It’s no surprise that the overall coffee market is growing. Driving this growth is the quality of coffee and the options for customization available to customers. New formats and varieties are emerging as coffee continues to resonate with consumers.

The increasing interest in specialty coffee drinks is creating an expanding market of discriminating coffee drinkers. While the quick pick-me-up isn’t quite a thing of the past, today’s coffee drinkers are more focused on finding the finest in flavor, aroma and freshness. Younger coffee drinkers in particular are influenced by the prevalence of coffee shops and come to expect the same quality wherever they dine. Staying out in front of coffee trends can be a critical factor in an operator’s success.

According to research at Mintel, cold brew coffee is the hottest trend in the industry with the coffee format experiencing steady growth since 2010, and sales rising 115% between 2014 and 2015. Considering that over the past five years cold brew coffee sales have skyrocketed a whopping 580%, estimated to be an 18 billion dollar business in 2020. Consumers have proven that cold brew is here to stay.

While cold-brew is growing, hot beverages are still a pillar of today’s c-store business. C-stores represent about 11 percent of overall hot-beverage revenue and rank fourth in hot-beverage segments, behind limited-service coffee shops, quick-service restaurants and full-service restaurants. The success of coffee sales outside of the c-store realm is not only driven by the growing number of outlets for coffee drinkers to get their fix, but also by coffee shops capitalizing on consumers’ love for customizing what they eat and drink.

Coffee is the perfect beverage for Millennials. Coffee offers expansive variety and the ability for almost endless customization, something that this newest generation of consumers have come to expect. No wonder, people aged 19 to 34 make up 44% of the world’s coffee drinkers.

What makes Millennials so influential in this recent boom? For starters, younger consumers are more likely to consume coffee out-of-home at a rate of 46% versus 26% of older consumers. Millennials are also the core contingency of today’s third wave of coffee brewing. This move away from traditional coffee to new trends is exploding in big cities and spreading in popularity among young out-of-home coffee consumers.

A strong coffee program is also a great pull-trough sales generator. Experts suggest utilizing bundling opportunities to increase both coffee and ancillary product sales. According to Technomic, “meal complement” purchases account for about 70% of overall hot-dispensed-beverage volume. Playing to the value and convenience that today’s consumers seek, bundling for breakfast is an effective sales strategy, especially among younger consumers. Technomic insights reveal that more than half of consumers ages 18 to 24 say that breakfast combo meals, often featuring a coffee beverage, are important offers at foodservice outlets and impact their decision to visit that operation. As c-stores upgrade their specialty coffee programs, they should consider pairing with gourmet breakfast pastries or breakfast sandwiches to compete with the bakery-cafes and QSRs that have similar premium offerings.

Partnering with the right coffee provider is the surest way to drive customers in for their daily cup. With today’s discerning coffee drinkers, the quality of the coffee you serve is the make-or-break difference on whether they continue to frequent your operation.

Dennis Paper & Food Service is partnered with New England Coffee and together we are helping our customers meet the demands of today’s coffee drinkers. New England Coffee’s roasters have developed and refined their roasting process to guarantee premium coffee beans with distinct smoothness and characteristic taste. Each variety of coffee bean requires a different roast time and their experienced roasters use both smell and sight to determine when the desired roast has been achieved. This roasting process has been a tradition at New England Coffee since 1916.

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Sources
NCA National Coffee Drinking Trends Report, 2017
Gourmetinsider.com, 2016
National Coffee Association
Content courtesy of Red Diamond
2017 Red Diamond Beverage Council
Bloomberg, Oct. 2016

Millennials account for 80 million consumers, 11.6 million households with kids, and are expected to spend $200 billion dollars this year. And by 2020, Millennials’ spending power will hit $1.4 trillion a year and that will account for 30% of U.S. retail sales, according to Accenture.

Millennials have now overtaken Baby Boomers as the largest living generation and with immigration adding more numbers to this group than any other, the Millennial population is projected to peak in 2036 at 81.1 million. By 2050 there will be a projected 79.2 million Millennials, according to the Pew Research Center.

It’s no wonder that Millennials are getting so much attention from marketers. But there are plenty of challenges.

Millennials are the most diverse generation ever and they comprise everything from single mothers to middle class professionals to growing families. They range in age from 18 to 34 and appear in every social class and have lifestyle interest that range from hip-hop to shopping for the healthiest baby foods.

With all of this diversity, there is no single answer when marketing to Millennials, however, Millennials have had a major impact on the way marketers target and communicate with them. Let’s take a look at five lessons Millennials taught marketers that they are putting to work in their own campaigns.

1. Authenticity

It is well known that Millennials distrust traditional marketing and advertising. Authenticity builds trust with Millennials and they seek brands they can develop true relationships with, have conversations with. So keep your communications, marketing messages and content as authentic as possible. Provide real, actionable tips and be transparent in sharing your company values.

2. Corporate Social Responsibility

This is a big one for Millennials. Brands that stand out among this group tend to clearly communicate their corporate responsibility programs and, even more importantly, follow through. Millennials seek out and are very loyalty to companies that align with their lifestyle interests and values. Some of these include, charitable causes, protecting the environment, sourcing local ingredients, helping them maintain a healthy lifestyle, and treating employees with respect.

3. Experiences

Millennials want to feel they are involved with brands and marketers are offering Millennials the opportunity to co-create with them innovate, and participate in meaningful conversations drawing Millennials into the brand. Create experiences that are highly sharable, which means your brand love will be shared.

4. Influencers

We can’t talk about Millennials without talking about influencers. A large majority of this group are influencers themselves—among their peers, co-workers, vast social networks and beyond. This group is inspired by people they know in person or online and influencers they can relate to. In fact, 84% of Millennials say user-generated content has at least some influence on what they buy, and 73% say it’s important to read others’ opinions before purchasing, according to Bazaarvoice.

5. Listen up

The amazing thing about marketing to Millennials is that are quick to tell you what they love and hate about your brands. Those who are listening have tweaked products, developed new ones, staved off landslides of negative social backlash and many other positives benefits for the brand.

Source: Patty Odell for Chief Marketer
Photo Source: Matthew Hurst