By Samantha Biljan
If breakfast is the most important meal of the day, does that mean a.m. staples like coffee and tea are the most important beverages of the day? If our research proves right, the answer is yes. Because when it comes to beverages and caffeinated habits, nearly half of consumers are drinking brewed coffee on a regular basis, trailing only tap water in incidence and remaining consistent over the past five years according to Datassential’s BUZZ 2019 Report. However, what consumers put in their morning brew has been moving for some time. Flavoured creamers and regular sugar are by far the most favoured, but consumers are reaching for more alternative milk and sweetener options as items continue to expand and call out health and wellness claims.
Using Datassential’s BUZZ 2019 Report, as well as MenuTrends, which tracks more than 500 Canadian menus and nearly 5,000 U.S. operators, we’re taking a look at what’s happening in the coffee space, including the latest trends with taste, origins and craft, as well as what types of milk and sugar consumers are reaching for when adding to their brewed coffee or tea.
Trending coffee tastes and origins
Morning coffee has become a key part of consumers’ daily routines, providing a necessary (some might say, required) power boost throughout the day. Gone are the days, however, when just about anything would do. When it comes to roast type, consumers are discerning of both taste and country of origin. Perhaps surprisingly, unflavoured coffee beans are not only the most common, but also the most appealing to consumers. What’s more, interest in coffee from African and Latin American countries like Kenya, Ethiopia, Mexico, Nicaragua and Costa Rica is growing. Medium and dark roasts are the most appealing (with medium resulting in a more acidic taste, and the latter imparting a toasted, slightly burnt flavor), while Colombia is the most-desired brewed coffee site. Take note, operators: you may want to consider dark roast innovation and calling out Colombian coffee origins where possible.
Attributes like customization options and claims (fair trade, sustainable, etc.) are also appealing, but they don’t improve the perception of coffee unless it’s also fresh and has good flavour. One Toronto-based coffee shop and roastery that hits the mark is De Mello Palheta Coffee Roasters, which has an origin-based roasting approach and aims to purchase from a broad array of regions at a basic minimum price that’s at least 20 per cent above local levels or Fair Trade Organization prices. The result is an ethical, artisanally-crafted cup of joe.
The craft (coffee) of the matter
According to our BUZZ report, most U.S. coffee drinkers are not clear about what “craft coffee” means, and many associate ubiquitous name brands with craft, including Dunkin’, Starbucks and Folgers. This means educating consumers by distinguishing roasts would be beneficial for operators — consider calling out artisanal craftsmanship processes such as small batching, single-estate/selection criteria, and creating background stories that emphasize their specialty nature. Of those consumers who are aware of craft coffee, they associate it with great taste, uniqueness and high quality, and 44 per cent are very or extremely interested. Trendiness itself is less of a factor for those who know about and drink craft coffee: interest is expected to carry over and translate into more purchases in the coming years, and operators can assume those that know of craft coffee are coming back for more.
The colder side of coffee
A best-enjoyed-cold darling of third wave coffee shops is nitro coffee, the über-premium product infusing cold brew coffee with nitrogen gas. Since being introduced to Starbucks in 2016, nitro coffee has seen rocketing growth (increasing over 2,000 per cent over four years, according to Datassential’s U.S. MenuTrends database). Still, most consumers cannot identify what makes it different from other coffees, and some education may be necessary for the beverage to have the same menu presence as iced coffee or cold brew.
It seems that the colder side of coffee is here to stay. The introduction of cold brew to Canadian Starbucks’ menu way back in 2015 was met with a strong response, fueling over 65 per cent of cold coffee growth at launch time as reported by Starbucks Stories and News. The beverage has yet to stop growing, too, having increased 118 per cent over the past year across Canadian menus according to Datassential’s MenuTrends. Cold brew is particularly appealing to younger consumers, mainly Gen Z and Millennials, however, operators should take note that 46 per cent of consumers who haven’t had it before would be willing to try according to BUZZ 2019. Now, the coffee giant has stepped up its chilly game with the inclusion of various cold foams, which are strikingly similar to the burgeoning trend of cheese teas (tea with a savory-sweet foam crown top) that have popped up across North America after boba tea shops in Asia first popularized them a few years prior.
Cream of the crop
While coffee aficionados may continue to insist that black is the best way to taste the origin of the bean, most consumers are not willing to forgo a little something extra to tame its acidic bite. Flavoured liquid creamer provides an opportunity to whiten, sweeten and flavour coffee in one easy step. Traditional flavours like vanilla and French vanilla, hazelnut and caramel are leading creamer choices, offering an easy innovation area for operators. When it comes to using unique animal-derived milks (such as yak or goat milk) as a creamer, consumers are unfamiliar with most and find the concept generally unappealing. For now, at least, operators should avoid menuing a golden goat milk latte.
