U.S. LIQUID COFFEE FOR FOODSERVICE APPLICATION MARKET ANALYSIS

The U.S. liquid coffee for foodservice application market is projected to surpass US$ 21.9 Mn by the end of 2030, and is expected to exhibit a CAGR of 4.8% during the forecast period (2023 to 2030).

U.S. Liquid Coffee for Foodservice Application Market: Growth Drivers

• Increasing Demand for Coffee Pods & Capsules: Coffee capsules are easy to make for a single cup of coffee as they are ready-to-use sachets. These coffee capsules also do not lose aroma, intensity, or flavor once opened, as they are packed in air-sealed small packets and are opted for as single-use items. Along with this, coffee capsules simplify the coffee making process by permitting consumers to insert the preferred flavor capsule into the coffee machine and press the button. The increased demand for coffee capsules can be attributed to changing lifestyles and the prevalence of specialty coffee capsules in the market. Non-alcoholic beverages such as RTD coffee and tea, carbonated soft drinks, bottled water, and fruit juices have gained popularity in the past few years. This demand is expected to rise due to increased health awareness and urbanization. As the desire for instant non-alcoholic drinks has increased, coffee capsules have seen widespread acceptance. Due to their versatility, ease of use, and compatibility with a wide range of coffee items and equipment, coffee makers favor capsules. For instance, in July 2021, NEXE, a Canada-based packaging solutions supplier, launched its wholly compostable premium coffee pods in the U.S. and Canada. These sustainable coffee pods are compatible with Nespresso Original Line machines and are manufactured and packaged in NEXE's operations plant. The flavorful and rich dark roast espresso is packaged for coffee purists in sustainable coffee pods.
• Growing Demand for RTD Coffee Products to Boost Market Growth: The rising popularity of "cafe culture" has brought light to ready-to-drink coffee in the U.S. coffee marketplace, as ready-to-drink coffee is a prime source of instant energy and is becoming more popular amongst the middle-aged working population and young adults. To attract the consumers, market players are launching various new products on the market. For instance, in April 2022, Lavazza, an Italian coffee giant, entered the U.S. ready-to-drink coffee market with its recent launch of coffee products, which include Classic Cold Brew, Nitro Cold Brew, Cappuccino Cold Brew with milk, and Double Shot Cold Brew with oat milk. The company expanded its offerings in the rapidly growing category renowned for on-the-go consumers.

Figure 1. U.S. Liquid Coffee for Foodservice Application Market, Revenue Share (%), by Coffee Type, in 2022

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U.S. Liquid Coffee for Foodservice Application Market: Restraints

• Fluctuations in Raw Material Prices to Hinder the Demand for Coffee Products: Several factors, including production costs, marketing and advertising costs, the cost of raw materials, and shipping and distribution costs, increase the final cost of coffee. Raw material costs are one of the significant factors determining the final cost of liquid coffee. Coffee bean prices, for example, are likely to fluctuate enormously depending on weather conditions and international demand. Distribution and shipping costs play a vital role in the final cost of coffee, as coffee beans need to be shipped from coffee-producing countries to coffee-consuming countries. Production costs such as equipment and labor also influence coffee prices. Lastly, marketing and advertising costs are likely to drive up coffee costs, as coffee-producing companies spend significant amounts of capital on promoting and marketing their products. For Instance, 2021, According to the United States Department of Agriculture (USDA), the average ground coffee prices for the first eight months of 2022 were 21.9% higher compared to the same time in 2021. Coffee prices rose slower for sugar (11.05%) and milk (15.9%) than coffee for those same months.

U.S. Liquid Coffee for Foodservice Application Market: Market opportunities

• Companies operating in the liquid coffee market are focused on various strategies, such as partnerships and collaborations, in order to increase their presence in the market. For instance, in March 2021, J. M. Smucker Company (a U.S.-based manufacturer of jam, peanut butter, jelly, fruit syrups, beverages, shortening, ice cream toppings, and other products) entered into a partnership with JDE Peet's (a global coffee and tea company), which will allow JDE Peet’s to support the Smucker’s Away From Home liquid coffee business with product development, production, and foodservice equipment innovation. The partnership will allow J.M. Smucker to bring new innovations to liquid coffee segment that will enhance its current product portfolio and drive liquid coffee segment growth. JDE Peet’s proprietary liquid coffee system delivers large quantities of premium coffee, making it the perfect solution for hospitals, universities, hotels, conference centers, and other out-of-home customers.

