfoScan Review data and SPINSscan data to extensively chart performance, market composition and marketer/brand performance for the mass-market and natural supermarket channels.
Comprehensive coverage is also devoted to the vast foodservice market for coffee, including the expansion of specialty drinks at such mass-market venues as McDonalds, Dunkin’ Donuts and, most recently, Burger King with its planned 2010 roll-out of Starbucks’ Seattle’s Best. Supplementing the market tracking and forecasting of previous editions, Coffee and Ready-to-Drink Coffee in the U.S.: The Market and Opportunities in Retail and Foodservice, 6th Edition pays special attention to trends in new product development, inclusive of valuable global perspective; details competitive opportunities, including via in-depth company profiles; explores winning marketing methods including Web-based activity; and provides detailed consumer profiling using Experian Simmons data for 2009.
CHAPTER 1: EXECUTIVE SUMMARY
Introduction
Scope of Report: Foodservice and Retail
Report Methodology
The Market
Economic Downturn Takes a Toll
Figure 1-1: Share of Total U.S. Dollar Sales of Coffee: Foodservice vs. Retail, 2003, 2007 and 2009 (percent)
Dry Coffee Category Leads in Market Share
Foodservice Sales Gain in Restaurants
Supermarkets Lose Share to Cheaper Alternatives
The Economy and Its Impact
Coffee Sales Fortunes to Improve Through 2014
The Marketers
Thousands of Marketers
Marketers Employ Multiple Sales Channels
Smucker Is No. 1 Coffee Marketer
Top 10 Brands in Natural Supermarket Channel
Marketing & New Product Trends
Upscale Coffee Trends Collide with Downscale Economy
Thrifty Upscale Coffee: Can It Work Outside Foodservice?
Ideological Coffee: Organic, Natural and Fair Trade
Shade Grown Coffee
Foodservice and Retail Trend Overview
Increasing Overlap and Cross-Competition Between Foodservice and Retail
Despite Chain Restaurant Proliferation, Mom and Pops Remain Industry Paradigm
Specialty Coffee Competition Intensifies and Diversifies
Burger King to Roll Out Seattle’s Best in 2010 as Part of Revamped Breakfast Program
Coffee Is Best-Selling Hot Beverage at Convenience Stores
Supermarkets Lead Retail Market for Packaged Coffee
Fair Trade Coffee Boosts Walmart’s Image, Sales
Consumer Trends
More than 50% of Americans Drink Coffee Daily
Consumer Love Affair with Gourmet Coffee Wanes a Bit
Starbucks Restaurants Feel Recession Squeeze
Usage of Coffee by Type
Figure 1-2: Household Usage Rates of Coffee: By Product Type, 2009 (percent of U.S. households)
Brands Usage Rates
CHAPTER 2: THE PRODUCTS
Introduction
Scope of Report: Foodservice and Retail
Dollar Sales Based on Retail Value
Excluded Products
Product Breakouts
Product Types
Coffee Brewed and Served by the Cup
Ground Coffee
Whole Bean Coffee
Single-Serve Pods and Capsules
Instant/Freeze-Dried Coffee
Instant Cappuccino and Specialty Coffee Mixes
Liquid Coffee Concentrates
Packaged Ready-to-Drink (RTD) Coffee Beverages
IRI Categories
Additional Descriptors
Arabica vs. Robusta
Decaffeinated Coffee
Types of Roasts
Espresso: A Brewing Process as Well as a Roast
Blends vs. Varietals
Estate Coffee
Flavors
Organic Coffee and Sustainably Grown Coffee
Fair Trade Coffee
Shade Grown Coffee
Figure 2-1: Tree Canopies In Coffee Growing (levels of shade)
Global Market Overview
A Primary Commodity
South America and Central America Account for Two-Thirds of World Coffee Production
Figure 2-2: World Coffee Production: Marketing Years, 2003/2004-2009/2010 (number of bags in millions)
Europe and Asia Pacific Lead in New Coffee Product Introductions
Table 2-1: Share of Global Coffee Product Launches: By Region and Annual Total, 2005-2009 (number)
Nestlé Leads by Number of Coffee Product Introductions
Table 2-2: Top 10 International Marketers: By Number of Coffee Product Launches, 2005-2009 (number)
Instant Gratification Conquers the World
Table 2-3: Top 20 Package Tags/Marketing Claims: By Number of Global Coffee Product Launches, 2005-2008
CHAPTER 3: THE MARKET
Market Size and Growth
Economic Downturn Takes a Toll
Table 3-1: Total U.S. Sales of Coffee, 2005-2009 (in millions of dollars)
Foodservice Sales Top $41 Billion
Table 3-2: U.S. Sales of Coffee Through Foodservice Channels, 2005-2009 (in millions of dollars)
Retail Sales of Coffee Hit $6 Billion
Table 3-3: U.S. Sales of Coffee Through Retail Channels, 2005-2009 (in millions of dollars)
Foodservice and Retail Shares Remain Stable
Figure 3-1: Share of Total U.S. Dollar Sales of Coffee: Foodservice vs. Retail, 2003, 2007 and 2009 (percent)
Retail Market Composition
Dry Coffee Category Leads in Market Share
Table 3-4: IRI-Tracked Sales and Share of Coffee by Category, 2009 (in millions of dollars)
Ground Coffee Segment Dominates Dry Coffee Category
Table 3-5a: IRI-Tracked Sales of Dry Coffee Category: Dollar Sales, Change and Category Share by Segment, 2009 (in million of dollars)
Table 3-5b: IRI-Tracked Unit and Volume Sales of Dry Coffee: By Segment, 2009 vs. Year Ago (in millions)
Relative Fortunes of Coffee Segments Remain Constant Despite Recession
Overarching Dry Coffee Trend Is—Back to the Future
Table 3-6: IRI-Tracked Sales of Dry Coffee by Segment: Basic vs. Processed, 2008-2009 (in millions of dollars)
Decaf Coffee Continues to Slide
Table 3-7: IRI-Tracked Dollar Sales of Decaffeinated Coffee: By Segment, 2009 (in millions of dollars)
Instant Coffee Sales Go Slowly
Table 3-8: IRI-Tracked Dollar Sales of Instant Coffee: By Segment, 2009 (in millions of dollars)
RTD Coffee Dominates Liquid Coffee Category
Table 3-9a: IRI-Tracked Dollar Sales of Liquid Coffee: By Segment, 2009 (in millions of dollars)
Table 3-9b: IRI-Tracked Unit and Volume Sales of Liquid Coffee Category: By Segment, 2009 vs. Year Ago (in millions)
Bolthouse Farms Reigns in RFG RTD Coffee Drink Segment
Table 3-10: IRI-Tracked Dollar Sales of Refrigerated RTD Coffee, 2009 (in millions of dollars)
Cool Brew Lifts Refrigerated Coffee Concentrate Segment
Sales by Channel
