Specialty Coffee is Resilient

Amid so much uncertainty, there seems to be one certainty — specialty coffee consumption remains strong in a high inflationary environment, which should bring some confidence – and some relief – to the thousands of coffee professionals from around the world who will converge in Portland, Oregon this weekend for the Specialty Coffee Association (SCA) Expo.

The 2023 SCA Expo kicks off tonight with a welcome reception and runs through April 23rd (the show floor opens on the 21st). The annual event – the biggest specialty coffee show in the world – is ‘Disneyland’ for specialty coffee enthusiasts, connoisseurs and professionals, focusing on espresso, espresso-blended beverages, specialty ‘graded’ coffee, cold brew and nitro cold brew.

The specialty coffee industry has grown tremendously over the past 15 years. In her presentation, Specialty Coffee on the Rebound, at the NCA Convention in March, Megan Rankin of market research firm, Dig Insights, noted that in 2008, 34% of consumers (in the US) drank specialty coffee. In 2023, in the US alone, that number has grown to 52%. ‘Specialty coffee’ in 2008 included espresso, cappuccino, latte, café mocha, traditional specialty coffee and frozen blended coffee. Today, she pointed out that ‘specialty coffee’ also includes caffè Americano, macchiato, flat white, cold brew coffee and nitro cold brew.

The National Coffee Association (NCA) of the USA’s Spring 2023 NCDT Study reveals that younger Americans, non-Caucasians drive consumption of espresso-based beverages. The strength of the broader specialty coffee category is driven by those under 40 years with the 25 -39 demo driving espresso -based beverage consumption. According to the study, those under 40 also have a stronger propensity to consume cold coffee beverages, suggesting the category’s growth of cold coffee should target a younger demographic. Furthermore, consumers who identify as Hispanic-, African- and Asian-Americans are also more likely than Caucasian-Americans to be specialty drinkers. About 49% of Caucasian-Americans had a specialty coffee beverage in the past week — this percentage increases among the other three ethnic groups tracked in the NCDT.

So, despite the high inflationary environment, specialty coffee is showing resilience. According to the NCA’s Specialty Coffee Report, which is part of its Spring NCDT (National Coffee Data Trends) Study, although broader consumer trends suggest that many are and will be cutting back on discretionary expenses, the specialty coffee consumer is still happily buying specialty coffee. For example, in January 2023, just over four-in-ten Americans aged 18+ had at least one cup of specialty coffee yesterday. This is driven by espresso-based beverages, which are also sustaining at high levels.

In terms of purchasing behaviour, the NCA’s Specialty Coffee report reveals that there is evidence to suggest some specialty consumers are ‘buying in bulk’ to save money in the face of inflation, but not all are cutting back. In fact, per the findings, there are more specialty coffee drinkers agreeing to the statement ‘I’ve tried making the coffees I buy out-of-home but it doesn’t taste the same’ — an indication that while coffee preparation in-home provides cost savings, there are some coffee beverages that are better out-of-home.

Supporting this finding, in her presentation, Rankin explained that 40% of specialty coffee drinkers purchase coffee out-of-home versus 23% of traditional coffee drinkers, while 77% of specialty coffee drinkers prepare coffee at-home versus 89% of traditional coffee drinkers.

So, although the possibility of a recession still looms and personal financial situations may be gloomy, specialty coffee is proving to be quite resilient, hence, the outlook is positive.

For a ‘sneak peek’ at some of the companies exhibiting at the SCA Expo, see: SCA Expo, Interpack and PLMA’s World of Private Label exhibitor preview – Tea & Coffee Trade Journal (teaandcoffee.net).

Safe travels to Portland! Come visit T&CTJ at booth #1820 and grab a copy of our latest issue!

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