Abstract
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive
environment
Product coverage
Coffee; Other hot drinks; Tea
Executive summary
Premiumisation trend is most evident in coffee
Coffee remained the largest sector in the US hot drinks market by a large
margin in 2007. Supply shortages coupled with steep increases in energy and
transportation costs drove most coffee manufacturers to raise their unit
prices during the year. This supported healthy growth in retail current value
sales but limited growth in volume terms. Strong growth in current value sales
was also attributable to a general trend towards premium products, especially
more novel organic, fair-trade, and Rainforest Alliance brands. Standard
mid-priced coffee brands like Folgers and Maxwell House struggled to maintain
their sector positions as competition from smaller premium brands intensified.
The launch of Folgers Gourmet in 2007 signals that the premiumisation trend is
even filtering down to brands that have traditionally had a mass-market
positioning.
Rising awareness of health benefits drives the positive development of tea
In 2007, increasing health concerns among US consumers spurred new interest in
tea, particularly antioxidant-rich green, white and red tea products. During
the review period, several studies reinforced consumer awareness of the health
benefits of certain types of tea. Manufacturers sought to capitalise on this
trend by launching new tea products containing antioxidant-rich ' superfoods'
such as pomegranate, blueberry, and acai. While white, rooibos and oolong tea
products have long lined the shelves of specialist tea outlets in the US,
growing consumer interest allowed them to penetrate mainstream retail outlets
towards the end of the review period. In 2007, most major grocery retailers
chains carried a wide range of green, white, red, rooibos and oolong tea
products.
Functional products aim to stem decline in other hot drinks consumption
Chocolate-based flavoured powder drinks and malt-based hot drinks continued to
suffer from a lack of interest among US consumers in 2007. During the review
period, both categories showed consistent declines in retail volume sales, as
the traditionally high sugar and calorie content of products did not sit well
with the wider trend towards healthier lifestyles. ConAgra Foods Inc tried a
new approach in 2007 with the launch of its Great Start and Pick Me Up Swiss
Miss variants, both of which contain added functional ingredients: the former
contains added vitamins and minerals, while the latter contains added
caffeine. While products fortified with calcium and vitamins have been
launched by flavoured powder drinks manufacturers in the past, these have
usually been targeted at parents seeking healthier alternatives for their
children. The new Swiss Miss products launched in 2007 are targeted at adults,
primarily women. If successful, this new approach should help to slow the
decline in chocolate-based flavoured powder drinks consumption over the
forecast period.
Diverse on-trade offerings drive consumer interest in coffee
Specialist coffee shops outlets like those in the Starbucks chain remained the
most popular on-trade locations for US consumers to buy coffee during the
review period. Other foodservice chains like 7-Eleven, Dunkin Donuts, Burger
King and McDonald' s took note and invested heavily in upgrading the quality of
their coffee offerings in an attempt to win over consumers. McDonald' s
announced perhaps the most ambitious strategy to date, with the rollout of
café complete with lattes, mochas and trained baristas planned for its US
outlets in 2008. Looking to replicate the success of the Starbucks brand at
the retail level, in 2007 Dunkin Donuts and Caribou Coffee became the latest
on-trade operators to launch fresh ground coffee and fresh coffee beans
products in supermarkets/hypermarkets and other off-trade channels. On-trade
outlets were also the source of several innovations in coffee towards the end
of the review period, from functional coffee with added guarana to new flavour
variants adaptable to regional preferences. Over the forecast period, on-trade
outlets are poised to play an increasingly important role in shaping consumer
tastes for hot drinks products of all kinds in the US.
| 
View Cart
