The Future of Coffee: Premium, All the Time, More Than a Drink
Nestlé Starbucks is listening to consumers to stay ahead of the trends (wherever they take us)
When we ask consumers about coffee, they often sound like they’re talking about a close friend. They’re passionate, they can’t imagine a day without it, and they share a deep emotional connection with it.
They’re also protective of their coffee moments. After all, coffee is a very personal drink, and in many ways, an expression of an individual. We like it just so. Couple this deep personal connection with the fact that the majority of Americans drink coffee, and you can begin to understand why coffee is ingrained in the American psyche, and a high-growth retail category today and in the years to come.
But to thrive in this ever-changing market, you need to know the consumer and be ready to meet them and serve them where they are. That requires understanding, and driving the trends that serve the market. It also requires having the vision, capabilities, and reach to serve an ever-growing world of coffee consumers.
The new Nestlé-Starbucks coffee alliance is uniquely qualified to do all of those things. Last year, Nestlé and Starbucks’ packaged goods and food-service divisions joined forces with a goal of better serving consumers. Working together, our two companies can offer coffee drinkers even more options — faster.
Coffee-drinking has evolved dramatically in the past few decades, moving through three “waves.” The first wave was basic coffee consumption. (Think drip coffee and a warming pad.) The second introduced premium coffee drinking, with high-quality beans and complex flavors and options. Today, we’re riding the third wave, in which coffee is an experience as much as it’s a beverage. We believe this third wave will crest in the next decade, and most everyone will be seeking an elevated and rich coffee experience.
To position Nestlé-Starbucks Coffee for whatever the next wave brings, we are living and breathing consumer-led innovation. That means delivering a premium product, embracing coffee’s versatility, and engaging with consumers who experience coffee with all of their senses. The opportunities on the horizon are exciting:
Elevating Coffee Experiences
The wine market in America began to expand when it became more than a drink. Now people of all stripes embrace wine as though they were sommeliers, with a sophistication and knowledge of the grapes, regions, and vintages that would have been reserved for experts just a generation ago. Coffee has undergone a similar renaissance. Consumers are more connected to the entire coffee experience and are savvy about everything from beans and brewing methods to the sustainability of coffee farming. Coffee aficionados operate as baristas. Nestlé Starbucks Coffee knows that nurturing and growing the premium coffee experience is important to consumers and an opportunity to continue our impressive growth in the category.
Reaching New Levels of Coffee Versatility
Coffee as a morning-only beverage is so 1990s. As people have come to understand the many ways coffee can be enjoyed — steaming hot, cold brew, flavored, coffee ice cream, or even coffee cocktails — the market has grown and is primed for future growth if we deliver exactly what people want. This too is about being consumer-led and consumer-responsive. The partnership between Nestlé and Starbucks will deliver an advantage, allowing us to innovate through products and experiences, so you can have your coffee when you want it, where you want it and how you want it.
Engaging From the First Look to the Last Sip
Connecting with consumers on coffee requires a deep understanding of the role coffee plays in our lives, and it means appreciating the aura around this thousand-year-old drink. Coffee provides functional benefits that may give people an extra bounce in their step, but it does so in a natural, clean way. This is appealing to all demographics, but it’s especially resonant with millennials who have grown up in a Starbucks world. Something ingrained in the Starbucks culture, in fact, is that the coffee experience is about being, not buying. Coffee awakens the senses. And whether in your home, in a café or on a grocery store aisle, your coffee experience is informed and influenced by the setting. Though we know consumers enjoy our products, we also know they value us in other meaningful ways, whether because of our commitment to farmers, our dedication to sustainability or even how we treat our employees. Engaging in coffee means engaging deeply in our brand and culture and investing in what we believe in. This connection with consumers is a path to long-term growth and shared success.
Nestlé-Starbucks is positioned to shape the future of coffee by our scale and reach, sure, but most importantly by the values instilled in all we do and by our healthy obsession with the consumer. We’ve been growing in the marketplace and have been a retail success story because we know who we are and we have identified the trends shaping the market today and the ones percolating tomorrow.
We understand why coffee is an integral part of the morning, afternoon, or evening for tens of millions of people every day of the year. And though our Nestlé-Starbucks Coffee team can’t tell you precisely what the future of coffee will bring, we can assure you that the exploration and elevation of the experience coffee-drinkers have enjoyed through our brands is a just small sip of what’s to come in the years ahead.