Food & Beverage

American consumers in no mood to give up daily coffee

Americans are still gulping down the coffee despite increasing costs and concerns about inflation.

Image: Adobe Stock.

July 27, 2023 by Elliot Maras — Editor, Kiosk Marketplace & Vending Times

Good news for restaurants and food trucks offering a cup of joe — American consumers are in no mood to go without their daily pick-me up: coffee.

That's according to the most recent National Coffee Trends Study Specialty Coffee Report sponsored by the National Coffee Association.

Samantha Evans (image provided).

"Inflation is on everyone's mind," said Samantha Evans, senior research manager at Dig Insights, during a webinar on the study. "It's impacting everything everywhere, and seemingly all at once, including how Americans drink and purchase coffee."

While inflation has come down from 7.5% in January of 2022, people remain worried about personal finances, Evans said. This isn't surprising as interest rates have increased dramatically in the past year.

"It's really starting to take a toll on consumers and their finances," she said.

The study, which queried more than 1,500 respondents earlier this year, found consumers are conscious of the higher price of a cup of coffee.

Compared to pre-COVID, the percent of past day specialty coffee drinkers who agree that a cup of coffee in a café is more expensive was 56% in early 2022 versus 66% in 2023, while those who said a retail pack of specialty coffee is more expensive rose from 56% in 2022 to 61% in 2023.

A 64% majority of past day specialty coffee drinkers also said they will be more cautious about spending habits in the next few months, a 6-point gain over the prior year.

Consumption holds steady

Coffee consumption nonetheless remains steady as 65% of Americans had a cup of coffee in the past day.

Nor are consumers trading down from specialty coffee to traditional coffee because of the higher prices.

This past January, 41% of Americans had specialty coffee in the last day, surpassing the pre-pandemic 33% in January 2020.

"This is great news," Evans said. "In fact, Americans are more likely to have had a specialty coffee in the last day than a non-specialty cup."

Specialty coffee refers primarily espresso based beverages — latte, cappuccino, espresso shots, hot or cold. It also includes non-espresso based beverages such as cold brews, nitros and frozen blended coffee. It also includes brewed or drip coffee made from premium beans, which Evans said is a subjective definition.

Traditional coffee refers to brewed drip coffee from any format — whole beans, instant or ground from non-premium beans or ground varieties, and can include additives.

Specialty on the rise

Consumption of both espresso and non-espresso based beverages in the specialty category has seen steady through the pandemic, Evans said.

In the past week, half of Americans consumed a specialty coffee, with the top beverages being latte, cappuccino and espresso, all at 16% – about the same number as in early 2022.

Cold beverage coffee has also continued its pre-COVID trajectory. Past week penetration of frozen beverages rose from 13% in 2016 to 14% in 2023, while cold brew rose from 6% to 15% and nitro rose from 5% to 7%.

How and where it's prepared

In-home consumption has increased against out-of-home consumption since the pandemic.

The percent of consumers who prepared specialty coffee in-home rose from 76% in 2020 to 77% in 2023, while the percent that bought it out of home fell from 46% to 40%.

"Out of home preparation is still lower," Evans said. "So it would seem that we have not all returned from our pre-pandemic lifestyle."

The number of consumers using single-cup brewers increased during the pandemic as nearly one third (27%) of past day specialty drinkers had coffee prepared in a single-cup brewer, while 37% of those who bought a coffee machine during the pandemic bought a single-cup brewer.

The purchase of single cup brewers has reached a new high, tying that of drip coffee makers.

"Many people were drawn to these machines in the pandemic to avoid contact with other people in shared circumstances," Evans said.

Who drinks specialty coffee?

Agewise, specialty coffee consumption is driven by those under 40. This is especially true for cold, non-espresso-based beverages.

Hispanics are more likely to consume espresso based beverages than other ethnicities, while Asian Americans tend to drink more non-espresso based beverages.

Flavored coffee, which refers to bean or ground coffee that has been pre-flavored versus flavors added to brewed coffee, is more common among specialty coffee drinkers. A 54% majority of specialty drinkers had a flavored coffee yesterday compared to 31% of traditional drinkers.

Flavored coffee, like specialty coffee, is driven by those under 40.

Consumption is also higher among Hispanic and African Americans, the latter forming the highest consumption group. Hispanic Americans like more sweet and spicy flavor while African Americans like citrus and zesty flavors.

Vanilla is the most popular flavor at 17%, followed by mocha at 12% and hazelnut and caramel, both at 10%.

For coffee additives, 10% of specialty coffee drinkers added a flavored syrup to their coffee yesterday. They are also more likely to add plant-based milk to coffee. In the past week, 10% added plant-based milk, 6% added almond milk and 3% added oat milk.

Photo: LinkedIn