Foodservice Sales Gain in Restaurants
Table 3-11: Share of U.S. Foodservice Dollar Sales of Coffee: By Venue, 2008-2009 (percent)
Supermarkets Lose Share to Cheaper Alternatives
Table 3-12: Share of U.S. Retail Dollar Sales of Coffee: By Channel, 2008-2009 (percent)
Seasonality and Regionality
Retail Sales Highly Seasonal
HealthSaver Caffeinated Cities Survey Details Trends by Region
Table 3-13a: U.S. Cities with Highest Levels of Coffee Consumption: Regular Coffee & Specialty Coffee Drinks, 2007 vs. 2008
Table 3-13b: U.S. Cities with Lowest Levels of Coffee Consumption: Regular Coffee & Specialty Coffee Drinks, 2007 vs. 2008
Table 3-13c: “Most Caffeinated U.S. Cities”: 2007 vs. 2008
Table 3-13d: “Least Caffeinated U.S. Cities”: 2007 vs. 2008
Table 3-13e: U.S. Cities Most Likely to Say Caffeine Is Good for You: 2007 vs. 2008
Table 3-13f: U.S. Cities Most Likely to Say Caffeine Is Bad for You: 2007 vs. 2008
Northwest Coffee Culture Hides Specialty Coffee’s East Coast Roots
Market Outlook
The Economy and Its Impact
A Shift to Gourmet/Specialty Coffee
More Than Half of Americans Drink Coffee Daily
Competition from a Broad Spectrum of Beverages
Table 3-14: IRI-Tracked Sales and Share of Major Beverage Categories, 2009 vs. Year Ago (in millions of dollars)
RTD Tea Beats Out RTD Coffee on Price
Table 3-15: IRI-Tracked Dollar Sales of RTD Coffee vs. RTD Tea, 2009 vs. Year Ago (in millions of dollars)
New Spins on Caffeine
New Research Supports Coffee’s Health Halo
Single-Serve Systems Are Here to Stay
Coffee Pricing Is Volatile
Raw Coffee Prices Shrink in 2009
Table 3-16: Composite Green Coffee Prices, 2005-2008 (in cents per pound)
Looking Ahead: Projected Market Growth
Economy Slowly Improving
Focus on Environmental and Social Responsibility Will Endure
Coffee as the New Health Food
Hispanic Coffee Sales to Grow
Table 3-17: Projected Hispanic Population as Percent of Total U.S. Population: 2000, 2007, 2010 and 2015
Coffee Sales Fortunes to Improve Through 2014
Table 3-18: Projected Total U.S. Sales of Coffee, 2009-2014 (in millions of dollars)
Foodservice Sales to Near $52 Billion
Table 3-19: Projected U.S. Sales of Coffee Through Foodservice Channels, 2009-2014 (in millions of dollars)
Steady Growth in Retail Sales
Table 3-20: Projected U.S. Sales of Coffee Through Retail Channels, 2009-2014 (in millions of dollars)
CHAPTER 4: THE MARKETERS
Competitive Overview
A Complex Marketing Structure
Thousands of Marketers
Marketers Employ Multiple Sales Channels
Major Coffee Marketers
Foodservice Cross-Over
Specialty Coffee Marketers
Hispanic-Style Coffee Marketers
Joint Ventures Provide Synergies
The North American Coffee Partnership
Coca-Cola, Godiva, Caribou and More
Competitive Positioning
Marketer and Brand Shares
Methodology
Smucker Is No. 1 Coffee Marketer
Table 4-1: Top 10 Coffee Marketers by IRI-Tracked Sales and Market Share, 2009 (in millions of dollars)
Smucker and Kraft Dominate Mammoth Ground Coffee Segment
No Other Marketers Claim Double-Digit Share
Smaller Marketers Make Impressive Gains
Smucker Leads Ground Decaf Segment
Nestlé Tops $420 Million Instant Coffee Segment
Kraft and Smucker Lead Instant Decaf Segment
Eight O’Clock Moves Up in Whole Beans Segment
North American Coffee Partnership Owns RTD Coffee Segment
Wm. Bolthouse Reigns in Refrigerated RTD Segment
Cool Brew Dominates Tiny Refrigerated Coffee Concentrate Segment
Top 10 Brands in Natural Supermarket Channel
Table 4-2: Leading Ground Coffee Marketers and Brands: By IRI-Tracked Sales and Share, 2009 (in millions of dollars)
Table 4-3: Leading Ground Decaffeinated Coffee Marketers and Brands: By IRI-Tracked Sales and Share, 2009 (in millions of dollars)
Table 4-4: Leading Instant Coffee Marketers and Brands: By IRI-Tracked Sales and Share, 2009 (in millions of dollars)
Table 4-5: Leading Instant Decaf Coffee Marketers and Brands: By IRI-Tracked Sales and Share, 2009 (in millions of dollars)
Table 4-6: Leading Whole Beans Coffee Marketers and Brands: By IRI-Tracked Sales and Share, 2009 (in millions of dollars)
Table 4-7: Leading Shelf-Stable RTD Coffee Marketers and Brands: By IRI-Tracked Sales and Share, 2009 (in millions of dollars)
Table 4-8: Leading Refrigerated RTD Coffee Marketers and Brands: By IRI-Tracked Sales and Share, 2009 (in millions of dollars)
Table 4-9: Leading Refrigerated Coffee Concentrate Marketers and Brands: By IRI-Tracked Sales and Share, 2009 (in dollars)
Table 4-10: Top 10 Brands of Ground Coffee in Natural Supermarket Channel: Market Share and Dollar Sales, 52 Weeks Ending January 23, 2010 vs. Year Ago (in millions of dollars)
CHAPTER 5: MARKETING & NEW PRODUCT TRENDS
Upscale Coffee Trends Collide with Downscale Economy
Figure 5-1: Number of Coffee Beverage Introductions, 2005-2009
Figure 5-2: U.S. Gross Domestic Product, 2005-2009 (in dollars)
Table 5-1: Number of Coffee Beverage Introductions by Package Tags/Claims, 2005-2009
Will Economic Turnaround Trigger New Product Turnaround?
Table 5-2: Number of Coffee Beverage Introductions, 2008 vs. 2009
Thrifty Upscale Coffee: Can It Work Outside Foodservice?
Ideological Coffee: Organic, Natural and Fair Trade
Whole Foods vs. Its Customers: Nobody Wins
Certification Labeling: Baffling for Consumers and Marketers Alike
Starbucks C.A.F.E.: Not Where You Go for a Cup of Joe
Figure 5-3: C.A.F.E Scorecard Excerpt
Ethical Direct Trade
UTZ Certified Good Inside: Is It Good Enough for True Believers?
Shade Grown Coffee
Three Strikes and You’re In—Triple Certification
Table 5-3: Caffe Ibis Coffee—Triple Certification Labels
“Green” Labels, Labels, Everywhere
Table 5-4: Organic, Shade Grown (aka Bird Friendly), and Fair Trade Labels
Products Launches May Include Myriad Products
Green Mountain Coffee Entries Includes Donut House Collection
The Four Runners Up
2009 Whole Bean and Ground Coffee Intros Exhibit Variety and Growing Sophistication
Single-Origin Coffees
Limited Editions
New Bottled Drinks Pose Question: Is Coffee the New Chocolate?
