Beverage Industry

Survey finds consumers drinking more coffee and tea

August 17, 2011

Despite the specialty coffee craze at limited-service restaurants, regular hot coffee still accounts for the highest level of reported consumption among consumers surveyed by Chicago-based Technomic. Of consumers recently surveyed, 60 percent reported drinking regular hot coffee or tea within the last month, second only to the 62 percent of consumers who had a non-diet carbonated soft drink during the same time period.

Understanding consumer motivations during various dayparts can help improve sales for operators and suppliers, said Joe Pawlak, vice president of Technomic, in a statement.

"Consumers who regularly purchase coffee on their way to work are motivated by the convenience of the location; but significantly, they are actually more motivated by the quality of the coffee, making them important loyal customers who return often, integrating the same locations into their normal routines," he said.

According to Technomic’s “Market Intelligence Report: Coffee and Tea,” 14 percent of consumers say they are purchasing regular hot coffee more often today than they were two years ago, and 10 percent say the same about iced tea by the cup or glass.

The report also states that green tea is of interest to nearly three out of four consumers (73 percent), making it the most appealing variety for hot or iced tea. In recent years, the number of green tea products has increased significantly on chain menus, according to MenuMonitor data. Lemon and honey also are appealing tea flavors for a sizeable percentage of consumers (61 percent and 60 percent, respectively).

Overall, grocery, drug and mass-merchandise stores have experienced a nominal 15.9 percent increase in coffee sales from 2007-2010, the report notes. Although each type of retailer saw a gain, mass merchandisers achieved the biggest increase (53.1 percent) to coffee sales of $318 million in 2010 from $208 million in 2007, it adds. Although price increases played some role, the rise also is due to mass merchandisers such as Target expanding the food and beverage offerings, increasing pressure on traditional food stores.

With the exception of frozen/blended coffee drinks, all other types of coffee and tea drinks have steadily increased in price since 2008, the report states. Offered for an average price of $2.25 in 2008, regular coffee now sells for an average of $2.36. Similarly, tea and iced tea prices have gone up, increasing from an average of $2.40 in 2008 to $2.57 two years later, according to the report.

Technomic’s “Market Intelligence Report: Coffee and Tea” sourced its data from proprietary consumer research conducted for the company’s consumer trend reports and menu data, and insights from its MenuMonitor online trend-tracking resource. The report uses industry and trend data from Technomic's “Top 500 Chain Restaurant Report” and other publications. Syndicated retail data from SymphonyIRI Group, Chicago, adds perspective and allows for comparison of retail and foodservice trends, Technomic said.