U.S. LIQUID COFFEE FOR FOODSERVICE APPLICATION MARKET ANALYSIS

Market Challenges And Opportunities

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

  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.