Specialty Coffee Consumers: Globally, despite its relatively niche market, the demand for specialty coffee is on the rise. The 2023 National Coffee Association’s National Coffee Data Trends report highlights a significant uptick in specialty coffee consumption in the United States. Specifically, 52% of Americans aged 18 and older reported indulging in specialty coffee in the past week, a number that escalates to 62% among those aged 25 to 39. Consequently, the United States witnessed a peak in specialty coffee consumption not seen in over five years.
This surge is accompanied by a noticeable shift in consumer preferences within the specialty coffee market. Although convenience continues to be a priority, there’s a growing appetite for premium quality coffee and innovative drink options, driving swift changes in the industry.
As the coffee sector rebounds from the pandemic’s impact on out-of-home consumption, it’s crucial for businesses to adapt to the evolving tastes and expectations of their clientele.
To delve deeper into these trends, I engaged in discussions with industry experts Vanúsia Nogueira, William “Bill” Murray, and Anne-Marie Roorda. Continue reading to discover their insights.
The rise of specialty coffee consumption globally
The global coffee industry is witnessing a significant surge in consumption, with projections from the International Coffee Organization indicating a growth of 1.7% to 178.5 million 60kg bags in the 2022/23 period.
While the specialty coffee market remains relatively small in comparison to the broader coffee industry, its growth rate outpaces that of commodity-grade coffee, particularly in established markets such as North America, Western Europe, Australia, and East Asia.
Taking the United States as a case study, data from the National Coffee Association in 2022 revealed a milestone in coffee consumption, reaching its highest in two decades. Remarkably, 43% of those surveyed reported enjoying a specialty coffee drink within the previous day—a substantial increase of 20% from January 2021.
Forecasts suggest an even brighter future for specialty coffee, especially in North America, predicting a robust 20% annual growth rate leading up to 2030, potentially positioning it as the fastest-expanding market globally.
In Europe, a significant consumer market for specialty coffee, the presence of numerous specialty coffee shops and roasters contributes to its dominance. Europe holds the largest portion of the global specialty coffee market, approximately 46.2%, with expectations for a 9% growth by 2026.
The Asia-Pacific region is not far behind in terms of growth, with the specialty coffee market anticipated to see an impressive 15.3% yearly expansion from now until 2030, as reported by Research and Markets. Specialty coffee consumers: This indicates a burgeoning global enthusiasm for specialty coffee, signifying a shift in consumer preferences towards more premium, unique coffee experiences.
Expanding specialty coffee consumption in producing aations:
Historically, the specialty coffee market has seen modest consumption levels in its countries of origin compared to the higher demand in consuming nations. Specialty coffee consumers: This trend can be traced back to the global coffee industry’s structure established in the 17th and 18th centuries when European colonial powers began exporting coffee beyond the Bean Belt, making it widely accessible worldwide. Consequently, marketing strategies were predominantly tailored to the tastes of consumers in the Global North.
Nevertheless, the landscape is changing. Specialty coffee consumers: Thanks to a burgeoning middle class and strategic policy initiatives, several coffee-producing countries have witnessed a notable rise in domestic specialty coffee consumption.
In Brazil, the implementation of the Coffee Quality Programme by the Brazilian Coffee Industry Association (ABIC) in 2004 marked a significant turning point.Specialty coffee consumers: Today, an estimated 98% of Brazilian households consume coffee, with the country’s specialty coffee market share experiencing a remarkable surge from 6% to 12% between 2016 and 2018, according to the Specialty Coffee Association. This growth trajectory has likely continued or even accelerated since then.
Similarly, Colombia’s specialty coffee sector has shown impressive growth, with its market valued at approximately US $1.52 billion in 2018. Specialty coffee consumers: The prominence of Colombian and Brazilian baristas as the World Barista Champions in 2021 and 2023, respectively, underscores the growing enthusiasm for specialty coffee within these countries, signaling a potential for further market expansion.