Coffee-Energy Drink Connection Continues in 2009
Java Has Been a Monster
Coca-Cola Goes Full Throttle into Hybrid Coffee/Energy Drinks
7-Eleven’s Fusion Energy Coffee Launches Foodservice Trend
Table 5-5: Coffee Beverages Introduced in 2009
CHAPTER 6: FOODSERVICE AND RETAIL TREND OVERVIEW
Introduction
Increasing Overlap and Cross-Competition Between Foodservice and Retail
Foodservice Overview
Foodservice Venues
Foodservice Distribution Methods
Away from Home Food Spending Remains Static
Full-Service Restaurant Share of Sales Surges
Table 6-1: Average U.S. Household Expenditures on Food, 2004-2008 (in millions of dollars)
Table 6-2a: Dollar Sales of Meals and Snacks Away from Home: By Type of Outlet, 2004-2008 (in millions of dollars)
Table 6-2b: Dollar Sales of Meals and Snacks Away from Home: By Type of Outlet, 2004-2008 (in millions of dollars)
Table 6-3a: Share of Dollar Sales of Meals and Snacks Away from Home: By Type of Outlet, 2004-2008 (percent)
Table 6-3b: Share of Dollar Sales of Meals and Snacks Away from Home: By Type of Outlet, 2004-2008 (percent)
Restaurant Industry Trade Group Projects Growth in 2010
Table 6-4: Restaurant Industry Sales: 2008-2010 (in billions of dollars)
Despite Chain Restaurant Proliferation, Mom and Pops Remain Industry Paradigm
Organic Coffee “Hot” in 2010 Restaurant Survey
Specialty Coffee Competition Intensifies and Diversifies
Burger King to Roll Out Seattle’s Best in 2010 as Part of Revamped Breakfast Program
Different Demographics?
Coffeehouses, Kiosks and Coffee Carts
Company Snapshot: Tim Hortons
Drive-Thrus: Competitive Advantage or Retrograde Concept?
The Gasoline Factor
Coffee Is Best-Selling Hot Beverage at Convenience Stores
Coffee Tops C-Store Shopper Lists
7-Eleven Achieves Franchise-Only Status in U.S. While Playing Up Coffee
“Looking Good In Any Cup Size” Ad Campaign Introduces New Iced Coffee Line
New Coffee Is Old News at 7-Eleven
7-Eleven Announces NYC Expansion Plans
Sheetz Specialty Coffee Drinks Include Lattes, Cappuccinos and Mochas
ExxonMobil Combines Upscale Coffee Image with Relaxed Approach
Hess/Dunkin’ Donuts Rollout Continues
Walgreen Tests Café W
Licensed Cafés and Kiosks
Books Go Better with Cafés
Mountain Mudd Franchises Spread from Billings to Lebanon
Less Workers = Less Office Coffee Service
Vending Machines Lagging in U.S., Picking Up in Britain
The Starbucks Vending Machine Experience
For Hotels, It’s “Goodbye Freeze-Dried, Hello Espresso”
Airlines Flying High with Coffee Grounds
Retail Trend Overview
Retail Distribution Methods
Types of Retail Outlets
Supermarkets Lead Retail Market for Packaged Coffee
Mass Merchandisers, Supercenters & Warehouse Clubs
Walmart a Top Coffee Seller
Fair Trade Coffee Boosts Walmart’s Image, Sales
Contest for National Warehouse Club Supremacy
Gourmet/Specialty Food Stores
Light Roast Coffee
Medium Roast Coffee
Dark Roast Coffee
Specialty Coffee Stores
Company Snapshot: The Coffee Bean & Tea Leaf
Health and Natural Food Stores
Top Coffee Brands in Natural/Specialty Arena
Table 6-5: Top UNFI Brands in Natural/Specialty Channels: by Share and Number of SKUs, 2008 vs.2009 (percent and number)
Internet, Mail Order, and Subscriptions
CHAPTER 7: COMPETITOR PROFILES
Competitor Profile: Caribou Coffee Co., Inc.
Company Overview
Rebuilding and Rebranding Post Recession
Commercial Expansion Shows Results
Caribou Coffeehouses’ Rustic Design Reinforces Brand Identity
We’re #2, We Try Harder
Reinventing the Hot Chocolate Wheel
Reaching Out to Consumers on a Number of Fronts
Competitor Profile: Dunkin’ Brands, Inc
Company Overview
“We Are Mainstream America”
“You Kin’ Do It” Campaign Cheers on “Everyday People”
Dunkin’ Pushes Forward with Expansion Plans
Various Types of New Outlets Targeted
Franchisees Unhappy with Increased Retail Competition
Competitor Profile: Green Mountain Coffee Roasters, Inc
Company Overview
Specialty Coffee Unit Growing Rapidly
Keurig Unit Growing Even More Rapidly
Green Mountain’s CAGR Has Risen to 53% Since Keurig Acquisition
Green Mountain Acquires Tulley’s for $40.3 Million
Green Mountain Acquires Timothy and Revises Projections Up Once More
Balanced, Multichannel Distribution
How Keurig Grows Sales
Social Responsibility: Putting Your Money Where Your Mouth Is
Company Continues Ethical/Fair Trade Marketing
Competitor Profile: Kraft Foods, Inc
Company Overview
Table 7-1: Kraft, Inc. Net Revenues: By Region and Category, 2008 (in billions of dollars)
Kraft Acquires Cadbury
The Maxwell House Roller Coaster
Lawsuit with P&G Settled
Brewing Some Good Marketing
Yuban Is Revitalized
Sanka Suffers from Image Problem
General Foods International Coffee Mixes Losing Their Luster
Starbucks Agreement Has Had Long-Term Benefits
Gevalia Kaffe Gets New U.S. Push
Kraft’s Tassimo Home Brewing System Succeeds in Europe But Stumbles in the U.S.
Kraft Switches to Bosch
Kraft Settles Lawsuit with Keurig
Tassimo Looking to Bring Its European Mojo to the U.S
Advertising “Webisodes” Fall Flat
Tassimo Has Potential
Competitor Profile: McDonald’s Corp.
Company Overview
McCafé: An Idea Whose Time Has Come
Concept Traces Back to Premium Roast Coffee Upgrade
Adding Coffee Bars
Advertising Approaches: Special, But Unsnobby
McCafés a Global Success Story
McDonald’s Japan Shoots for No. 1 in Espresso Drinks
Competitor Profile: Massimo Zanetti Beverage USA, Inc.
Company Overview
The Third Largest Roaster in the U.S
Chock Full O’Nuts: “A Heavenly Coffee”—Literally
Hills Bros. Popular with Heavy Coffee Drinkers
MJB Premium Coffee in the Pacific Northwest
Chase & Sanborn Offers Affordable Price
Cafés and Foodservice
Competitor Profile: Nestlé USA, Inc.
Company Overview
Nestlé’s U.S. Operations: Vast and Varied
Joint Ventures with Jamba Juice & Coke
Nestlé Leads Instant Coffee Market
Nespresso’s Speedy Nespresso Brings Delayed Financial Gratification
Worldwide Nespresso Gains 28% in Third Quarter of 2009
Nescafé Rolls Out Dolce Gusto
Competitor Profile: Peet’s Coffee & Tea, Inc.
