The hot business of coffee

Sept. 8, 2014
The number of coffee addicts is increasing, but they are still price conscious about their artistically roasted specialty-grade beans.

Ah…coffee. I was a late follower to this warm, caffeinated morning (afternoon and evening) ritual. But once I joined in, I haven’t looked back, except maybe with pity on those who don’t partake. And I, like most consumers, try to balance my increasingly discerning coffee tastes with how much my wallet can bare. Now more than ever before, consumers know about coffee and are daily drinkers. The evidence is everywhere - the new trend in roasters, the addition of coffee in more quick serve restaurants, statistics from multiple organizations and positive growth in the office coffee segment.

Third-wave and local

More local coffee shops are carrying local roasts manufactured in the backroom facility, or showcasing artisan roasters who don’t trust their brand to large foodservice companies. These roasters are looking for additional markets, creating the opportunity for OCS operators to become distributors, especially if the coffee has created a local following. The popularity of smaller roasters has also driven a more profitable single-cup opportunity with bean-to-cup systems and offered customers a premium cup of coffee. See how a Chicago, IL-operation used all of these ideas and more to broaden business and thrive in a tough urban market, on page 14.

QSR coffee goes national

Quick serve restaurants, most often known for their food, are now viewing coffee as a profit generating segment. recently reported that McDonald’s is counting on the popularity of its McCafé brand to drive coffee sales…outside restaurants. With the help of Kraft Foods, the McCafé coffee will be available in 12-ounce bags and on-demand single-cup packages in the U.S. starting in early 2015.

Another QSR restaurant, Chick-fil-A®, announced it will start serving specialty- grade coffee in restaurants using the standards of the Specialty Coffee Association of American (SCAA) – a designation met by only 10 percent of coffee worldwide, according to the annoucementannouncement. Chick-fil-A is partnering with THRIVE Farmers™ Coffee to introduce the chain’s exclusive coffee blend. Its iced coffee is also getting an upgrade, prepared with an exclusive blend of THRIVE Farmers’ cold-brew as well as fresh two percent milk and sweetened with pure cane syrup.

Fun facts

The National Coffee Association reports strong coffee drinking habits among U.S. adults, page xx, as does the SCAA. Even organizations geared more toward consumer spending recognize coffee as an important trend. Money Level, an app that helps smartphone users see how much money they can spend, recently published a report on what Millennials are purchasing. In Maine, an average of $300 a year per Millennial is spent on coffee purchases. Massachusetts and New Hampshire come in second and third place. The Southeast states have the least, with West Virginia at $73 and Mississippi at $47 spent annually on coffee. These regional differences are likely part of the office coffee service story as well, as different regions saw different increases, overall. Regardless of the region, operators report positive growth in their coffee businesses. See what’s driving that OCS growth in the State of the Coffee Service Industry report on page 22.

Coffee is in a resurgence, if it ever really went down. It can be a pick me up, a status symbol and a way to make personal connections, not to mention a premium perk in the workplace. And as one OCS operator said to me, “It’s a great time to be in coffee.”