Ready-to-Drink Coffee: The Market We Are In Is ‘On Fire’

Coffee sure is hot these days, if media coverage is any indication. Hardly a day goes by without news about what some national roaster or retailer is doing to increase coffee sales. Consumption is growing. Variety is increasing. Prices are rising, but consumers don’t seem to mind.

The Beverage Marketing Corp., which studies beverage trends, has reported that coffee is among the liquid refreshments with sales growing in double digits while soda, long the nation’s dominant refreshment, declines.

One thing that should be foremost in our minds is that work place coffee is no longer associated with poor quality.

CONSUMER PERCEPTIONS CHANGE

Two and a half years ago, the National Automatic Merchandising Association released a survey quantifying the fact that only a minority of OCS consumers believed office coffee was the same quality as coffee they could get elsewhere.

Many coffee drinkers made it a point to stop for coffee on the way to work because the coffee in the office was perceived as lousy.

A lot of progress has been made since then. OCS operators have responded to the need for better quality products and delivery systems.

If a survey were held today, it’s a good bet coffee drinkers would give work place coffee higher ratings.

OCS Is Part Of The ‘RTD’ Market

Operators need to understand that the market they play in – the ready-to-drink coffee market – is growing. According to the Mintel Group, ready-to-drink coffee sales soared in the last 5-year period, vastly outpacing ground, whole bean and instant coffee. The trend is expected to continue for at least another five years.

Signs of the improvement in ready-to-drink coffee are everywhere.

McDonald’s is so committed to its new coffee program that it is offering to cover 40 percent of its franchisees’ investment in the program. Not content with this upgrade, it also announced plans to add specialty coffee bars in its restaurants.

The New Jersey Devils recently announced an official coffee: Quick Chek, a local convenience store chain.

These moves present both challenge and opportunity for OCS operators.

Those operators responding to the challenge, such as Classic Coffee Systems Ltd. of Valley Stream, N.Y., profiled on page 32, are reaping the rewards.

Two years ago, I declared that it was “do or die” time for OCS operators, due to retail coffee competition. That February 2006 issue profiled Chris Nachtrieb of Chris’ Coffee Service, Albany, N.Y. I heralded him as an operator who knows what it means to invest in tools, technology and employees.

Work Place Coffee Holds Its Own

Recent statistics indicate Chis Nachtrieb isn’t alone in meeting the challenge. The Mintel Group found that as of August, 2007, coffee drinkers got their coffee at work more than anywhere else, save the home (83 percent) and the coffee house (40 percent). The work place, at 31 percent, held its own against fast food restaurants, convenience stores, donut shops and gas stations.

Certainly there is more progress to be made, and OCS operators can’t rest on their laurels.

But congratulations are in order for the roasters and brewing system providers who have given OCS operators the tools to meet the challenge. And to the operators who are doing it.

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