U.S. Liquid Coffee for Foodservice Application Market: Trends

• Hot coffee is the most preferred choice among U.S. consumers. However, Cold-brew coffee is becoming more popular, particularly among younger coffee lovers. For instance, according to Coherent Market Insights’ analysis, among coffee drink types, cold brew coffee is the fastest-growing beverage. More people are looking for new experiences that they cannot replicate at homes, which has led to an increasing demand for cold-brewed coffee. Moreover, according to NCA’s Coffee Data Trends 2020, one in five people in the U.S. already consumes cold brewed coffee regularly. Furthermore, according to the same source, word-of-mouth is spreading, and the survey shows that 58% of consumers are ‘aware but not currently drinking cold brew’ and 41% perceive cold brew as ‘cool and trendy’.

U.S. Liquid Coffee for Foodservice Application Market: Impact of Covid 19

• The coronavirus (COVID-19) has majorly impacted the food and beverage industry and, in turn, has changed the dynamics of the entire ecosystem. During the early days of the pandemic (between March and May 2020), Americans prioritized staying home in order to prevent the spread of COVID-19. Non-essential services, including restaurants, bars, cafes, and coffee shops, were closed across the country or were operating at a much reduced capacity. Schools and colleges across the nation have shifted to virtual classes. Several people adopted working from home, which resulted in consumers not visiting out-of-home venues as frequently vs. pre-COVID. This is projected to have a long-lasting impact on out-of-home coffee consumption.

Figure 2. U.S. Liquid Coffee for Foodservice Application Market, Revenue Share (%), by Serving Type, in 2022

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U.S. Liquid Coffee for Foodservice Application Market: Market Segmentation

• Among coffee type, the cappuccino segment held a dominant position in the market and accounted for 33.7% share in the U.S. liquid coffee for foodservice application market in 2022.

U.S. Liquid Coffee for Foodservice Application Market: By Serving Type

• Among serving type, the hot coffee segment held a dominant position in the market and accounted for 63.90% share in the U.S. liquid coffee for foodservice application market in 2022.

U.S. Liquid Coffee for Foodservice Application Market: Recent Developments

• In July 2022, Keurig Dr. Pepper announced the launch of Intelligentsia K-Cup pods for its Keurig brewing system to capitalize on the growing demand for specialty coffee in the United States. Intelligentsia K-Cups are available in two flavors: House and Organic El Gallo, and can be purchased for 90 cents per pod in a 60-count box from Keurig.com.
• In April 2021, plant experts created a new generation of low-carbon coffee varieties. The two new Robusta species produce up to 50% more yields per tree than regular variations. Because more coffee can be produced with the same amount of land, fertilizer, and energy, the CO2e (carbon dioxide equivalent) footprint of green coffee beans can be reduced by up to 30%.
• July 2022, Keurig, Bold Coffee, and BLK partnered with the new K-Cup Pod. This partnership agreement made the significant black-owned coffee brand available to 36 million households along with a Keurig brewing system.
• February 2021, Finlays started to offer cold-brew soluble coffee. The company introduced its cold-brew soluble coffee in 2021. It is available to consumers at national retail stores and food service chains and is consumed by all age groups, from baby boomers to Gen Z.

U.S. Liquid Coffee for Foodservice Application Market: Key Companies

Major players operating in U.S. liquid coffee for foodservice application market include Café Amazon, Café du Monde, Caffè Nero, Coffee Beanery, Costa Coffee, Dunkin'Donuts LLC, Four Barrel Coffee, Gloria Jean’s Coffees, McCafé USA, and Starbucks Corporation.

*Definition: The coffee industry is a massive global business. Coffee has various possible health benefits due to its high caffeine content, and it is known to have a psychoactive ‘effect. Coffee in the food service industry has been around for a while, but due to the introduction of new coffee flavors into the market in recent years, it has exploded in popularity.