|Foodservice operators have done an excellent job of positioning coffee as an afternoon indulgence that’s a key part of a break. In some respect it’s ironic that having a coffee in the morning is about speeding up, and in the afternoon it’s about slowing down.|
Full service dining
The growth in coffee consumption away from home has been fueled exclusively by QSRs while full service restaurants (FSRs) have seen servings decline servings at 17 per cent between 2008 and 2012. One of the challenges for FSRs is that they’re underrepresented among young coffee drinkers.
Eighteen- to 24-year-olds are the fastest growing segment of coffee drinkers at foodservice with servings growing 28 per cent between 2008 and 2012. This group represents nine per cent of coffee servings at QSR versus three per cent at FSR. Although coffee is an on-the-go option, which lends itself to QSR, this segment has also dedicated substantial resources to coffee programs contributing to their growth in the category.
Though FSRs may not be in a position to dedicate a similar level of resources to their coffee programs, providing innovative options can be a point of differentiation on the menu to attract younger consumers to whom specialty coffee has greater appeal.
The growth in coffee consumption at foodservice has not gone unnoticed by companies with a vested interest in in-home coffee consumption. The introduction of single-serve coffee makers, where consumers use pods to make coffee, has experienced dramatic growth. About one third of coffee drinkers say that they have a single-serve device in their home, and the majority of these owners indicate that they’ve had it for less than two years. NPD data also show that of any small domestic appliance, single-serve coffee makers have shown the highest rate of unit growth over the past two years.
While coffee drinkers point to spending less as the top reason for drinking more coffee at home, a significant number point to having a new device at home as the reason they’re switching. This represents a challenge for foodservice operators as single-serve coffee makers encroach upon the areas where foodservice excels: variety and ease. Unlike the standard automatic drip coffee makers, single-serve options provide consumers with the ease and flexibility to make specialty coffees, which is typically foodservice’s strength.
While it’s difficult to forecast what the next move will be in the coffee war, what can be identified is what motivates coffee drinkers to use foodservice over making coffee at home. Coffee drinkers cite convenience as the number one reason for drinking coffee more often outside of the home. Having a new location in the area where one lives and works, and new beverage and snack food options are also among the top reasons that coffee drinkers cite for getting their coffee at foodservice.
In addition to convenience, foodservice operators should remember that variety of coffee selection and accompaniments serve as important differentiators between in and out-of-home occasions. One only needs to look at the newest menu offerings of the major foodservice chains with developed coffee programs to substantiate this point.
Canadians’ love for coffee means that foodservice operators, coffee manufacturers and coffee appliance makers will continue to battle it out. Innovation has been a key strategy in this battle and the ultimate winner has been the consumer, who enjoys more variety in coffee than ever before.
About the author
Barbara Smyth is Director, Client Development (Foodservice) for The NPD Group. The NPD Group has more than 25 years of experience providing reliable and comprehensive consumer-based market information to leaders in the foodservice industry. For more information, visit www.npd.com or contact Smyth at firstname.lastname@example.org.