In one form or another, chances are almost everyone you know starts their day with coffee – be it home-brewed, bottled, or purchased hot or iced from a coffee shop. As longstanding as its popularity may be, the coffee industry is in the midst of a rapid change.
As millennials’ fast-paced lifestyle becomes ubiquitous, consumers are preferring to get their caffeine on the go. In turn, retailers are experimenting with novel ways to speed up ordering and get busy shoppers back in their stores.
Here are the five coffee industry trends that will dominate 2017:
1. New Generation, New Measure of Value
As of last spring, Millennials have unseated Baby Boomers as the largest living generation, according to U.S. Census data. This younger generation is more social and mobile than any other to date. As a result, coffee consumption has moved from the privacy of consumers’ homes to more public venues, and is then compounded by social media.
With that in mind, millennials have come to value different aspects of their coffee than their parents. Since many older generations drank their coffee in the comfort of their own homes, they focused on the price of the coffee they were drinking. Millennials, on the other hand, are more focused on experience rather than price.
Here’s how to capitalize on this trend:
- Invest in eye-catching packaging and labels people will want to share photos of.
- Showcase your brand’s commitment to sustainability.
- Experiment with new packaging and delivery systems.
- Highlight your leadership team. Consumers might be able to connect with your founding team, and hearing their message straight from the source can be more powerful than reading the words on a label.
2. Ready-to-Drink Coffee Takes Off
It is no secret that we live in a fast-paced world, or that it’s getting even faster. That means that people want to have their coffee ready to drink as soon as possible. In this environment, the canned and bottled ready-to-drink coffee market reached $2.4 billion in 2015 and has only continued to climb, Bloomberg reported.
One reason RTD coffee may be taking off in 2017? The falling popularity of soft drinks in the U.S. and beyond. “It is probably not a coincidence that canned or bottled ready-to-drink cold coffee is catching on at a time when fewer are drinking carbonated soft drinks, including the caffeinated colas,” said Karen Bundy, V.P. of Food & Beverage Marketing at Multi-sponsor Surveys in a press release.
This movement has inspired some of the coffee industry’s biggest players jump in to the RTG arena. In September 2016, Dunkin Brands announced it would be partnering with Coca Cola to bring a new line of cold coffee beverages to retail in 2017.
3. Morning Coffee on Tap
With ready-to-drink coffee making it easier for consumers to get their caffeine fix on the go, some retailers are trying to get coffee drinkers back in the store with nitrogen infused coffee. Nitro coffee is poured from a tap and provides a similar mouthfeel as a beer (think Guinness). The foamy and creamy texture allows brewers to rely less on sugar and milk to cut coffee’s bitter taste, which is appealing to the more health conscious coffee drinker. Plus, the texture is incredibly difficult to replicatein an RTD format, giving coffee shops something to offer millennial consumers looking for unique drinking experiences.
4. Out With Iced Coffee, in With Cold Brew
Iced coffee has long been the go-to for consumers looking for a refreshing pick me up in the summer months or even just an extra kick of caffeine, but this is starting to change. Cold brew coffee has exploded in popularity over the last several years, and 2017 should be no different. Cold brew sales jumped up 580% between 2011 and 2016, according to a Mintel report. While a large part of these sales has been at coffee shops themselves, plenty of retail brands are also adding cold brew products to their lineups.
Here’s what separates cold brew from the more traditional iced coffee: Iced coffee brews just like standard hot coffee – it uses heat to extract flavor, sugar, oils and caffeine from the coffee beans. Then, that coffee is chilled and served over ice. The cold brewing process uses time, rather than heat – soaking beans in water for 12 hours or more in order to turn water into coffee.
5. A Shift Toward Specialty
Overall, as shoppers prioritize experience over price, consumption of gourmet and specialty coffee beverages is on the rise. Out of the $48 billion U.S. retail coffee market, about 55% of spend will go toward specialty coffee next year, the Specialty Coffee Assoc. of America found. Even for brands that have not traditionally operated in the specialty space, opening up a luxury line could pay off in 2017.