While coffee professionals gather at the Specialty Coffee Association of America conference in Atlanta this weekend — the annual mecca of the industry — I’m resigned to follow along vicariously via Twitter. One thing that caught my eye today was the National Coffee Association’s study on coffee drinking trends in 2016.
The fundamental story it tells is one of change; a new generation ushering in a shift away from a cheap, standardized beverage, towards a more conscientious appreciation of quality, relationship, and shared values. Here are a few points from the study that stood out to me.
Growth of gourmet
The study reported 2x-3x more consumption of “gourmet” coffee over the last eight years, concentrated primarily on the young:
“Between 2008 and 2016, past-day consumption of gourmet coffee beverages soared from 13% to 36% among 18–24 year olds, and from 19% to 41% for those 25–39.”
They define “gourmet” as “what we think of as ‘specialty coffee,’ featuring gourmet traditional coffee, espresso-based beverages, and iced or frozen drinks.”
While older generations of coffee drinkers tend to compute “value” as price, younger consumers place more value on other factors such quality, sustainability, and company ethos. Rather than being cost-driven, they’re values-driven.
“As many marketers have realized, Millennials, whose purchasing power is growing (with about $200 billion in purchasing power each year) are conscientious shoppers, and want to feel good about where they spend money. They prefer to support companies that reflect their own values on an organizational level, and products and services which add value to their lives.”
The study also cited a 2015 Nielsen report saying that 66% of respondents said they’d pay more for products and services that have a positive social and environmental impact, and another report that found “50% of Millennials make an effort to buy products from companies that support the causes they care about.”
An appetite for quality
As supporting evidence for consumers’ willingness to support products that align with their values, Transparent Trade Coffee found that people were happy to pay a premium for single-origin coffee:
“The average retail price that select specialty roasters charged for lots that included growers’ names was an average of $9.95 higher per pound than the average retail price of those that didn’t.”
Not only do consumers get an exceptional cup of coffee, but high-quality micro-lots tend to garner their farmers a much higher price than a more ordinary coffee would.
Lastly, as founder of Crema.co, a marketplace that connects coffee drinkers with single-origin coffees from unique specialty roasters via a coffee subscription, I was interested to hear that 16% of the NCA’s respondents said they would consider having fresh-roasted coffee delivered to their home. I’m sure that percentage will continue to grow rapidly over the next couple of years. The NCA study commented:
“Door-to-door delivery opens the door to more intimate interactions. By building relationships (and trust) over time, subscription services are positioned to educate and inform consumers on key issues facing the coffee industry.”
In the end, there weren’t any surprises in the report; only more supporting evidence that the “third wave” coffee movement is continuing to gain momentum as a new generation ushers in a new set of values that emphasize quality, sustainability, and relationship. I’ll raise a mug to that.