However, this trend is not uniform across all coffee-producing regions. Growth rates in other South American and Central American countries, as well as in African nations, have been more gradual. Despite slower growth, these regions are also experiencing an uptick in domestic coffee consumption, albeit at a steadier rate, suggesting a broadening appreciation for specialty coffee across the globe.
Evolving consumer preferences in the specialty coffee industry
The specialty coffee industry has witnessed considerable transformation over the last decade, with consumer preferences and behaviors undergoing significant changes during this period.
William “Bill” Murray, President and CEO of the National Coffee Association, highlights the pandemic’s profound impact on coffee consumption patterns. Specialty coffee consumers: The pandemic didn’t alter the quantity of coffee consumed by Americans but significantly shifted the settings and methods of consumption.
With approximately 95% of global out-of-home (OOH) coffee venues temporarily shuttering at the pandemic’s peak, a surge in home coffee preparation emerged. Murray notes, “Post-pandemic, there’s been a slight shift, but U.S. coffee consumption has been fairly stable since 2018. Coffee continues to reign as America’s favorite beverage for over two decades.”
Specialty coffee consumers: The resurgence of OOH coffee consumption to pre-pandemic levels in many key markets is primarily fueled by a preference for espresso-based drinks, which are more complex to make at home.
Anne-Marie Roorda, Programme Manager at the Centre for the Promotion of Imports from Developing Countries (CBI), points out a significant trend towards high-quality coffee. Specialty coffee consumers: “In the past five years, there’s been an increasing demand for superior quality coffees. Aspects like direct trade, traceability, and the flavor profile have grown in importance among specialty coffee aficionados.”
Despite the challenges posed by rising food and energy prices and heightened inflation rates, there remains a segment of consumers willing to pay premium prices for coffee that meets their high standards for quality and sustainability. Specialty coffee consumers: This willingness reflects a deepened commitment to ethical consumption practices and a desire for exceptional coffee experiences.
The unwavering appeal of convenient coffee:
Despite the evolving landscape of specialty coffee consumption, convenience continues to be a pivotal factor influencing purchasing decisions. Specialty coffee consumers: What’s notable, however, is the burgeoning demand for high-quality coffee options that do not compromise on convenience.
The rise of coffee capsules and pods exemplifies this trend distinctly. Anne-Marie Roorda notes the significant upsurge in the European market’s appetite for single-serve coffee products, highlighting the burgeoning niche of specialty coffee capsules. Specialty coffee consumers: “Though still emerging, the specialty coffee capsule segment is expanding rapidly,” she observes. “An increasing number of specialty coffee roasters are venturing into producing and marketing their own capsules.”
In tandem with this growth, the industry is also responding to environmental concerns associated with single-serve products. Specialty coffee consumers: A growing number of coffee companies are adopting more sustainable practices, utilizing recyclable, compostable, or biodegradable materials for their capsules and pods. This shift not only caters to the convenience sought by consumers but also aligns with the growing preference for environmentally responsible consumption choices.
Navigating shifts in the specialty coffee landscape
As the specialty coffee sector evolves, quality and convenience continue to dominate the preferences of coffee enthusiasts. Alongside these enduring priorities, several new trends are beginning to shape the future of the industry.
The rise of cold brews and ready-to-drink coffee
The coffee shop menu has never been more varied, especially with the surge in popularity of cold coffee options.
Bill highlights a remarkable shift: “When cold brew was first mentioned in our National Coffee Data Trends Reports a decade ago, it was nearly unknown. Today, it’s the third most preferred coffee preparation method in the US.”
Additionally, ready-to-drink (RTD) coffee has captured the hearts of the younger demographic, contributing to coffee’s transition into an all-day beverage. Specialty coffee consumers: This segment has seen considerable innovation, further enriching its appeal. For instance, La Colombe’s introduction of draft lattes in 2016 revolutionized the RTD landscape. Each can features an “Innovalve” that infuses nitrous oxide into the latte, creating a creamy, nitro coffee-like foam.
The RTD coffee niche continues to expand, with a growing variety of offerings including flavored drinks, beverages infused with functional ingredients, and plant-based options, catering to a wide range of consumer tastes and dietary preferences.
