The coffee category is behaving as if it has had one cup too many, judging by the amount of activity that has been brewing.
Consumers have become much more knowledgeable and discerning about the coffee they buy, leading brands to focus on key attributes around sustainability, quality, country of origin, and others, such as coffee grown using regenerative farming practices.
After many consumers became more adept at brewing their own coffee during the pandemic, the trend persisted and continues to impact the category, said Stephanie Truscott, executive leader in
grocery at Austin, Texas-based Whole Foods Market.
“Consumers have many different ways to brew their coffee at home now and are looking for high-quality coffee to enhance their experience,” she said. “This is why whole bean continues to see significant growth, allowing a specific grind to the coffee that meets their needs.”
As more and more consumers have discovered a preference for coffee from specific regions of the world in the last few years, sales of single-origin coffees have increased as well, Truscott said.
Data from NIQ (formerly NielsenIQ) show that coffee overall has seen dollar sales growth at retail, although unit volumes of various subcategories have been mixed. For the 52 weeks through Sept. 30, total dollar sales of national brand coffee were up 5.6% vs. a year ago, while units fell 3.3%. Private label fared slightly better, with dollar sales growth of 8.4% and units down only 0.6%.
Espresso has been a category leader, with national brand dollar sales up 25% and units up 14.6%. National brand espresso pods were up 35% in dollars and 33.2% in units, according to NIQ.
Adding a new level of responsible sourcing
Whole Foods recently expanded its Sourced for Good program to include 13 blends of Whole Foods Market brand coffee. Requirements for the seal go beyond the third-party certification for sourcing from either Rainforest Alliance or Fair Trade that are already in place. Previously, the Sourced for Good seal was only used in the produce and floral categories, the company said.
Truscott said the seal indicates the retailers’ commitment to responsible sourcing by requiring third-party certification, providing tangible improvements in farmworkers’ lives, strengthening worker communities where products are sourced, and promoting environmental stewardship where crops are grown.
“Funds from Sourced for Good products are able to provide things like improved wages, health care, and student scholarships, but also can support things like planting trees to prevent erosion,” she said.
Whole Foods also partners with brands focused on regenerative agriculture, such as Groundwork Coffee, which recently launched Regenerative Organic Certified (ROC) coffee at the chain.
‘Coffee with a cause’
Tristan Ambrose, a merchandiser at Seattle-based PCC Community Markets, said PCC customers tend to prefer products that have a mission or purpose, which she said includes “coffee with a cause.”
“That encompasses coffee that is certified organic, or B Corporation certified, shade-grown coffee that has more ecological benefits, and packaging that is fully biodegradable — even with biodegradable degassing valves,” she said.
Truscott agreed that sustainability in both sourcing and packaging are important to customers of Whole Foods as well.
“There is a need for all brands to look at packaging and determine how to maintain the integrity of the coffee, but find more sustainable packaging while doing it,” she said.
Ambrose also cited another certification, Fair for Life, which goes beyond being fair trade by requiring ethical working conditions along the entire supply chain.
To commemorate its 70th anniversary, PCC recently launched a special coffee blend in partnership with local roaster Tony’s Coffee, a longtime supplier of PCC’s private label coffee beans. Tony’s shares PCC’s view on taking innovative action on climate issues, Ambrose said. The blend, called Terra Nova, features certified organic, fairly traded beans from Nicaragua and Peru.
For each bag sold, 50 cents goes to the Washington Farmland Trust, and another 50 cents to World Coffee Research, an organization that helps small-scale coffee farmers adapt to climate change.
Shelley Straume, another member of PCC’s grocery merchandising team, said sales of the 70th anniversary coffee started strong, with about 25% sold in the first couple of weeks.
Overall coffee sales have risen 2% year-to-date, compared with last year, she said.
Beyond the coffee partnership with Tony’s, PCC also carries beans from other Pacific Northwest roasters, including Ladro, Stumptown, and Caffe Vita.
“PCC is focusing on local, organic and fair-trade coffees due to our standards,” said Straume, noting that the retailer has also recently added Pachamama Coffee, a cooperative that is 100% farmer-owned.
“It will be a nice addition as it aligns with our values,” she said.
Growing like mushrooms
Last year PCC also became the exclusive retailer for the first-ever line of certified organic adaptogenic mushroom-infused coffees from Seattle-based Wunderground Coffee.
“There is a lot of curiosity around adaptogenic mushrooms right now, especially in the coffee realm,” said Ambrose, who said the partnership had a very strong launch and that customer feedback has been positive.
“Shoppers are intrigued by the mental and physical benefits of adaptogenic mushrooms,” she said.
Truscott said Whole Foods has also seen ongoing consumer interest in mushroom coffee, and has had a partnership with supplier Four Sigmatic for several years.
“People are looking for benefits in a variety of beverages, and that trend enters the coffee aisle as well,” she said.
Another growing segment within the category is coffee from Robusta beans, which have long taken a back seat to arabica beans, even though Robusta coffee plants are heartier and have more caffeine. Arabica is generally considered to yield better-tasting coffee, although Robusta enthusiasts have gained some traction, thanks to the popularity of Vietnamese coffee.
“Robusta is definitely receiving more interest as the industry looks towards the future of coffee production, and brands like Nguyen [Coffee Supply] in our ready-to-drink beverage sets are doing incredible work to educate consumers and bring high-quality Robusta coffees to consumers,” said Truscott.