Make no mistake, coffee is big business: Packaged Facts forecasts that retail and foodservice sales of coffee will top $48 billion in 2014. Of this amount, we expect $11.2 billion (or 23%) to come from retail sales and $37 billion (or 77%) to come from sales at foodservice establishments.

1. Packaged Facts New Publication Brochure
Coffee and Ready-to-Drink Coffee in the U.S.:
Retail and Food Service, 8th Edition
Brought to you by:

2. REPORT ABSTRACT
Coffee is a big and hotly contested business, as evident by Mondelez International’s recent acquisition of D.E
Master Blenders 1753 BV, which closes the sales gap between Nestle SA and Mondelez as world’s first- and
second-ranked coffee manufacturers by sales.
For the U.S. market, Packaged Facts forecasts that retail and foodservice sales of coffee will top $48 billion in
2014. Of this amount, we expect $1.2 billion (or 23%) to come from retail sales and $39.1 billion (or 77%) to come
from sales at foodservice establishments.
For coffeehouse and quick-service restaurant operators, attaching food to the purchase of coffee is more
important than ever. Brands are aggressively innovating on both the beverage and food side of the menu to
provide customers the ammunition needed for more pairing firepower. But more and more of these players are
also branching into other beverages, which has the potential to dampen coffee sales growth. And, yet despite
all the variety, hot coffee is still the go-to beverage, with 75% of coffee/coffee drink users saying that among
10 choices “hot coffee” is the coffee/coffee drink they drink most often. As restaurant operators race to launch
loyalty programs, coffeehouse chains are fertile ground for programs that blend and harness social media, mobile
technology and rewards. Our research suggests that coffeehouse users are receptive to social media and brand
interplay, and when it comes to adapting to technology, these consumers are also ahead of curve.
On the retail side, the rise of single-serve is changing the retail coffee landscape—and if Green Mountain Coffee
Roasters has its way—single serve will also change away-from-home coffee consumption. But coffee co-
branding is also moving beyond coffee shop brands to align with other indulgent brands. Building off coffeehouse
expectations for a wide variety of options, retail coffee manufacturers are also embracing variety, and sourcing
has become a key element in coffee premiumization. And innovation abounds: To combat attrition, instant
coffee marketers are trying to breathe life into the category focusing on quality products underscored by variety,
functional, and value positioning.

3. REPORT ABSTRACT
And this only scratches the surface.
Coffee and Ready-to-Drink Coffee in the U.S.: Retail and Food Service provides industry participants with
valuable insight on trends shaping this the highly competitive U.S. coffee market. Sales content includes: 1)
a market size and forecast for coffee sales at retail and foodservice, along with retail sales analysis by coffee
segment and by distribution channel; and 2) detailed company analysis of the retail coffee market, by market
segment (ground/whole bean, instant, instant flavored, espresso/cappuccino, and ready-to-drink coffee) and by
brand; and 3) detailed company analysis of leading foodservice participants, including Dunkin’ Donuts, Green
Mountain Coffee Roasters, McDonald’s, Starbucks, Caribou Coffee and Tim Hortons, with a focus on how coffee
fits into each companies’ competitive and growth strategies.
The report also:
• Identifies key marketing opportunities for coffee, supported by consumer survey data, product
examples and other metrics. In particular, we focus on food and beverage pairing, organic growth
opportunities, growing sales of iconic retail brands, and harnessing loyalty programs.
• Using proprietary survey results, assesses the degree which consumers get different coffee types
for home use from different retail distribution channels; similarly, we assess the degree they get
coffee for “immediate consumption” from a variety of foodservice channels. Comparative
analysis is included.
• Explores coffee retail product trends centered on bringing the coffee shop experience into the
consumers’ home (with an emphasis on co-branding); sourcing; convenience; and instant coffee,
liquid concentrate and single-serve pod innovation.
• Assesses coffee menu trends, focusing on menu item penetration by restaurant segment, including
beverage varieties, coffee flavors/types and coffee brands.

4. REPORT ABSTRACT
• Assesses household and personal coffee usage and usage frequency trends, including ground, whole bean,
single-serve/pod, instant and RTD coffee; and household and personal coffee brand usage and trends,
ground, whole bean, single-serve/pod, instant and RTD coffee. To help gauge brand loyalty, we also trend
brands’ “usage preference ratios,” the ratio that consumers drink that brand “most” over drinking that brand
“also.”
• Using proprietary survey results, provides comparative analysis on the degree to which consumers drink
different flavors and types of coffee at home and at restaurants, as well as identifying which coffee types/
flavors consumers drink most often.
• Drawing from consumer survey “ranking” responses, identifies the relative importance consumers place on
factors such as taste, getting a specific brand, low price, and time of day when deciding to order coffee at a
restaurant.

