Beverage Industry

Single, Ready to Mingle

November 1, 2006

Single, Ready to Mingle

Elizabeth Fuhrman
Managing Editor

One is the loneliest number... well, I guess that is what America is saying vs. its European counterparts. Single-serve coffee machines aren’t taking off as hoped for manufacturers Sara Lee Corp. and Kraft Foods Inc. Two years ago, these companies and others introduced Senseo, Tassimo and other single-serve coffee systems, which use new machines, ranging from $50 to $150, and coffee pods to make café-type coffee at home. Since the machines were a success in Europe, the companies thought single-serve coffee would be a hit in the U.S. market as well.
Not the case. While U.S. coffee drinkers spend more than $4.1 billion on coffee they drink at home, the single-serve systems have earned only 2.4 percent of that, generating about $100 million in 2005, according to Mintel International and reported in the Chicago Tribune. That’s less than anticipated by Sara Lee and Kraft. Overall, the coffee market rakes in $19 billion for the beverage industry.
While the individual coffee packets allow consumers to make a drink at home for about $0.30, which is substantially cheaper than coffee shop coffee, cost doesn’t really seem to be a factor. Restaurant coffee sales are growing about 4 percent annually, much faster than at-home coffee sales, Mintel International reports. America definitely likes its caffeine (note that the energy drink category doubled its sales this year). It might be that they like more of it, because consumers aren’t normally drinking just one cup or a single-serving size. Whether brewing a whole pot at home or choosing from Tall, Grande or Venti at the local Starbucks, chances are one cup isn’t enough.
And size might not be the only factor. Whether stopping for coffee at the coffee or donut shop, quick-service location or convenience store, whatever ambiance or morning ritual this  offers the consumer adds a wanted, welcomed or endured interaction to his or her day. Are the commonly viewed non-conformist coffee drinkers social butterflies after all?