Company Overview
Sales Grow Despite Recession
Two Business Segments: Retail Stores and Specialty Sales
Peet’s Pulls in Sails Against Headwind of Economy
Peet’s Mantra: “It’s All About the Coffee”
Peet’s Retail Stores Are Marching Eastward
Peet’s 10 Commandments
Now a National Brand in Grocery Channels
Partnership with Vistar Should Increase Office Sales
Two Types of Foodservice Accounts
Bidding War for Diedrich
Competitor Profile: Sara Lee Corp.
Company Overview
Sales Results
Sara Lee Sheds U.S. Retail Coffee and DSD Foodservice Coffee Businesses
DSD Sale Does Not Mean Capitulation in Foodservice Competition
Despite Divestitures, Sara Lee Still Brewing Up a Storm
Senseo a Global Single-Serve Brand
U.S. Customers Wait for Senseo to Return
Competitor Profile: The J.M. Smucker Co.
Company Overview
Smucker Acquires Coffee Brands from P&G
A Focus on Breakfast and Tradition
A Family Business with a Thirst for No. 1 Brands
Folgers Coffee Sales Perk Up Under Smucker
Pricing Key to Success
Competitor Profile: Starbucks Corp
Starbucks to World: “Accounts of My Demise Are Somewhat Exaggerated”
Table 7-2: Starbucks Results of Operations for Fiscal Years 2005-2009 (in millions of dollars)
Return of Prodigal CEO Reignites Company
Past Is Prologue as Starbucks Reevaluates and Regroups
Schultz Shutters Hundreds of Stores
Starbucks Takes Time Out to Retrain Baristas
The Vast Worldwide Starbucks Coffeehouse Phenomenon
Starbucks “Individualizes” New Outlets
Starbucks Testing 31-Oz. Trenta Iced Drinks
Other Strategic Initiatives
Fresh Appeal
New Machines
Pike Place Roast
Clover Upscale Brewed
Customer Loyalty Program
My Starbucks Idea Webpage
Table 7-3: “My Starbucks Ideas” by Type and Number as of December 8, 2009
Prior to Recession, Starbucks Expanded Drive-Thrus
Starbucks and Ad Agency Part Ways
Starbucks iPhone Apps
Despite Store Cutbacks, Starbucks Retains Brand Portfolio
Seattle’s Best Coffee & Torrefazione Italia
Seattle’s Best Goes Franchise Route
Foodservice Operations Suffer Setback During Inhospitable Times
Burger King to Roll Out Seattle’s Best Nationally
Profitable Partnerships in Consumer Packaged Goods
Kraft Markets Starbucks’ Ground and Whole Bean Coffee
The North American Coffee Partnership
Via Rollout Ongoing
Transformation Agenda Fuels Energy Drinks
Nutritional Health & Wellness to Promote Corporate Health & Wellness
Social Responsibility as Practice and Marketing Tool
Employees vs. Starbucks: You Win Some, You Lose Some
Tazo Tea & Ethos Water
Table 7-4: Tazo Tea—List of Hot Tea Products as of December 2009
Ethos Water: PR Plus or Ethical Dilemma?
Other Partnerships, Other Products
CHAPTER 8: THE CONSUMER
More than 50% of Americans Drink Coffee Daily
77% of Adults Drink Coffee Each Year
Consumer Love Affair with Gourmet Coffee Wanes a Bit
Consumption Among 18- to 24-Year-Olds Rebounds Slightly
Coffee Drinkers Know Home Isn’t Just Where the Heart Is
Brewing Method of Choice
Figure 8-1: How Consumers Get Their Morning Java Jolt, 2010 (percent)
Consumer Use and Demographics
The Simmons Survey System
Starbucks Restaurants Feel Recession Squeeze
Table 8-1a: Usage Rates for Starbucks Restaurants and Starbucks Packaged Coffee Products, 2006-2009 (percent of U.S. adults)
Table 8-1b: Adult Consumer Base for Starbucks Restaurants and Starbucks Packaged Coffee Products, 2006-2009 (number of U.S. adults in millions)
Table 8-2a: Fast-Food Breakfast Consumers: Usage Rates Overall and for McDonald’s, Starbucks and Dunkin’ Donuts, 2005-2009 (percent of U.S. adults)
Table 8-2b: Fast-Food Breakfast Consumers: Consumer Base Overall and for McDonald’s, Starbucks and Dunkin’ Donuts, 2005-2009 (number of U.S. adults in millions)
Usage of Coffee by Type
Figure 8-2: Household Usage Rates of Coffee: By Product Type, 2009 (percent of U.S. households)
Espresso/Cappuccino Has Youthful Demographic
Table 8-3a: Usage of Espresso/Cappuccino: By Household Age Group, 2009 (number in thousands, percent and index)
Table 8-3b: Usage of Ground/Whole Bean Coffee: By Household Age Group, 2009 (number in thousands, percent and index)
Types of Coffee Used Most
Figure 8-3: Coffee Usage Rates: By Product Type Most Often Used Per Household, 2009 (percent of U.S. Households)
Five-Year Trend by Types of Coffee Used
Table 8-4: Trended Number of Coffee Users: By Product Type Used Most Often, 2005-2009 (percent of U.S. households)
Demographic Indicators by Product Type
Regular
Ground Decaf
RTD Coffee Drinks
Instant Decaffeinated
Instant Specialty Flavored Coffee Mix
Whole Bean Coffee
Espresso/Cappuccino
Psychographics Reveal Unlikely Connection Between Flavored Mix & Whole Bean
Brands Usage Rates
Demographic Trends: Ground and Whole Bean Coffee Brands
Café Bustelo
Chock Full O’Nuts
Eight O’Clock
Folgers
Hills Brothers
Maxwell House
Yuban
Demographic Trends: Selected Espresso/Cappuccino Brands
Demographic Trends: Instant Coffee Brands
Demographic Trends: Instant Specialty Coffee Mix Brands
Demographic Trends: RTD Coffee Brands
Table 8-5: Top Demographic Indicators for Selected Types of Coffee 2009 (index of U.S. households)
Table 8-6a: Coffee Purchaser Food and Shopping Lifestyle Attitudes: By Selected Coffee Types, 2009 (index of U.S. households)
Table 8-6b: Coffee Purchaser Food and Shopping Lifestyle Attitudes: By Selected Coffee Types, 2009 (index of U.S. households)
Table 8-6c: Coffee Purchaser Food and Shopping Lifestyle Attitudes: By Selected Coffee Types, 2009 (index of U.S. households)
Table 8-7: Coffee Brands Used Most Often by Percentage of U.S Households, 2009 (percent of U.S. households)
Table 8-8: Top 10 Demographic Indicators for Selected Ground/Whole Bean Coffee Brands, 2009 (index of U.S. households)
Table 8-9: Top Demographic Indicators for Selected Espresso/Cappuccino Brands, 2009 (index of U.S. households)
Table 8-10: Top Demographic Indicators for Selected Instant Coffee Brands, 2009 (index of U.S. households)
Table 8-11: Top Demographic Indicators for Selected Instant Specialty Coffee Mix Brands, 2009 (index of U.S. households)
Table 8-12: Top 10 Demographic Indicators for Selected Ready-To-Drink (RTD) Coffee Brands, 2009 (index of U.S. households)
APPENDIX: Addresses of Selected Industry Associations, Marketers and Coffeehouse Chains
Introduction
Scope of Report: Foodservice and Retail
Report Methodology
The Market
Economic Downturn Takes a Toll
Figure 1-1: Share of Total U.S. Dollar Sales of Coffee: Foodservice vs. Retail, 2003, 2007 and 2009 (percent)
Dry Coffee Category Leads in Market Share
Foodservice Sales Gain in Restaurants
Supermarkets Lose Share to Cheaper Alternatives
The Economy and Its Impact
Coffee Sales Fortunes to Improve Through 2014
The Marketers
Thousands of Marketers
Marketers Employ Multiple Sales Channels
Smucker Is No. 1 Coffee Marketer
Top 10 Brands in Natural Supermarket Channel
Marketing & New Product Trends
Upscale Coffee Trends Collide with Downscale Economy
Thrifty Upscale Coffee: Can It Work Outside Foodservice?
