Coffee in Canada

PROSPECTS

Busy Canadian consumers turn to single-serve coffee but concerns over the sustainability of fresh ground coffee pods are on the rise

Premiumisation is one of the main drivers of value growth within coffee, with demand for higher quality, increased variety, more convenience, and sustainability all key. Hectic lifestyles and demand from time-strapped consumers continue to fuel growth in sales of single-serve options, although sustainability concerns are, to some extent, hampering growth in sales of fresh ground coffee pods, despite major players promoting their environmental credentials and sustainability.

Espresso-based coffee consumption on the rise, particularly amongst younger consumers

According to the Coffee Association of Canada, consumption of espresso-based coffee is on the rise, with 24% of 18-79-year-olds drinking it every day in 2018, vs just 14% in 2004. Consumption is highest amongst younger consumers, with 29% of 18-24-year-olds drinking it, compared to 16% of 65-79-year-olds.

Instant coffee sees comparatively low sales due to quality concerns, but rapid growth as it is easier to prepare

Instant coffee continues to be dynamic but is challenged by the fact that consumers consider it to be lower quality compared to fresh coffee. Instant coffee mixes tend to be the main drivers of growth within instant coffee as consumers appreciate their on-the-go nature, but sales are growing from a lower base as this category is still relatively immature and not as well established as traditional instant standard coffee.

COMPETITIVE LANDSCAPE

Pure Origin becomes Master Origin in an attempt to communicate Nespresso’s processing methods and unique character

Premiumisation is rife within coffee in Canada, with manufacturers using more sophisticated and attractive launches to increase interest in their already-established brands. Nestlé Canada Inc has tried to do this through the rebranding of its Nespresso Pure Origin fresh coffee range, changing the name to Nespresso Master Origin in an attempt to stress the unique processing and harvesting methods it employs.

Sustainability increasingly a concern, resulting in action from key producers

There have been growing environmental concerns over coffee pods, both from consumers and government regulatory forces. As a result, manufacturers have been keen to demonstrate willingness to become more environmentally friendly.

Maxwell House focuses on higher caffeine content and decaffeinated pods to appeal to two coffee-consuming extremes

Kraft’s Maxwell House is focusing on both high caffeine content and decaffeinated pods at the same time, in order to reach two opposing consumer groups: those that want more caffeine; and those that are eager to cut caffeine out entirely. The company has launched Max Boost pods with 1.

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