MILAN – Bill Murray, president and CEO of the National Coffee Association, which represents the U.S. coffee industry, proved to be the ideal person to analyse the latest market developments through data and different consumer channels. The data provided is sourced from NCA’s Spring 2024 National Coffee Data Trends report, and the Specialty Coffee Consumer Insight Report which NCA released in partnership with the Specialty Coffee Association. The next edition is expected in September.
Past-day coffee consumption is at its highest level in more than 20 years, according to the NCA’s Spring 2024 NCDT. Which channels are growing the fastest? What are the main drivers of growth?
Murray: “Coffee has consistently been America’s favorite beverage, and its popularity has grown significantly over the past several decades. As reported in the National Coffee Association’s most recent National Coffee Data Trends (NCDT) report, 67% of Americans have had coffee in the past day, more than any other beverage – including tap or bottled water – and representing a 20-year high.
Even the COVID-19 pandemic didn’t affect coffee’s popularity – though it did, understandably, influence where and how people drank coffee. The pandemic saw at-home coffee consumption (always the most popular) hit new highs, and it increased the use of drive-through, delivery, and app-based ordering options.
While traditional coffee continues to have the highest past-day consumption, past-day specialty coffee consumption has experienced significant growth – up by a whopping 80% since 2011. Espresso-based beverages contribute to specialty coffee’s growth – 44% of Americans had an espresso-based beverage in the past week, up by 10% since spring 2023.
Other beverages whose consumption is trending up include ready-to-drink coffee (sold bottled, canned, or jarred) and cold brew. 15% of past-day coffee drinkers had ready-to-drink coffee, which has almost doubled since last year.
Meanwhile, cold brew was relatively unknown even 10 years ago and now is enjoyed by 16% of American adults in the past week. 70% of people who are aware of cold brew have a positive perception of it.
It’s not easy to pinpoint precisely what drives coffee’s continued popularity and growth, but we know that coffee keeps up with consumers’ taste for tradition, just as well as it meets changing needs and preferences over time.
We also know consumers are increasingly interested in health and wellness. There’s been increasing attention to the robust scientific evidence that coffee is associated with significant health benefits, which may also contribute to America’s continued love affair with coffee.”
Bill, what are the key factors driving the growing success of independent coffee shops? Do you think the branded coffee shop market in the US is close to saturation or is there still significant room for growth?
“As reported in NCA’s 2023 Economic Impact Report, coffee is a powerhouse in communities all across the United States and a major engine for success in the U.S. economy. Coffee accounts for 8% of the total value of the U.S. food service sector, providing more than 2.2 million jobs and adding $343 billion to the economy every year. Coffee shops contribute significantly to this economic impact.
Americans spend an average of $301 million every day on coffee and related goods ($110 billion per year), with coffee shops accounting for just under one-third of that activity ($32.9 billion per year). Given the strong and rising popularity of coffee overall, NCA is confident there’s room for growth for all kinds of coffee businesses.”
What are the most significant trends currently observed in household consumption? What changes have occurred in American consumption habits over the last 20 years?
“Home has consistently been the most popular place for Americans to enjoy their favorite brew. 83% of the past-day coffee drinkers drank coffee at-home; 35% out-of-home. These figures have been fairly stable over time.
The drip coffee maker continues to be a staple, with 59% of Americans owning one at home – up by 15% since last year. The next most popular machine is a single-cup brewer, owned by 48% of Americans. While instant coffee is only the fifth most popular preparation method (8% of past-day coffee drinkers had instant coffee).”
Murray adds “in terms of overall changes in American consumption habits, past-day specialty coffee consumption (45%) recently surpassed past-day traditional coffee consumption (44%) for the first time, according to the Specialty Coffee Report we published in June in partnership with the Specialty Coffee Association.”
What are the most interesting trends we can observe in Gen Z?
“The NCDT only tracks coffee consumption for Americans over the age of 18, and in general coffee’s popularity rises with age. 59% of Americans aged 60 and over prefer traditional coffee (the highest traditional coffee popularity of any age group). Consumption by 18-24 year olds and 25-39 year-olds, however, has recently reached new heights – 47% and 70% in the past day, respectively.
Our Specialty Coffee Report shows that 42% of 18-24 year-olds had specialty coffee in the past day, along with 52% of 25-39 year-olds, which is the highest of any age group. The report also found that 25-39 year olds are more likely to consume espresso (24%) and cold brew (also 24%) than any other age group.”
Bill, in the European Union, the new deforestation regulation (EUDR) is about to come into force, which is set to be an important turning point in the global fight against deforestation. How is the American industry addressing forest conservation and sustainability challenges?
Should the U.S. Government consider adopting a similar legislative framework?
“First, regarding the EUDR, coffee has been grouped with other commodities such as beef and palm – and yet it couldn’t be more different. Coffee grows on trees which are carefully tended for decades. So a “one size fits all” approach to regulation is simply misguided.
It is important to note that coffee companies have, for years, been at the forefront in addressing sustainability. Individual companies have made investments, and commitments, such as those set forth in the Sustainable Coffee Challenge, to make coffee more sustainable. Looking forward, there are industry-supported organizations like World Coffee Research investing in projects that will ultimately ensure that coffee farmers thrive, and that natural resources can be better protected.
NCA’s Sustainability Showcase includes examples of our members’ efforts.
We believe that the way forward is through a stronger public-private partnership, with greater support and investment from the U.S. Government to help support coffee farmers all around the world, and help ensure that Americans have a dependable supply of coffee.”
Could you please provide us with an update on the current legal dispute concerning decaffeinated coffee in the U.S., on which the NCA has taken a very firm stance?
“The bottom line is clear: All coffee, including all decaffeinated coffee, has been associated with good health. This has been shown over and again in independent research. Unfortunately, there’s a scare campaign about decaffeinated coffee underway.
Activists known for raising unfounded fears about the safety of common and well-regulated food ingredients have petitioned the Food and Drug Administration to ban the most common decaffeination method – known as the European Method, which uses a chemical called methylene chloride to remove caffeine from coffee beans.
The European Method is approved as safe by the FDA, the European Union, Australia, New Zealand, and other governments around the world.
A similar ban was proposed in the California legislature. The good news is that California lawmakers raised serious concerns about the proponents’ complete lack of scientific evidence. The California bill’s authors shifted tactics from first proposing a ban, then to proposing a warning label, and then to simply studying the issue, before the bill was dropped.
The majority of decaffeinated coffee has been made using the European Method for more than 50 years. Not only is there no evidence of a health risk – to the contrary, there are health benefits associated with drinking decaffeinated coffee, of any type. Ironically, the activist groups proposing these misguided bans claim to have tested decaf samples and failed to find a single one that exceeds FDA guidelines.”
Which are the most promising markets for the American coffee industry?
Murray concludes: “Our consumer research shows there’s really no limit to coffee’s opportunities. Coffee is associated with unique health benefits, is popular across every age group, succeeds in a wide variety of retail and food service settings, and can adapt to diverse tastes.
Although I can’t claim to predict the future, I can confidently say that the coffee industry in the United States will only continue to find new ways to thrive. Coffee is more than a beverage; it’s a touchstone in people’s lives, and I don’t expect that to change.”