Ideological Coffee: Organic, Natural and Fair Trade
Shade Grown Coffee
Foodservice and Retail Trend Overview
Increasing Overlap and Cross-Competition Between Foodservice and Retail
Despite Chain Restaurant Proliferation, Mom and Pops Remain Industry Paradigm
Specialty Coffee Competition Intensifies and Diversifies
Burger King to Roll Out Seattle’s Best in 2010 as Part of Revamped Breakfast Program
Coffee Is Best-Selling Hot Beverage at Convenience Stores
Supermarkets Lead Retail Market for Packaged Coffee
Fair Trade Coffee Boosts Walmart’s Image, Sales
Consumer Trends
More than 50% of Americans Drink Coffee Daily
Consumer Love Affair with Gourmet Coffee Wanes a Bit
Starbucks Restaurants Feel Recession Squeeze
Usage of Coffee by Type
Figure 1-2: Household Usage Rates of Coffee: By Product Type, 2009 (percent of U.S. households)
Brands Usage Rates
CHAPTER 2: THE PRODUCTS
Introduction
Scope of Report: Foodservice and Retail
Dollar Sales Based on Retail Value
Excluded Products
Product Breakouts
Product Types
Coffee Brewed and Served by the Cup
Ground Coffee
Whole Bean Coffee
Single-Serve Pods and Capsules
Instant/Freeze-Dried Coffee
Instant Cappuccino and Specialty Coffee Mixes
Liquid Coffee Concentrates
Packaged Ready-to-Drink (RTD) Coffee Beverages
IRI Categories
Additional Descriptors
Arabica vs. Robusta
Decaffeinated Coffee
Types of Roasts
Espresso: A Brewing Process as Well as a Roast
Blends vs. Varietals
Estate Coffee
Flavors
Organic Coffee and Sustainably Grown Coffee
Fair Trade Coffee
Shade Grown Coffee
Figure 2-1: Tree Canopies In Coffee Growing (levels of shade)
Global Market Overview
A Primary Commodity
South America and Central America Account for Two-Thirds of World Coffee Production
Figure 2-2: World Coffee Production: Marketing Years, 2003/2004-2009/2010 (number of bags in millions)
Europe and Asia Pacific Lead in New Coffee Product Introductions
Table 2-1: Share of Global Coffee Product Launches: By Region and Annual Total, 2005-2009 (number)
Nestlé Leads by Number of Coffee Product Introductions
Table 2-2: Top 10 International Marketers: By Number of Coffee Product Launches, 2005-2009 (number)
Instant Gratification Conquers the World
Table 2-3: Top 20 Package Tags/Marketing Claims: By Number of Global Coffee Product Launches, 2005-2008
CHAPTER 3: THE MARKET
Market Size and Growth
Economic Downturn Takes a Toll
Table 3-1: Total U.S. Sales of Coffee, 2005-2009 (in millions of dollars)
Foodservice Sales Top $41 Billion
Table 3-2: U.S. Sales of Coffee Through Foodservice Channels, 2005-2009 (in millions of dollars)
Retail Sales of Coffee Hit $6 Billion
Table 3-3: U.S. Sales of Coffee Through Retail Channels, 2005-2009 (in millions of dollars)
Foodservice and Retail Shares Remain Stable
Figure 3-1: Share of Total U.S. Dollar Sales of Coffee: Foodservice vs. Retail, 2003, 2007 and 2009 (percent)
Retail Market Composition
Dry Coffee Category Leads in Market Share
Table 3-4: IRI-Tracked Sales and Share of Coffee by Category, 2009 (in millions of dollars)
Ground Coffee Segment Dominates Dry Coffee Category
Table 3-5a: IRI-Tracked Sales of Dry Coffee Category: Dollar Sales, Change and Category Share by Segment, 2009 (in million of dollars)
Table 3-5b: IRI-Tracked Unit and Volume Sales of Dry Coffee: By Segment, 2009 vs. Year Ago (in millions)
Relative Fortunes of Coffee Segments Remain Constant Despite Recession
Overarching Dry Coffee Trend Is—Back to the Future
Table 3-6: IRI-Tracked Sales of Dry Coffee by Segment: Basic vs. Processed, 2008-2009 (in millions of dollars)
Decaf Coffee Continues to Slide
Table 3-7: IRI-Tracked Dollar Sales of Decaffeinated Coffee: By Segment, 2009 (in millions of dollars)
Instant Coffee Sales Go Slowly
Table 3-8: IRI-Tracked Dollar Sales of Instant Coffee: By Segment, 2009 (in millions of dollars)
RTD Coffee Dominates Liquid Coffee Category
Table 3-9a: IRI-Tracked Dollar Sales of Liquid Coffee: By Segment, 2009 (in millions of dollars)
Table 3-9b: IRI-Tracked Unit and Volume Sales of Liquid Coffee Category: By Segment, 2009 vs. Year Ago (in millions)
Bolthouse Farms Reigns in RFG RTD Coffee Drink Segment
Table 3-10: IRI-Tracked Dollar Sales of Refrigerated RTD Coffee, 2009 (in millions of dollars)
Cool Brew Lifts Refrigerated Coffee Concentrate Segment
Sales by Channel
Foodservice Sales Gain in Restaurants
Table 3-11: Share of U.S. Foodservice Dollar Sales of Coffee: By Venue, 2008-2009 (percent)
Supermarkets Lose Share to Cheaper Alternatives
Table 3-12: Share of U.S. Retail Dollar Sales of Coffee: By Channel, 2008-2009 (percent)
Seasonality and Regionality
Retail Sales Highly Seasonal
HealthSaver Caffeinated Cities Survey Details Trends by Region
Table 3-13a: U.S. Cities with Highest Levels of Coffee Consumption: Regular Coffee & Specialty Coffee Drinks, 2007 vs. 2008
Table 3-13b: U.S. Cities with Lowest Levels of Coffee Consumption: Regular Coffee & Specialty Coffee Drinks, 2007 vs. 2008
Table 3-13c: “Most Caffeinated U.S. Cities”: 2007 vs. 2008
Table 3-13d: “Least Caffeinated U.S. Cities”: 2007 vs. 2008
Table 3-13e: U.S. Cities Most Likely to Say Caffeine Is Good for You: 2007 vs. 2008
