Home » Category Focus: Coffee changes the playing grounds
Category Focus: Coffee changes the playing grounds
Energy, sustainability, single origin, Fair Trade and antioxidants are a few of the trends impacting coffee and ready-to-drink coffee drinks this year. Ground coffee posted nearly $2.3 billion in sales, which marked an increase of 8.2 percent in food, drug and mass merchandise outlets (excluding Wal-Mart) for the year ending Oct. 5, according to Information Resources Inc. (IRI), Chicago. Whole bean coffee sales also increased 3.2 percent to nearly $330.2 million in sales, during the same time period.
Even with the popularity of coffee flavors in other beverage categories this year, such as energy drinks, dairy-based drinks and alcohol, the RTD cappuccino and iced coffee category decreased nearly 4 percent in sales during the same time period to a total of $246.3 million, IRI says.
RTD coffee drinks’ decline isn’t a downer for the entire segment. In 2007, introductions such as Starbucks Iced Coffee and The Coca-Cola Co.’s Godiva Belgian Blends helped the category grow by 12 percent for the year ending Oct. 7, 2007, according to IRI. Once the newness wore off this year, Starbucks Iced Coffee sank 40.7 percent and Godiva Belgian Blends dropped 62.4 percent.
One brand entering the Top 10 RTD coffee drink category for the first time is Emmi Caffè Lattes from Swiss milk producer Emmi, through Emmi USA Inc., Valley Cottage, N.Y. Packaged in 7.7-ounce cups with lids, Emmi Caffè Lattes are a blend of espresso and whole, low-fat or fat-free milks. The line is available in Macchiato, Light, Cappuccino and Mocha varieties.
The focus also has shifted to a more international nature for The Coca-Cola Co. and Starbucks. In the spring, The Coca-Cola Co. and Illycaffè SpA, Trieste, Italy, finalized their global joint venture, Ilko Coffee International, and introduced three premium RTD coffee products in several European countries, with plans to expand the line through the Coca-Cola system, including North America. The first releases included Illy Caffè, a full-bodied, espresso-based coffee with no milk; Illy Cappuccino, a blend of Illy espresso, milk and dark cacao; and Illy Latte Macchiato, Illy espresso combined with milk.
RTD coffee category leader Starbucks Coffee Co. set its sights on Japan. In October, Starbucks and Suntory Ltd. launched Starbucks Doubleshot Espresso Doppio and Starbucks Doubleshot Espresso Con Panna in convenience stores across central Japan. Starbucks Doubleshot is the company’s second line of ready-to-drink coffees in Japan. It also features Starbucks Discoveries chilled cup coffees, which the Suntory partnership introduced in 2005.
In the United States, Starbucks, through its North American Coffee Partnership, with PepsiCo., expanded its brand name with a new energy and coffee hybrid. Starbucks Doubleshot Energy + Coffee contains coffee, B vitamins, guarana and ginseng. Available in Coffee, Mocha and Vanilla flavors, Doubleshot Energy + Coffee is packaged in 15-ounce cans. In addition, the company announced that it will be expanding its portfolio of RTD coffee products in 2009, but did not offer any specifics.
Los Angeles-based Roll International’s Pom Wonderful brand released PomX Iced Coffee, a coffee and energy drink hybrid of a different style. PomX Iced Coffee combines 175 mg. of caffeine and PomX, a pomegranate antioxidant supplement made by Pom Wonderful. PomX Iced Coffee offers antioxidants equivalent to an 8-ounce serving of Pom Wonderful 100 percent Pomegranate Juice, but does not include or taste like pomegranate juice. Instead, PomX Iced Coffee is made with all-natural ingredients, including Arabica coffee beans from Rain-forest Alliance Certified farms, milk from cows not treated with rBST growth hormone and organic cane sugar.
Another juice-maker, NBI Juiceworks, Orlando, Fla., also expanded into the RTD coffee market. The company introduced Sun Shower Super Blends Iced Coffees, Lattes and Teas. Each 9.5-ounce bottle offers 70 calories and the company’s “Lifeguard Protection,” a fortification combination of zinc, calcium, magnesium and vitamins A, E and B3, blended with coffee and non-fat milk. Sun Shower Super Blends include Iced Coffee, Mocha Cappuccino and Chocolate Raspberry Frappe varieties.
