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The Coffee Grind |
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It's a grind these days for the biggest makers of grocery-store coffee. Procter & Gamble and Kraft Foods are facing sluggish sales for their hallmark Folgers and Maxwell House brews—and the demographics are moving against them. Gen Y'ers drink far less coffee than their baby boomer parents, and, when they do, it's more likely to be on the go.
Only 37% of young adults between 18 to 24 drink coffee, compared with 60% for those between 40 and 59 and 74% for Americans over 60, according to National Coffee Association. Coffee is still a growing market. Overall consumption rose by 9% a year between 2001 and 2006. The problem for P&G and Kraft is that their supermarket brands no longer cut it with consumers who have gotten hooked on the darker, richer brews from Starbucks, Dunkin' Donuts, and even McDonald's. Growth in coffee is coming from coffee on the run. Coffee sold through restaurants grew at a compound annual growth rate of 15.2% between 2001 and 2006. Supermarket sales grew only marginally and are slated to grow at a compound annual growth rate of 1% through 2011.
The most expensive cup of coffee, in the minds of many coffee drinkers, is a $4 coffee at Starbucks. Perhaps a half-caf soy almond latte prepared by a favorite barista. But for serious coffee connoisseurs, people who are looking for a world-class drink rather than a "gourmet" cup, the top fare is made from the highest-quality beans in the world. The beans come from very specific regions and are prized for their unique characteristics. Cultivated on small farms, they are coddled by farmers who care more about quality than quantity.
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