Table 3-13f: U.S. Cities Most Likely to Say Caffeine Is Bad for You: 2007 vs. 2008
Northwest Coffee Culture Hides Specialty Coffee’s East Coast Roots
Market Outlook
The Economy and Its Impact
A Shift to Gourmet/Specialty Coffee
More Than Half of Americans Drink Coffee Daily
Competition from a Broad Spectrum of Beverages
Table 3-14: IRI-Tracked Sales and Share of Major Beverage Categories, 2009 vs. Year Ago (in millions of dollars)
RTD Tea Beats Out RTD Coffee on Price
Table 3-15: IRI-Tracked Dollar Sales of RTD Coffee vs. RTD Tea, 2009 vs. Year Ago (in millions of dollars)
New Spins on Caffeine
New Research Supports Coffee’s Health Halo
Single-Serve Systems Are Here to Stay
Coffee Pricing Is Volatile
Raw Coffee Prices Shrink in 2009
Table 3-16: Composite Green Coffee Prices, 2005-2008 (in cents per pound)
Looking Ahead: Projected Market Growth
Economy Slowly Improving
Focus on Environmental and Social Responsibility Will Endure
Coffee as the New Health Food
Hispanic Coffee Sales to Grow
Table 3-17: Projected Hispanic Population as Percent of Total U.S. Population: 2000, 2007, 2010 and 2015
Coffee Sales Fortunes to Improve Through 2014
Table 3-18: Projected Total U.S. Sales of Coffee, 2009-2014 (in millions of dollars)
Foodservice Sales to Near $52 Billion
Table 3-19: Projected U.S. Sales of Coffee Through Foodservice Channels, 2009-2014 (in millions of dollars)
Steady Growth in Retail Sales
Table 3-20: Projected U.S. Sales of Coffee Through Retail Channels, 2009-2014 (in millions of dollars)
CHAPTER 4: THE MARKETERS
Competitive Overview
A Complex Marketing Structure
Thousands of Marketers
Marketers Employ Multiple Sales Channels
Major Coffee Marketers
Foodservice Cross-Over
Specialty Coffee Marketers
Hispanic-Style Coffee Marketers
Joint Ventures Provide Synergies
The North American Coffee Partnership
Coca-Cola, Godiva, Caribou and More
Competitive Positioning
Marketer and Brand Shares
Methodology
Smucker Is No. 1 Coffee Marketer
Table 4-1: Top 10 Coffee Marketers by IRI-Tracked Sales and Market Share, 2009 (in millions of dollars)
Smucker and Kraft Dominate Mammoth Ground Coffee Segment
No Other Marketers Claim Double-Digit Share
Smaller Marketers Make Impressive Gains
Smucker Leads Ground Decaf Segment
Nestlé Tops $420 Million Instant Coffee Segment
Kraft and Smucker Lead Instant Decaf Segment
Eight O’Clock Moves Up in Whole Beans Segment
North American Coffee Partnership Owns RTD Coffee Segment
Wm. Bolthouse Reigns in Refrigerated RTD Segment
Cool Brew Dominates Tiny Refrigerated Coffee Concentrate Segment
Top 10 Brands in Natural Supermarket Channel
Table 4-2: Leading Ground Coffee Marketers and Brands: By IRI-Tracked Sales and Share, 2009 (in millions of dollars)
Table 4-3: Leading Ground Decaffeinated Coffee Marketers and Brands: By IRI-Tracked Sales and Share, 2009 (in millions of dollars)
Table 4-4: Leading Instant Coffee Marketers and Brands: By IRI-Tracked Sales and Share, 2009 (in millions of dollars)
Table 4-5: Leading Instant Decaf Coffee Marketers and Brands: By IRI-Tracked Sales and Share, 2009 (in millions of dollars)
Table 4-6: Leading Whole Beans Coffee Marketers and Brands: By IRI-Tracked Sales and Share, 2009 (in millions of dollars)
Table 4-7: Leading Shelf-Stable RTD Coffee Marketers and Brands: By IRI-Tracked Sales and Share, 2009 (in millions of dollars)
Table 4-8: Leading Refrigerated RTD Coffee Marketers and Brands: By IRI-Tracked Sales and Share, 2009 (in millions of dollars)
Table 4-9: Leading Refrigerated Coffee Concentrate Marketers and Brands: By IRI-Tracked Sales and Share, 2009 (in dollars)
Table 4-10: Top 10 Brands of Ground Coffee in Natural Supermarket Channel: Market Share and Dollar Sales, 52 Weeks Ending January 23, 2010 vs. Year Ago (in millions of dollars)
CHAPTER 5: MARKETING & NEW PRODUCT TRENDS
Upscale Coffee Trends Collide with Downscale Economy
Figure 5-1: Number of Coffee Beverage Introductions, 2005-2009
Figure 5-2: U.S. Gross Domestic Product, 2005-2009 (in dollars)
Table 5-1: Number of Coffee Beverage Introductions by Package Tags/Claims, 2005-2009
Will Economic Turnaround Trigger New Product Turnaround?
Table 5-2: Number of Coffee Beverage Introductions, 2008 vs. 2009
Thrifty Upscale Coffee: Can It Work Outside Foodservice?
Ideological Coffee: Organic, Natural and Fair Trade
Whole Foods vs. Its Customers: Nobody Wins
Certification Labeling: Baffling for Consumers and Marketers Alike
Starbucks C.A.F.E.: Not Where You Go for a Cup of Joe
Figure 5-3: C.A.F.E Scorecard Excerpt
Ethical Direct Trade
UTZ Certified Good Inside: Is It Good Enough for True Believers?
Shade Grown Coffee
Three Strikes and You’re In—Triple Certification
Table 5-3: Caffe Ibis Coffee—Triple Certification Labels
“Green” Labels, Labels, Everywhere
Table 5-4: Organic, Shade Grown (aka Bird Friendly), and Fair Trade Labels
Products Launches May Include Myriad Products
Green Mountain Coffee Entries Includes Donut House Collection
The Four Runners Up
2009 Whole Bean and Ground Coffee Intros Exhibit Variety and Growing Sophistication
Single-Origin Coffees
Limited Editions
New Bottled Drinks Pose Question: Is Coffee the New Chocolate?
