How will growth in coffee market in U.S be in the future


Coffee Industry U.S: A Brief Introduction

A study conducted by the National Coffee Association in the U.S was asked to measure the ways that the coffee industry contributes to the U.S economy. The final report was done in collaboration with the Specialty Coffee Association of America. The above was the first comprehensive study of the impact of coffee on the U.S economy.

Coffee is the most commonly consumed beverage in the U.S, even more than tap water by volume. Coffee touches almost all races and communities inexplicably and the growing coffee culture in the U.S is a major contributor to this phenomenon.

The coffee industry and other allied services comprise approximately 1.6% of the total US GDP. In 2015, the coffee industry accounted for more than USD 200 billion. The coffee industry is responsible for creating more than 1.6 million jobs in the U.S. The main source of revenue for the coffee industry is from the foodservice industry and other ancillary processes that result in value addition like roasting the coffee beans. There exists upwards of 37,000 coffee shops in the U.S as of 2019.

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It is estimated that around 64% of American adults consume coffee daily. Marginally, by sex, the proportion of American women coffee drinkers to men coffee drinkers is higher by 2 percentage points. Around 400 million cups of coffee are consumed daily in the United States.

Economic Impact of Coffee Industry in U.S

The coffee industry in U.S is primarily intended for the foodservice sector. It is a consumer-oriented industry at its heart as is evident from the trivia above. The supply chain of the coffee industry includes importers, transporters, roasters primarily. Ancillary processes include whiteners, sweeteners, flavourings and maintenance of the equipment.

Importers are the individuals involved in global trade, who source the best coffee beans from around the world and import them to the states. They either sell it as coffee beans itself or undertake further value addition by roasting, grinding and powdering the beans.

Transporters are that facilitation channel between the importer and the business intermediary. They transport the coffee beans in long haul trucks or goods trains from the site of unloading of coffee beans to the warehouse of the intermediary. The intermediary sells it to business to consumer retailers in the given city where the warehouse is located at.

Consumer retailers roast the coffee and sell the coffee to the final consumer as the end product. The consumer retailers also play a pivotal role in generating demand for ancillary processes like maintenance of the equipment, demand for dairy whiteners and flavourings and other artificial and natural sweeteners like aspartame and stevia.

Major Players in U.S Coffee Industry

Starbucks is by far, the largest coffee chain in the US. It retains around 40% of the total coffee shop market in the U.S. The chain has around 14,875 outlets across the country. It added around 585 outlets to its tally over the financial year before the onset of the pandemic.

Dunkin’ is the second-largest branded coffee chain in the U.S. They own around 9,750 outlets across the country. The chain opened 309 outlets over the FY2019 to achieve a 26% market share of the coffee industry in the U.S.

JAB Holdings, a German conglomerate, also owns a significant share of the coffee market in U.S. Together the above three mentioned players account for 78% of the branded coffee market industry in the U.S.

Latest Trend in US Coffee Industry

The coffee industry is dynamic and ever-evolving. Manufacturers find different ways to reinvent and rebrand this beverage of popular sentiment. New ideas and innovation spur this industry forward and set in motion a sequence of unexplainable incidents for those who consume this popular beverage. From Kopi Luwak to Dalgona Coffee; these are a few trends that caught onto the consumer coffee market in U.S.

Dalgona Coffee is one of the key consumer sensations within this market. It went viral in the year 2020. It is a judicious blend of whipped cream, coffee powder, sugar and water. Dalgona coffee rose in popularity in the U.S due to its simplicity to prepare and its social media presence on platforms like TikTok.

The second is Snapchilled Coffee. Snapchilled Coffee is a ‘hot brew’ response to a cold brew. It takes freshly brewed hot coffee, “snapchills” it and cans it. It is instant coffee on the go, that you can pick up over the counter from a supermarket.

The benefits of snapchilling are manifold. Primarily, brewing it hot, the manufacturers can extract all the right flavours from the coffee beans. Subsequently, snapchilling the coffee immediately ensures minimum flavour is lost and the brew does not become diluted by the addition of ice or water. Finally, the brew is canned undiluted. This ensures that the end consumer reaps the full benefit and thoroughly enjoys the flavour of the coffee.

The trend that is in vogue in U.S coffee market is plant-based non-dairy alternatives to regular coffee. In 2020, U.S market for non-dairy milk market stood around USD 18 billion. A growing and significant population of vegans and lactose intolerants contribute to this. Catering to this demography, people prefer to serve coffee in vegan dairy alternatives like coconut, soy or oat milk.

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