TEN 2010 TRENDS
NINE: RTD Coffee & Tea
The experience is hardly comparable. No freshly brewed coffee or tea drinker will substitute a bottle or can. Yet the U.S. market for coffee and RTD coffee was $34 billion last year and RTD tea reached $4.3 billion in sales at grocery and convenience stores, three times the $12 billion spent at independent shops. The threat is more from the phenomenon of “pod”-brewed coffee and less about Frappaccinos (with $250 million in earnings, Starbucks/PepsiCo still dominate this market segment after 15 years).
illy issimo, a joint venture of Coca-Cola and the venerable Italian coffee dynasty, illy caffè, is building the brand but at a time when the category is drifting according to Information Resources Inc., which awards $180 million and 85 percent market share to Starbucks with Doubleshot at $13 million with 14 percent market share and a small showing illy issimo Cappucino with a tiny $75,000 in sales in food, drug and convenience during the 52 weeks ending June 14, 2009. Sales across the entire category were down 15.3 percent to $216 million.
Lipton® and AriZona® dominate RTD tea with $423 million in sales for Lipton and a 36-percent share of market followed by $332 million in sales and 30 percent market share for AriZona.
It’s important to recall that even the most dedicated specialty consumers don’t get all their coffee and tea in the same place. Green Mountain sold 432 million k-cups last quarter. Offices are the largest buyers as they find providing single-serving coffee economical versus a whole pot, but whether at the office or served at home every cup is a loss in sales to retailers of between $1.38 (the average price of brewed coffee) and $2.45 (the average paid for an espresso drink).
Convenience and value are in conflict during a recession which explains the 15 percent category decline in year-over-year bottled coffee sales. Bottled tea managed a small (.5%) gain showing its resiliency.
Randy Wirth, CoOwner/Roastmaster
Caffe Ibis Coffee Roasting Company, Inc.
Logan, Utah
I certainly hope that the ready to drink coffee takes over soda pop territory! There is no way that frap-in-a-can will seriously compete with specialty coffee houses. Again, it will only create interest in the real thing. – R. Wirth
Ric Rhinehart, Executive Director
Specialty Coffee Assn. of America
Long Beach, Calif.
This battle will be largely fought by non-specialty coffee players. – R. Rhinehart
Bruce Milletto, President
Bellissimo Coffee InfoGroup/The American Barista & Coffee School
Portland, Ore.
I think this is a market we will see huge growth in. If anyone has visited China or Japan you will see how canned coffee has made a gigantic impact. Look at the impact Red Bull and other such products have made in the U.S.A. This trend will only grow – especially amongst the younger consumer. ‑ B. Milletto
NEXT
TREND TEN: Grocery & Mass Market
Click to read trend No. 10: Grocery Growth - State of Industry Report 2009
TEN 2010 TRENDS
Click to read trend No. 1: Consumer Behavior
Click to read trend No. 2: Consumption
Click to read trend No. 3: Fast-food Fight
Click to read trend No. 4: Contraction
Click to read trend No. 5: Origin
Click to read trend No. 6: Mermaid Maneuvers
Click to read trend No. 7: Specialty Tea
Click to read trend No. 8: Healthy & Sustainable
Click to read trend No. 9: RTD Coffee & Tea
Click to read trend No. 10: Grocery Growth
Click to read minor trends - State of Industry 2009
.jpg)