Coffee-Energy Drink Connection Continues in 2009
Java Has Been a Monster
Coca-Cola Goes Full Throttle into Hybrid Coffee/Energy Drinks
7-Eleven’s Fusion Energy Coffee Launches Foodservice Trend
Table 5-5: Coffee Beverages Introduced in 2009
CHAPTER 6: FOODSERVICE AND RETAIL TREND OVERVIEW
Introduction
Increasing Overlap and Cross-Competition Between Foodservice and Retail
Foodservice Overview
Foodservice Venues
Foodservice Distribution Methods
Away from Home Food Spending Remains Static
Full-Service Restaurant Share of Sales Surges
Table 6-1: Average U.S. Household Expenditures on Food, 2004-2008 (in millions of dollars)
Table 6-2a: Dollar Sales of Meals and Snacks Away from Home: By Type of Outlet, 2004-2008 (in millions of dollars)
Table 6-2b: Dollar Sales of Meals and Snacks Away from Home: By Type of Outlet, 2004-2008 (in millions of dollars)
Table 6-3a: Share of Dollar Sales of Meals and Snacks Away from Home: By Type of Outlet, 2004-2008 (percent)
Table 6-3b: Share of Dollar Sales of Meals and Snacks Away from Home: By Type of Outlet, 2004-2008 (percent)
Restaurant Industry Trade Group Projects Growth in 2010
Table 6-4: Restaurant Industry Sales: 2008-2010 (in billions of dollars)
Despite Chain Restaurant Proliferation, Mom and Pops Remain Industry Paradigm
Organic Coffee “Hot” in 2010 Restaurant Survey
Specialty Coffee Competition Intensifies and Diversifies
Burger King to Roll Out Seattle’s Best in 2010 as Part of Revamped Breakfast Program
Different Demographics?
Coffeehouses, Kiosks and Coffee Carts
Company Snapshot: Tim Hortons
Drive-Thrus: Competitive Advantage or Retrograde Concept?
The Gasoline Factor
Coffee Is Best-Selling Hot Beverage at Convenience Stores
Coffee Tops C-Store Shopper Lists
7-Eleven Achieves Franchise-Only Status in U.S. While Playing Up Coffee
“Looking Good In Any Cup Size” Ad Campaign Introduces New Iced Coffee Line
New Coffee Is Old News at 7-Eleven
7-Eleven Announces NYC Expansion Plans
Sheetz Specialty Coffee Drinks Include Lattes, Cappuccinos and Mochas
ExxonMobil Combines Upscale Coffee Image with Relaxed Approach
Hess/Dunkin’ Donuts Rollout Continues
Walgreen Tests Café W
Licensed Cafés and Kiosks
Books Go Better with Cafés
Mountain Mudd Franchises Spread from Billings to Lebanon
Less Workers = Less Office Coffee Service
Vending Machines Lagging in U.S., Picking Up in Britain
The Starbucks Vending Machine Experience
For Hotels, It’s “Goodbye Freeze-Dried, Hello Espresso”
Airlines Flying High with Coffee Grounds
Retail Trend Overview
Retail Distribution Methods
Types of Retail Outlets
Supermarkets Lead Retail Market for Packaged Coffee
Mass Merchandisers, Supercenters & Warehouse Clubs
Walmart a Top Coffee Seller
Fair Trade Coffee Boosts Walmart’s Image, Sales
Contest for National Warehouse Club Supremacy
Gourmet/Specialty Food Stores
Light Roast Coffee
Medium Roast Coffee
Dark Roast Coffee
Specialty Coffee Stores
Company Snapshot: The Coffee Bean & Tea Leaf
Health and Natural Food Stores
Top Coffee Brands in Natural/Specialty Arena
Table 6-5: Top UNFI Brands in Natural/Specialty Channels: by Share and Number of SKUs, 2008 vs.2009 (percent and number)
Internet, Mail Order, and Subscriptions
CHAPTER 7: COMPETITOR PROFILES
Competitor Profile: Caribou Coffee Co., Inc.
Company Overview
Rebuilding and Rebranding Post Recession
Commercial Expansion Shows Results
Caribou Coffeehouses’ Rustic Design Reinforces Brand Identity
We’re #2, We Try Harder
Reinventing the Hot Chocolate Wheel
Reaching Out to Consumers on a Number of Fronts
Competitor Profile: Dunkin’ Brands, Inc
Company Overview
“We Are Mainstream America”
“You Kin’ Do It” Campaign Cheers on “Everyday People”
Dunkin’ Pushes Forward with Expansion Plans
Various Types of New Outlets Targeted
Franchisees Unhappy with Increased Retail Competition
Competitor Profile: Green Mountain Coffee Roasters, Inc
Company Overview
Specialty Coffee Unit Growing Rapidly
Keurig Unit Growing Even More Rapidly
Green Mountain’s CAGR Has Risen to 53% Since Keurig Acquisition
Green Mountain Acquires Tulley’s for $40.3 Million
Green Mountain Acquires Timothy and Revises Projections Up Once More
Balanced, Multichannel Distribution
How Keurig Grows Sales
Social Responsibility: Putting Your Money Where Your Mouth Is
Company Continues Ethical/Fair Trade Marketing
Competitor Profile: Kraft Foods, Inc
Company Overview
Table 7-1: Kraft, Inc. Net Revenues: By Region and Category, 2008 (in billions of dollars)
Kraft Acquires Cadbury
The Maxwell House Roller Coaster
Lawsuit with P&G Settled
Brewing Some Good Marketing
Yuban Is Revitalized
Sanka Suffers from Image Problem
General Foods International Coffee Mixes Losing Their Luster
Starbucks Agreement Has Had Long-Term Benefits
Gevalia Kaffe Gets New U.S. Push
Kraft’s Tassimo Home Brewing System Succeeds in Europe But Stumbles in the U.S.
Kraft Switches to Bosch
Kraft Settles Lawsuit with Keurig
Tassimo Looking to Bring Its European Mojo to the U.S
Advertising “Webisodes” Fall Flat
Tassimo Has Potential
Competitor Profile: McDonald’s Corp.
Company Overview
McCafé: An Idea Whose Time Has Come
Concept Traces Back to Premium Roast Coffee Upgrade
Adding Coffee Bars
Advertising Approaches: Special, But Unsnobby
McCafés a Global Success Story
McDonald’s Japan Shoots for No. 1 in Espresso Drinks
Competitor Profile: Massimo Zanetti Beverage USA, Inc.
Company Overview
The Third Largest Roaster in the U.S
Chock Full O’Nuts: “A Heavenly Coffee”—Literally
Hills Bros. Popular with Heavy Coffee Drinkers
MJB Premium Coffee in the Pacific Northwest
Chase & Sanborn Offers Affordable Price
Cafés and Foodservice
Competitor Profile: Nestlé USA, Inc.
Company Overview
Nestlé’s U.S. Operations: Vast and Varied
Joint Ventures with Jamba Juice & Coke
Nestlé Leads Instant Coffee Market
Nespresso’s Speedy Nespresso Brings Delayed Financial Gratification
Worldwide Nespresso Gains 28% in Third Quarter of 2009
Nescafé Rolls Out Dolce Gusto
Competitor Profile: Peet’s Coffee & Tea, Inc.
Company Overview
Sales Grow Despite Recession
Two Business Segments: Retail Stores and Specialty Sales
Peet’s Pulls in Sails Against Headwind of Economy
Peet’s Mantra: “It’s All About the Coffee”
Peet’s Retail Stores Are Marching Eastward
Peet’s 10 Commandments
Now a National Brand in Grocery Channels
Partnership with Vistar Should Increase Office Sales
Two Types of Foodservice Accounts
Bidding War for Diedrich
Competitor Profile: Sara Lee Corp.