5. SAMPLE INSIGHTS & HIGHLIGHTS
• The grocery channel continues to reign as the retail coffee sales champion, with an estimated
$5.26 billion in 2013 sales.
• In 2013, total IRI-based multi-channel sales of coffee were up 6% from 2012.
• We expect coffee sales at foodservice establishments to increase steadily during 2014-2016, driving
incremental growth in foodservice establishment visits, continued breakfast platform build outs and
improvements where coffee continues to play a central role, and pricing increases driven by further transition
to “premium” coffee as well as increasing coffee drink variety.
• Nearly 61% of all households use ground or whole bean coffee in 2013.
• While innovation is an integral factor in keeping consumers engaged, opportunities for organic growth will be
achieved by increasing replenishment cycles, developing new usage opportunities, and increasing price per
cup. In this regard, marketers can leverage the social experience that goes along with coffee as a lifestyle
beverage. The industry can also continue to expand beyond the morning daypart to develop new usage
opportunities, as well as harness coffee’s positive health attributes in tandem with functional positioning.
• A driving factor in retail coffee innovation and marketing is bringing the coffee shop experience into the
consumers’ home by utilizing familiar brands, an abundance of variety, and high-quality retail products.
• Co-branding of retail coffee goes beyond coffee shop brands to align with other indulgent brands. Such
partnerships create brand recognition and cross-merchandising opportunities. The bold, rich flavor of coffee
provides a natural balance to indulgent sweet notes—making partnerships with decadent, palette-pleasing
brands a natural fit.

6. SAMPLE INSIGHTS & HIGHLIGHTS
Coffee Drunk Most, by Coffee Typle/Flavor
Which type of coffee do you drink most often?
Hot Coffee
0% 10% 20% 30% 40% 50% 60% 70% 80%
75%
15%
15%
13%
10%
7%
5%
3%
6%
Base: 1,468 adults age 18+ who have drunk coffee in the past month; respondents were allowed to pick up to
three of the listed choices.
Source: Packaged Facts, based on data from February 2014 Packaged Facts proprietary survey results
Iced Coffee
Latte
Cappuccino
Blended Ice
Coffee Drink
Espresso
Macchiatto
Cafe au Lait
Other

7. SAMPLE INSIGHTS & HIGHLIGHTS
Factors Influencing Decision to Order Type of Coffee at Restaurant, Ranked by Importance
When deciding what kind of coffee/coffee drink to get at a restaurant, which of the following infuence your decision?
For each response, please use a scale of 1 to 5, where 1 = “not at all important” and 5 = “very important.”)
Great Taste
Time of Day
Specific Flavor
Meal Time
Caffeine/Energy
Low Price
Pairs with Food
Speedy Service
Specific Brand
Trying Something New
Healthfulness
2.5 3.0 3.5 4.0 4.5
4.52
3.67
3.63
3.62
3.54
3.34
3.26
3.24
2.99
2.97
2.96

8. SAMPLE INSIGHTS & HIGHLIGHTS
• The premiumization trend is alive and well as evident in the significant growth of organic, house blend,
premium, fair trade, and Ethiopia coffees from 2009-2013. These types of coffees are gaining traction because
they communicate “quality.”
• Sourcing has become a key element in coffee premiumization.
• Ready-to-drink coffee beverages exploit the convenience factor by simply removing the need for a brewer.
These grab-and-go beverages capture impulse and immediate consumption opportunities with single-serve
product placement at beverage coolers, but also allow for multiple-serve product usage at home.
• Instant coffee marketers are trying to breathe life into the category with innovations that focus on quality
products underscored by variety, functional, and value positioning. Liquid concentrates are emerging in the
category.
• Iced coffee is most prevalent among midscale restaurant operators. Iced coffee beverages offer a good
opportunity for these operators to broaden coffee beverage consumption across all dayparts. Moreover, there’s
opportunity to communicate premium quality with customized flavor opportunities.
• The 18-29 demographic shows a preference for coffeehouse brands, such as Starbucks. This youngest set
of coffee drinkers also over index in use of Gevalia ground/whole bean coffee, which could be due to the
company’s strong Internet presence and direct-to-consumer home delivery service.
• Hispanic households are 11% more likely than average to drink coffee.
• Some 9% of monthly coffee drinkers use the mail/Internet to purchase single-serve/pod coffee, where they can
shop most conveniently to obtain competitive pricing on an easy-to-ship and easy-to-receive single-serve/pod
coffee brands.

9. SAMPLE INSIGHTS & HIGHLIGHTS
Daily Coffee Drinkers: Cups of Coffee Drunk per Day
How many 8 oz. cups of coffee/coffee drinks do you usually drink per day?
4+ cups per day
3 cups per day
2 cups per day
1 cups per day
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
19%
34%
20%
26%

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