Offer the Cream of the Crop

Approximately 63 percent of Americans consumed coffee on a daily basis, and 83 percent of Americans drank coffee in general in 2013, states “Coffee Production in the US,” a July industry report from Melbourne, Australia-based IBISWorld that cites data from the National Coffee Association.

But many Americans won’t drink just any coffee. Retailers will likely need to up their coffee “game” — and make investments on the organic side of the category — if they want to grow their share of the private label coffee category.

Trends with traction

When it comes to coffee, consumers increasingly want quality products and are switching from highvolume, low-quality coffee products to gourmet coffee, IBISWorld states. One reason is that the consumer views these high-quality products as an affordable luxury. Some companies, including Nestlé and Starbucks, have tried to capture a consumer base with a preference for high-quality coffee but boasting a low disposable income by offering specialized instant coffees.

Part of the gourmet trend means that consumers are also increasingly interested in organic and fair trade coffees, as well as in understanding how coffees differ from each other based on where the beans are grown, what people are growing them and how they’re processed, says Martin Mayorga, president, Mayorga Organics, Miami. For example, honey milling — drying the coffee bean in the sticky, syrupy substance left over after the coffee cherry fruit is removed — is a relatively new process that is gaining some traction among consumers because it imparts a sweet honey-like flavor to the beans. Geisha coffee — a relatively limited varietal of coffee that is experiencing a resurgence in popularity — also is of high consumer interest.

Trends on the horizon

With America becoming ever more ethnically diverse, coffee products, including organic offerings, that appeal to culture-specific tastes and preferences could become very profitable, IBISWorld states. For example, J.M. Smucker acquired Rowland Coffee to develop a market niche from the growing Hispanic population in the United States.

Another coming trend retailers might want to keep an eye on is the push for non-commercialized agriculture, Mayorga says. Consumers are interested in going back through the supply chain to the farmer. They want to humanize the supply chain so that it’s no longer just about logistics and getting coffee to the consumer as quickly and cheaply as possible, but also about making sure the farmer is treated fairly.

This interest in ethical consumerism has led to the scrutiny of large multinational corporations and has put the pressure on producers of coffee products to be more accountable and transparent in their dealings with farmers and coffee bean harvesters in developing nations, IBISWorld says.

“The ethics of coffee production can seriously affect demand for a particular product or brand and erode the credibility of the manufacturer involved,” it adds.