With coffee’s caffeine content, the energy drink category is a common target for RTD coffee drinks. This fall, Adina for Life Inc., San Francisco, released Natural Highs, an all-natural coffee energy drink. A blend of Fair Trade organic Colombian coffee, reduced-fat milk, Fair Trade organic evaporated cane juice and guarana, Natural Highs delivers the antioxidant equivalent of four servings of fruit through a proprietary cold-brewing process to enhance and preserve the benefits inherent in the coffee bean, the company says.
In addition to more better-for-you options, RTD coffee drinks also are entering into the functional beverage category. Produced in collaboration between Javalution Coffee Co., Ft. Lauderdale, Fla., and Insight Beverages, Lake Zurich, Ill., JavaFit Lattes offer benefits to support an active lifestyle, improve health and wellness or assist with weight management goals, the companies say. The lineup includes: JavaFit Extreme Latte, fortified with green tea extract; JavaFit Diet Latte, fortified with weight-loss supplement Advantra Z; and JavaFit Focus Latte, fortified with alpha GPC to promote mental focus and multivitamins; and JavaFit Immune Latte, fortified with echinacea and multivitamins.
The ground coffee segment continues to see sales gains partially due to new introductions and brand reformulation. New product growth in ground coffee was spurred by Dunkin’ Donuts’ introduction last year into the retail channel. Dunkin’ Donuts, Canton, Mass., partnered with Cincinnati’s Procter & Gamble to release a line of whole bean and ground coffees. In Dunkin’ Donuts coffees’ first year in the market, the brand achieved $90.8 million in sales and 4 percent market share. The line’s newest introduction Dunkin’ Dark, made with 100 percent Arabica beans, is being marketed as “Our Darkest Roast,” by the company.
Procter & Gamble’s category-leading brand Folgers saw its sales increase 5 percent to $442.4 million. In August, the company reformulated its Folgers brand with an enhanced, proprietary roasting process that pre-roasts the coffee bean, helping to reduce bean moisture and improve roasting consistency, Procter & Gamble says. Because the new roasting process enables Folgers to get more coffee from every bean, Folgers Classic Roast and Coffeehouse Series canisters feature a slight reduction in packaging weight; however the volume remains the same.
Procter & Gamble also released a new 39-ounce canister for Folgers Classic Roast and Decaf and a new 27.8-ounce canister for the Folgers Coffeehouse series. The initiative represents Folgers’s most significant investment in coffee innovation, the company says, and is supported by a “Roasted with Care” marketing campaign.
Last year, the No. 2 ground coffee brand, Kraft Foods’ Maxwell House, underwent a reformulation to include 100 percent Arabica beans. In addition, Kraft introduced a new plastic container for Maxwell House’s larger sizes. This year, the company changed the Maxwell House lineup to include Master Blend, Colombian Supreme, French Roast, Breakfast Blend, Dark Roast, South Pacific Blend, Lite, Original and Slow Roast coffees, and Original Decaffeinated and Master Blend Decaffeinated coffees.
In addition to increasing sales, coffee-makers also are emphasizing a higher importance for Fair Trade and sustainable coffee. This fall, Starbucks, a purchaser of Fair Trade certified coffee already, announced it would double its purchases to 40 million pounds in 2009. This makes the company the largest purchaser of Fair Trade certified coffee in the world, it says. Sara Lee further increased its commitment to sustainable coffee with plans to buy 53 million pounds of certified coffee beans in 2009. That is 30 percent more sustainable coffee than in 2008.
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Beverage Industry’s November issue features our annual Craft Beer Report where we provide insight about how the craft beer segment is recovering after the onset of the pandemic halted many on-premise sales. Also in this issue we analyze the factions of the dairy drinks and dairy alternatives, the latest trends impacting the use of protein ingredients in beverages, the release of our annual Trucks Report with updates on 2021 releases, and much more!