Company Overview
Sales Results
Sara Lee Sheds U.S. Retail Coffee and DSD Foodservice Coffee Businesses
DSD Sale Does Not Mean Capitulation in Foodservice Competition
Despite Divestitures, Sara Lee Still Brewing Up a Storm
Senseo a Global Single-Serve Brand
U.S. Customers Wait for Senseo to Return
Competitor Profile: The J.M. Smucker Co.
Company Overview
Smucker Acquires Coffee Brands from P&G
A Focus on Breakfast and Tradition
A Family Business with a Thirst for No. 1 Brands
Folgers Coffee Sales Perk Up Under Smucker
Pricing Key to Success
Competitor Profile: Starbucks Corp
Starbucks to World: “Accounts of My Demise Are Somewhat Exaggerated”
Table 7-2: Starbucks Results of Operations for Fiscal Years 2005-2009 (in millions of dollars)
Return of Prodigal CEO Reignites Company
Past Is Prologue as Starbucks Reevaluates and Regroups
Schultz Shutters Hundreds of Stores
Starbucks Takes Time Out to Retrain Baristas
The Vast Worldwide Starbucks Coffeehouse Phenomenon
Starbucks “Individualizes” New Outlets
Starbucks Testing 31-Oz. Trenta Iced Drinks
Other Strategic Initiatives
Fresh Appeal
New Machines
Pike Place Roast
Clover Upscale Brewed
Customer Loyalty Program
My Starbucks Idea Webpage
Table 7-3: “My Starbucks Ideas” by Type and Number as of December 8, 2009
Prior to Recession, Starbucks Expanded Drive-Thrus
Starbucks and Ad Agency Part Ways
Starbucks iPhone Apps
Despite Store Cutbacks, Starbucks Retains Brand Portfolio
Seattle’s Best Coffee & Torrefazione Italia
Seattle’s Best Goes Franchise Route
Foodservice Operations Suffer Setback During Inhospitable Times
Burger King to Roll Out Seattle’s Best Nationally
Profitable Partnerships in Consumer Packaged Goods
Kraft Markets Starbucks’ Ground and Whole Bean Coffee
The North American Coffee Partnership
Via Rollout Ongoing
Transformation Agenda Fuels Energy Drinks
Nutritional Health & Wellness to Promote Corporate Health & Wellness
Social Responsibility as Practice and Marketing Tool
Employees vs. Starbucks: You Win Some, You Lose Some
Tazo Tea & Ethos Water
Table 7-4: Tazo Tea—List of Hot Tea Products as of December 2009
Ethos Water: PR Plus or Ethical Dilemma?
Other Partnerships, Other Products
CHAPTER 8: THE CONSUMER
More than 50% of Americans Drink Coffee Daily
77% of Adults Drink Coffee Each Year
Consumer Love Affair with Gourmet Coffee Wanes a Bit
Consumption Among 18- to 24-Year-Olds Rebounds Slightly
Coffee Drinkers Know Home Isn’t Just Where the Heart Is
Brewing Method of Choice
Figure 8-1: How Consumers Get Their Morning Java Jolt, 2010 (percent)
Consumer Use and Demographics
The Simmons Survey System
Starbucks Restaurants Feel Recession Squeeze
Table 8-1a: Usage Rates for Starbucks Restaurants and Starbucks Packaged Coffee Products, 2006-2009 (percent of U.S. adults)
Table 8-1b: Adult Consumer Base for Starbucks Restaurants and Starbucks Packaged Coffee Products, 2006-2009 (number of U.S. adults in millions)
Table 8-2a: Fast-Food Breakfast Consumers: Usage Rates Overall and for McDonald’s, Starbucks and Dunkin’ Donuts, 2005-2009 (percent of U.S. adults)
Table 8-2b: Fast-Food Breakfast Consumers: Consumer Base Overall and for McDonald’s, Starbucks and Dunkin’ Donuts, 2005-2009 (number of U.S. adults in millions)
Usage of Coffee by Type
Figure 8-2: Household Usage Rates of Coffee: By Product Type, 2009 (percent of U.S. households)
Espresso/Cappuccino Has Youthful Demographic
Table 8-3a: Usage of Espresso/Cappuccino: By Household Age Group, 2009 (number in thousands, percent and index)
Table 8-3b: Usage of Ground/Whole Bean Coffee: By Household Age Group, 2009 (number in thousands, percent and index)
Types of Coffee Used Most
Figure 8-3: Coffee Usage Rates: By Product Type Most Often Used Per Household, 2009 (percent of U.S. Households)
Five-Year Trend by Types of Coffee Used
Table 8-4: Trended Number of Coffee Users: By Product Type Used Most Often, 2005-2009 (percent of U.S. households)
Demographic Indicators by Product Type
Regular
Ground Decaf
RTD Coffee Drinks
Instant Decaffeinated
Instant Specialty Flavored Coffee Mix
Whole Bean Coffee
Espresso/Cappuccino
Psychographics Reveal Unlikely Connection Between Flavored Mix & Whole Bean
Brands Usage Rates
Demographic Trends: Ground and Whole Bean Coffee Brands
Café Bustelo
Chock Full O’Nuts
Eight O’Clock
Folgers
Hills Brothers
Maxwell House
Yuban
Demographic Trends: Selected Espresso/Cappuccino Brands
Demographic Trends: Instant Coffee Brands
Demographic Trends: Instant Specialty Coffee Mix Brands
Demographic Trends: RTD Coffee Brands
Table 8-5: Top Demographic Indicators for Selected Types of Coffee 2009 (index of U.S. households)
Table 8-6a: Coffee Purchaser Food and Shopping Lifestyle Attitudes: By Selected Coffee Types, 2009 (index of U.S. households)
Table 8-6b: Coffee Purchaser Food and Shopping Lifestyle Attitudes: By Selected Coffee Types, 2009 (index of U.S. households)
Table 8-6c: Coffee Purchaser Food and Shopping Lifestyle Attitudes: By Selected Coffee Types, 2009 (index of U.S. households)
Table 8-7: Coffee Brands Used Most Often by Percentage of U.S Households, 2009 (percent of U.S. households)
Table 8-8: Top 10 Demographic Indicators for Selected Ground/Whole Bean Coffee Brands, 2009 (index of U.S. households)
Table 8-9: Top Demographic Indicators for Selected Espresso/Cappuccino Brands, 2009 (index of U.S. households)
Table 8-10: Top Demographic Indicators for Selected Instant Coffee Brands, 2009 (index of U.S. households)
Table 8-11: Top Demographic Indicators for Selected Instant Specialty Coffee Mix Brands, 2009 (index of U.S. households)
Table 8-12: Top 10 Demographic Indicators for Selected Ready-To-Drink (RTD) Coffee Brands, 2009 (index of U.S. households)
APPENDIX: Addresses of Selected Industry Associations, Marketers and Coffeehouse Chains
