Article: Coffee Market to be Valued at $59 billion by 2012

2008-07-15 — Taking the lead over the soft drink industry for the first time, the coffee market (inclusive of both retail and foodservice sales) was valued at $44 billion in 2007. According to an updated study from Packaged Facts, “Coffee in the U.S.: Retail, Foodservice and Consumer Trends,” the coffee market will brew to an estimated $59 billion by 2012.

Foodservice venues are currently the largest channel for coffee sales, accounting for 87 percent of the market in 2007, while ground coffee dominates the retail category. Due to new economic constraints, Packaged Facts believes that sales of coffee through retail channels will grow at a faster pace than foodservice as more consumers exchange their favorite coffeehouse for packaged premium coffees they can brew at home.

Marketers and retailers competing against the foodservice segment have successfully introduced premium packaged versions of recognizable foodservice brands, such as Seattle’s Best, Starbucks, and Peet’s. 2008 figures, thus far, indicate that specialty coffee products represent 30 percent of retail market sales. Between consumers dusting off their home coffee makers and marketers expanding packaged offerings, the segment could eventually command 45 percent.

“The specialty coffee industry is at the forefront of offering ethical, eco-friendly products. Although this is a niche market, it is rapidly touching mainstream,” notes Tatjana Meerman, publisher of Packaged Facts. “For example, in April 2008, Wal-Mart launched a line of six premium packaged ground coffees that are either Fair Trade Certified, USDA Certified Organic, or Rainforest Alliance Certified.”