Coffee in 2018: The New Era of Coffee Everywhere

Strategy Briefing

About This Report

Jun 2018

Though growth in coffee is nothing new, the nature of this growth is shifting. Expansion continues, but from a wider range of categories, channels, and occasions, from ready-to-drink coffee to online commerce to coffee shops. This new report seeks to connect those dots, examining the world of coffee from end to end, and considering what’s next.

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Coffee in 2018: The New Era of Coffee Everywhere

Coffee’s growth formula shifts

The leading drivers of growth in global coffee have shifted, as emerging regions such as China, as well as emerging categories such as ready-to-drink coffee, come to the fore.

New brewed beverages drive new occasions

While ready-to-drink coffee is still a relatively small category globally, the world of soft drinks is in flux, with bottled water taking share from seemingly every other category and consumer concerns about sugar growing – this creates real opportunity for innovative beverages.

Coffee shops and food service more important than ever

Away-from-home channels have become the most important drivers of innovation in global coffee, while also creating valuable consumer relationships in an era of growing internet commerce.

The race is on to serve coffee for every occasion

There is a great deal of growth in coffee, but the sources and channels are highly fragmented, favouring those able to operate across a wide range of occasions and buying channels.

More brands needed

It then follows that more brands are needed to serve this demand, particularly with many large global brands in a state of upheaval – successful global players must become more comfortable with larger portfolios and a wider range of points of sale.

Introduction

Scope
Key findings
The era of good coffee everywhere is upon us
How is coffee changing?
A new view of the global coffee market
A new era for coffee: four key trends

Coffee at a Turning Point

Coffee enters a new phase of an impressive long-term growth story
Coffee combines enviable growth with significant global volume
Premiumisation continues across the globe
Consumers continue to trade up to better coffee, driving value sales
Yet the great coffee pod surge is slowing
Real threats to the pod category on the horizon
Emerging markets forge a new path
Coffee shop spending more important than ever
Asian coffee demand drives new segmentation
Grouping the key growth markets
What is driving growth in the key markets?
Looking ahead: China demand indicative of global shift
Three long-term shifts to watch

New Channels, New Disruption

Understanding a long-term shift in coffee distribution
Large scale shift to online, away-from-home channels
Internet retail penetration still low across global grocery
Subscriptions connect the coffee shop to the home
Out-of-home channels a story of roast and ground coffee
“Coffee-focused foodservice” continues to expand
Coffee and bakery-led cafés to define a new era for fast food
Convenience stores and traditional retail stay in the picture
How coffee shops can connect the dots

The “Coffee Everywhere” Era Begins

The next stage for coffee drinks
Water and “water-like” products to drive global beverage volumes
Sugar and safety concerns put more energy occasions in play
What occasions can coffee serve?
New products suggest new directions for coffee
Goodkind Coffee offers a (potential) glimpse of coffee’s future

Competitive Landscape

Finding a path in a more fragmented age
Leading coffee and tea players look to diversify
JAB’s growing empire reorders the world of coffee
Nestlé/Starbucks deal one of many to come
Internet retailing creates new opportunities for niche brands
Peet’s Coffee’s success points to a more regional, integrated model

Conclusion

Headwinds and looming issues
Final takeaways

Appendix

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