Prioritizing health and sustainability in coffee choices
Vanúsia Nogueira, the Executive Director of the International Coffee Organization, sheds light on the growing trend among consumers to factor health and sustainability into their coffee purchases more than ever.
“Consumer preferences are increasingly influenced by health and nutrition,” she notes. “This shift demands the creation of products that not only offer convenience and quality but are also affordable, functional, and sustainable.”
Consequently, today’s consumers seek coffee options that are not just simple to prepare or ready for immediate consumption; they also expect these offerings to adhere to sustainable practices.
One notable trend in this direction is the rising popularity of plant-based milks in coffee shops, driven by health considerations, ethical concerns, and environmental reasons. Specialty coffee consumers: Highlighting this trend, a 2021 World Coffee Portal survey involving 50,000 UK consumers found that oat milk, having been tried by 16% of respondents in the past year, stands as the most favored plant milk across the nation.
Elevating coffee with precision and education
The appreciation for the artistry and expertise involved in coffee roasting and brewing has sparked a surge in consumer interest in coffee education. Specialty coffee consumers: This growing curiosity underscores a desire among coffee enthusiasts to delve deeper into the origins of their coffee, explore its diverse flavors and aromas, and master the techniques for crafting the perfect cup at home.
Anne-Marie points out the evolving landscape of coffee preparation: “As brewing techniques become more refined, the ‘science’ behind coffee is gaining prominence. Consumers are eager to learn about the unique characteristics of coffee and how these can influence various brewing methods.” This shift towards precision and knowledge reflects a broader trend of consumers seeking a deeper connection with their coffee, aspiring to understand its journey from bean to cup and how to enhance its natural qualities through meticulous preparation.
Anticipating shifts in coffee consumption trends
As the specialty coffee industry continues to evolve with a plethora of emerging trends, predicting changes in consumer behavior over the next decade becomes a fascinating endeavor.
Bill highlights a potential shift towards health-conscious consumption: “The awareness of coffee’s health benefits is on the rise, backed by numerous independent scientific studies. These findings suggest that coffee consumption can indeed have positive health impacts.”
Echoing this sentiment, Anne-Marie points out the growing health and wellness trend among European consumers: “Data from the Institute for Scientific Information on Coffee (ISIC) shows a dramatic 650% increase in global online searches for the health benefits of coffee in 2021 alone. This is a clear indicator of consumers’ heightened concern for the health implications of their dietary choices.”
She further notes the expanding variety of coffee products catering to health-conscious consumers: “The market now offers a wide selection of coffee products free from dairy, added sugars, or enriched with functional ingredients. Additionally, there’s an increasing scrutiny over caffeine’s adverse effects, driving the demand for high-quality decaffeinated coffee in both the US and Western Europe, with consistent growth observed since 2017.”
Continued surge in ready-to-drink coffee market:
Anne-Marie predicts a robust and broadening future for the ready-to-drink (RTD) coffee sector. “Although it occupies a niche, RTD coffee stands as one of the fastest-expanding segments within the European market, with an expected growth rate of 4.8% from 2023 to 2027,” she explains.
Vanúsia emphasizes the imperative for coffee businesses and producers to adapt to this burgeoning demand. “To stay ahead in the market, it’s crucial for coffee stakeholders to align with the key consumer trends of health, convenience, and sustainability,” she states. “Consumers are increasingly prioritizing quality, ease of use, as well as the traceability and transparency of their coffee purchases.”
She also highlights the significant role consumers play in the industry’s future, especially regarding sustainability. “Coffee consumers are a vital link in the value chain and will significantly shape the sustainability practices within the industry moving forward,” Vanúsia adds, underlining the influential power of consumer preferences and demands.
The specialty coffee industry has undergone substantial transformation in recent years, marked by shifts in consumer behavior. As emerging trends continue to surface, they’re poised to play a pivotal role in shaping the sector’s future.
Despite the evolving landscape of consumer preferences, the key to sustained success for coffee businesses lies in their ability to adapt and meet these changing needs.
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