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The U.S. retail market for coffee and tea is a $10 billion business in the throes of change. This study comprehensively examines the evolutionary dynamics at work in the coffee and tea market, providing a quantitative evaluation of factors in growth and decline, mass/specialty interaction, and increasingly rapid innovation. Major marketers are profiled including Procter & Gamble, Philip Morris/Kraft, Nestle, Lipton, Tetley, Celestial Seasonings, and Starbucks and influential minor players are discussed, all with a focus on their competitive responses to change. Also provided are detailed listings of new products, an assessment of innovative trends, and complete consumer profiles of coffee and tea drinkers.

Additional Information

Scope and Methodology

Market Parameters

This study examines the U.S. retail market for two interrelated types of bever-ages: coffee and tea. Included within its scope are all coffee and tea beverage prod-ucts sold at retail through mass and specialty outlets for at-home consumption. Not included within the scope of this study are coffee/tea products sold through non- or extra-retail channels of distribution—primarily foodservice, commer-cial, and institutional outlets (restaurants, offices, hotels, airlines, schools, vending, and so forth). As a rule, coffee and tea purveyed through these channels are sold to the consumer “by the cup” expressly for away-from-home imbibing.

Study Methodology

The information contained in this study was compiled from both primary and secondary sources. Primary research took the forms of consultation with industry ex-perts and on-site inspections of the major retail outlets. Secondary research entailed analysis and synthesis of a vast range of information collected from the industry-dedicated trade press, coffee and tea trade associations, government documents, retail journals, marketer publications and press releases, and other relevant sources. Sales figures are based on a comprehensive evaluation of various current market estimates and growth trends as put forth in the trade literature, as well as specific reliance for mass market sales on Information Resources, Inc. (IRI), the most prominent and comprehensive U.S. source for data on sales through food, drug, and mass merchan-diser stores. Our analysis of consumer demographics is based on data supplied by Simmons Market Research Bureau for 1998.

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