Coffee Fest: A Review of the North American Market and Key Hot Drinks Trends

Coffee Fest: A Review of the North American Market and Key Hot Drinks Trends

Coffee Fest: A Review of the North American Market and Key Hot Drinks Trends

The Coffee Fest trade show took place on Navy Pier in Chicago from June 5 to June 7, hosting a wide range of players in the coffee and hot drinks industry, including coffee shop owners, baristas, roasters, distributors, manufacturers and more. Here, Euromonitor International’s drinks research analysts Mark Strobel and Eric Penicka presented on ‘The State of the North American Coffee Market’. Below are some key points from the presentation as well as other notable trends from Coffee Fest.

Euromonitor’s Presentation on the State of the North American Coffee Market

CoffeeFest

Globally, retail coffee is a US$85 billion dollar industry and North America is among the largest and fastest growing of all regions worldwide. In the US, coffee pods have dominated conversations as its value share of the market has grown from nearly negligible a decade ago, to a US$4 billion industry in 2014. However, their growth spurred on by the Great Recession is expected to taper off in the next five years. Pod’s stalling growth will in part be a result of increased consumer appreciation of coffee in the US, where third-wave, independent coffee shops have gained ground. Furthermore, specialty coffee shop growth can largely be attributed to the millennial age group which has changed consumer trends across industries and will only grow in importance in the years to come as their purchasing power advances.

As for Canada, it is truly a unique country and should not be considered an extension of the United States. Canada has a more strongly developed hot drinks culture and is a more mature and competitive coffee market than the US. Despite this, growth in both coffee volume and value has been even stronger than in the US, partially due to a greater uptake of coffee pods. While these products are reaching maturity, opportunities still do exist, but differentiation is highly important both for the retail and foodservice aspects of the market.

Mexico is a very large growth opportunity with low but fast growing coffee consumption. While, specialist coffee shops are increasingly popular and are fostering greater interested in premium coffee, the majority of consumers seek value, which is part of the reason why low priced instant coffee continues to dominate the market. Moving forward, as the appreciation for coffee expands to all socio-economic levels, finding the middle ground between affordability and quality will be a key opportunity.

Key trends from Coffee Fest

There were several interesting products and concepts at Chicago’s Coffee Fest, both new and old. One such example is cold brew coffee from companies like Stumptown Coffee and Dark Matter Coffee are an undeniable growing trend in coffee and one which promises to challenge energy drinks for their higher than average caffeine content, natural makeup, and near absence of calories. Warm US climates are certain to be areas of opportunity for cold brew coffee as coffee lovers look for an alternative to their daily cup of joe. Pod development was also notable, with manufacturers looking to improve coffee pod sustainability. iFill Cup showcased their recyclable hard coffee pods, which can be purchased by coffee roasters to easily package themselves. Biodegradable Food Service, LLC (Earth-to-Go) has created a fully compostable and biodegradable coffee pod.

Despite the name of the show, there was equal excitement about tea as there was for coffee. The consensus among show participants is that consumers are becoming increasingly interested in and knowledgeable about tea. In fact, some mentioned that tea is going through a similar revolution that coffee has recently experienced. As a result, providers are offering increasingly high quality teas that appeal to a more sophisticated consumer. For example, World Flavorz offers a wide variety of unique tea blends and Zen Tea Trader prides itself on the freshness of its products. These companies aim to covert tea from a staple beverage to truly sensational experience. This trend in high quality craft teas as seen at Coffee Fest shows no sign of slowing in the near future.

You must be logged in to post a comment Login