Because coffee is a mature market, dollar sales growth is driven by consumers paying higher prices for coffee products. Four main factors are behind higher prices: rising prices for "green" (raw) coffee beans that have been passed along the entire distribution chain; the "premiumization"
The Food Institute (Saddle River, NJ, www.foodinstitute.com)
According to David Sprinkle, publisher of Packaged Facts, a September 2011 survey conducted for the report found that 21% of households that make coffee (other than instant) at home own an electric single-cup coffeemaker (based on formats such as pods, K-Cups, or T-Discs), and 18% use it regularly.
Although the single-cup market in the U.S. is dominated by Green Mountain Coffee Roasters with its proprietary Keurig K-Cup brewing system, growth in the category has attracted a growing range of participants. In the past year, Dunkin' Donuts and Starbucks have launched single-cup coffee formats, making Peet's the only major coffee brand that does not yet have a single-cup presentation.
With the continued premiumization of coffee over the past decade, many new packaged coffee products introduced over the past five years have been positioned as "upscale," which was the top package tag for new coffee products introduced from 2006 through 2010, according to data from Product Launch Analytics, a Datamonitor service.
During 2011, however, private-label coffee introductions came to the fore, with new coffee lines or extended offerings pouring in from retailers as diverse as A&P, Dollar General, Trader Joe's, and Wegmans, in keeping with the surging importance of store brands across packaged food and beverage categories.
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