Bleak Coffee

Bleak Coffee

Dollar sales of coffee have been growing in the U.S. for the past five years, but the growth has been driven by inflation. While coffee sales from 2002 through 2007 grew 36% to $6.5 billion, the volume of coffee sold in the U.S. declined 9% for the same period to 60 million pounds, according to Mintel's 2007 Coffee report.

David Morris, a senior research analyst at Mintel, Chicago, said that without price hikes, which have amounted to almost 30% since 2002, “sales trends for coffee would be in serious trouble.”

Although one in five participants said they're drinking more coffee this year than they were last year, 20% of those surveyed also report purchasing coffee from coffeehouses for at-home use.

Indeed, the traditional retail coffee category is “threatened by competition from other sectors, including coffeehouses, specialty food retail stores as well as competition from other beverage segments, such as energy drinks,” said Morris.

And although mainstream supermarkets “have caught on to the trend toward growth in premium and packaged whole-bean coffees, many varieties sold are basically branded coffeehouse-chain coffees like those from Starbucks and Peet's.”

The popularity of single-origin coffees, those that are estate grown, organic and/or Fair Trade Certified, is also increasing.

“People are looking for signatures of quality, and where the coffee actually comes from is one way to signal the higher quality of the product,” noted Tom Verhile, director of Datamonitor's Productscan Online.
— L.P.