Non-dairy alternative creamers and milks are continuing to undergo a prolonged renaissance, supported by operators crafting beverages around them, enabling diet-conscious and socially-driven consumers to partake. In Canada alone, people consume about 20 per cent less dairy milk than they did a decade ago, according to CBC News. Health is the primary reason consumers use plant-based milk in their beverages, and as awareness continues to grow, consumers are expecting to find it when dining out and shopping for groceries. Of the most mainstream plant-based creamers, almond milk is the most used, while almond, soy, and coconut milk are the most well-known creamers among the general population. Similar to dairy-based flavored creamers, consumers also gravitate to vanilla, hazelnut and caramel flavours.
Oat milk mimics fat-rich dairy with its thicker consistency and ability to hold foam well, and CBC News reports that it has experienced some major sales growth in Canada at over 250 per cent. Another newcomer (well, new to this side of the pond) making waves in the alternative milk category is tiger nut milk, made from a tuber native to Spain and northern Africa that’s hydrated and ground up. Traditionally in Spain, the milk is used for a cooling beverage called horchata de chufa, consisting of tiger nut milk, cinnamon and a dash of sugar. Now that the health world has caught wind of the lactose-free, nutrient-rich, prebiotic milk’s existence, it’s starting to make its way into the mainstream with cold brew horchata mashups that capitalize on its subtle nutty flavour. For the lactose-intolerant but not nut-averse, cashew milk is a more premium alternative offered among operators that craft specific lattes to pair with its creamy notes. Take, for instance, health-forward Toronto chain Revitasize, which serves ready-to-drink Coffee Cashew made with activated cashews, cold brew, cacao, and maple syrup at various locations and through a subscription plan.
The leading coffee sweetener type is regular sugar, but usage has been declining on Canadian menus (-15 per cent over the past year). Natural alternatives, such as stevia, are growing and, along with other flavoured additives, are likely replacing regular sugar for some. Recent health trends that encourage cutting out refined sugars completely and switching to ones that are more readily processed by the body have contributed to some more obscure sweeteners popping up across specialty coffee and tea menus. These shifts in coffee sweetener preferences follow the efforts of many consumers to make choices that are perceived to be healthier and more natural, though ultimately taste still matters. Operators that can offer more natural sweeteners and keep well-liked specialty drinks slightly less sweet may find a new customer in this healthier set.
Tea with a (healthy) purpose
While coffee is still favoured by consumers, tea is making some headway in the artisanal wellness space. There is widespread interest in tea with health and functional benefits, with a majority of tea drinkers willing to pay more for at least one added claim, according to BUZZ 2019. Immune system health, all-natural and calming/relaxing benefits are of the highest interest. Tea drinkers are most likely to pay for benefits that have a direct impact on their physical and mental health, whether it’s a boosted immune system of a better sleep. Traditional types of tea (hot and fresh brewed iced tea) are where consumers are most comfortable and willing to pay for additional functional health benefits. On the flip side, claims around allergies and dietary restrictions like gluten-free, dairy-free and kosher-certified have low interest compared to other claims, and few are willing to pay more for tea that makes these claims.
Similar to coffee, operators steeping specialty crafted teas would do well to communicate the regions where the leaves were grown and any particularly unique processing styles that produce certain flavour profiles (hand-rolled oolong, shaded, fermented, etc.). One example comes from Canadian chain Serious Coffee, which menus a stone-ground London fog latte, taking care to describe the artisanal process, natural sourcing and flavour profile of the drink on its menu. Less than half of tea drinkers have tried innovative tea beverages, proving that specialty tea — or specialtea, shall we say — may be an untapped market for operators to expand on.
Coffee and tea: the main takeaways
Coffee and tea aren’t going anywhere. They’re morning staples and afternoon pick-me-ups, and millions of adults regularly consume both. But consumers have an eye for particular roasts and regions along with expanding palates (medium roast, from Columbia, and so on). Craft-intensive cold coffees like cold brew and nitro are still gaining traction, and likely to continue growing among consumers. What’s more, though consumers prefer standard adds such as milk, cream and regular sugar, there is a growing market for natural and health-focused alternatives (think metabolically-friendly alternative sugars, like stevia, or lesser-known luo han guo/monkfruit, and nutrient-dense alternative milks such as tiger nut, or rich and creamy macadamia). Operators have a wide playing field when it comes to coffee and tea, and more than enough ingredients to menu specialty drinks that can entice the most traditional coffee lovers to try something new, whether it be a roast from a country they’ve not tried before, or a time-intensive nitro cold brew and macadamia milk mashup.
Samantha Biljan is an analyst on the Product Excellence team at Datassential, the leading supplier of trends, analysis, and concept testing for the food industry.