• Markets Analyzed
• Differences in Analysis From 2003 Report
• Products Outside of Scope
• Report Methodology
• The Products
  • Three Primary Categories
  • Term “Specialty” Gets More Specific
  • Additional Descriptors
  
  
• Size and Growth of Market
  • 2005 Sales Ring in at a Whopping $34.5 Billion
  • Sales to Approach $48 Billion by 2010
  • Table 1-1 U.S. Sales of Coffee, 2000-2010 (in millions of dollars)
  • Foodservice Is Largest Coffee Sales Channel
  • Figure 1-1 Total U.S. Sales of Coffee by Market, 2005
  • Retail Is a Very Dynamic Channel
  • Table 1-2 U.S. Retail Sales of Coffee, 2005 (in millions of dollars)
  • Half of Foodservice Coffee Is Regular Old Joe—That Will Change
  • Table 1-3 U.S. Foodservice Sales of Coffee, 2005 (in millions of dollars)
  • Factors Affecting Market Growth
  • The Greatest Potential for Market Growth Is Coffee as Medicine
  • Campaign Raises Awareness, and May Lead to Sales Increases
  
  
• The Marketers
  • Complex International Structure
  • Marketers Are the Focus of This Study
  • Size and Scope of Marketers
  • Competitive Situation
  • A Crowded Supermarket Aisle
  • On-the-Fly Coffee
  • Sustainable Coffees’ Popularity Increasing Fast
  • Market Leaders Are Big Spenders
  • Trade Advertisement Is Strong for Coffee
  
  
• Distribution and Sales
  • Retail Distribution Methods
  • Coffee House Distribution Methods
  • Supermarkets Claim Largest Retail Share
  • Table 1-4 Share of U.S. Retail Sales of Coffee by Retailer Type, 2005
  • Foodservice Sales Strongest in All Types of Restaurants
  • Table 1-5 Share of U.S. Foodservice Sales of Coffee by Venue, 2005
  
  
• The Consumer
  • Consumers Continue to Drink Coffee, Just a Bit Less
  • Simmons Consumer Survey
  • Table 1-6 Percent of Consumers Who Use Packaged Coffee for
  • Future Brewing or Mixing by Product Type, Brand, and Region,
  • May 2004-April 2005

Chapter 2 The Products

• Markets Analyzed
• Differences in Analysis From 2003 Report
• Products Outside of Scope
• Report Methodology
• Product Breakouts
  • Three Primary Categories
  • Term “Specialty” Gets More Specific
  • First Category: Coffee Packaged for Future Brewing or Mixing
  • Broken Into Six Sub-Categories
    • Ground Coffee
    • Whole Bean Coffee
    • Instant Coffee
    • Filter Packs for a Pot
    • Pods and Bags for a Cup
    
    
  • Specialty Instant Coffee Mixes
  • Second Category: Packaged Coffee Beverages (Ready-to-Drink)
  • Third Category: Freshly Brewed or Mixed for Immediate Consumption (Ready-to-Drink), or Intended for Immediate Consumption
  • Liquid Coffee Concentrate Requires Water
  • Foodservice Disguises Instant Cappuccino
  • Flavor Trends in Instant Cappuccino
  • Table 2-1 Flavors of Instant Cappuccino Available in the U.S. Marketplace, 2005
  • Additional Descriptors
    • Arabica versus Robusta.
    • Caffeine Content
    • Roast
    • Espresso
    • Flavors
    • Organic
    • Shade Grown
    • Fair Trade
    • Sustainably Grown
    
    
  • Where Does the Term Cappuccino Come From?
  • What Is Cappuccino?
  • What Is Caffé Latté?
  • The Science of Milk Froth
  • Dry Milk Ingredients to the Rescue
  • Another Foam Option
  • Move Over Brewer, Make Room for the Super-Automatic Machine
  • Innovations with Home Brewers
  • Proprietary Equates to Expensive
  • Two of the Firsts Are Still Likely Leaders in Single-Cup Brewers
  • Innovative, More Traditional Brewers
  • Frothing Technology Improves
  • A Different Type of Single-Cup Brewer
    • Table 2-2 U.S. Coffeemakers, Channels of Distribution and Annual Sales, 2005
    • Table 2-3 Amazon.com’s Top-10 Selling Coffeemakers, March 2004-March 2005
    
    
  • Cold Brewers Have Been Around Forever
  • Self-Service Espresso Bar Debuts
  • In-Home Roasters Enter the Scene

Chapter 3 The Market

• 2005 Sales Ring in at a Whopping $34.5 Billion
• Table 3-1 Total U.S. Sales of Coffee, 2000-2005 (in millions of dollars)
• Figure 3-1 Total U.S. Sales of Coffee, 2000-2005 (in millions of dollars)
• Differences in Analysis From 2003 Report
• Higher Coffee Prices Drive Dollar Sales Growth
• Table 3-2 Composite Green Coffee Prices, 2003-2005 (in cents per pound)
• Figure 3-2 Composite Green Coffee Prices, 2003-2005 (in cents per pound)
• Source: International Coffee Organization
• Figure 3-3 U.S Gross Domestic Product, 1998-2005 (percent increase)
• Consumers Are Spending More Money
• Retail Sales Include All Packaged Coffee for Future Use
• Table 3-3 Total U.S. Sales of Coffee by Market, 2000-2005 (in millions of dollars)
• Ready-to-Drink Packaged Coffee Is Small But Growing
• Table 3-4 Total U.S. Retail Sales of Coffee by Product Category, 2000-2005 (in millions of dollars)
• Table 3-5 Total U.S. Foodservice Sales of Coffee by Product Category, 2000-2005 (in millions of dollars)
• Ground Coffee Drives Retail Sales, But Most Likely It Is Specialty
• Table 3-6 U.S. Retail Sales of Packaged Coffee for Future Brewing or Mixing by Product, 2000-2005 (in millions of dollars)
• Ready-to-Drink Sales Peak at $413.9 Million
• Table 3-7 Total U.S. Sales of Ready-to-Drink Packaged Coffee Beverages by Market, 2000-2005 (in millions of dollars)
• Foodservice Sales Boom Because of Higher-Priced Products
• Table 3-8 U.S. Foodservice Sales of Coffee Freshly Brewed or Mixed for Immediate Consumption, or Available for Immediate Consumption by Product, 2000-2005 (in millions of dollars)
• Market Composition
  • Foodservice Is Largest Coffee Sales Channel
  • Figure 3-4 Total U.S. Sales of Coffee by Market, 2005
  • Retail Is a Very Dynamic Channel
  • Figure 3-5 U.S. Retail Share of Coffee Sales by Product, 2005
  • Decaffeinated Coffee Is Less Than One-Fourth of Business
  • Figure 3-6 U.S. Retail Sales of Ground Coffee by Caffeine Content, 2005
  • Figure 3-7 U.S. Retail Sales of Instant Coffee by Caffeine Content, 2005
  • Private Label Is Less Than 10% of Retail Coffee Sales
  • Figure 3-8 U.S. Retail Sales of Coffee: Branded vs. Private Label, 2005
  • Figure 3-9 U.S. Retail Sales of Ground Coffee: Branded vs. Private Label, 2005
  • Figure 3-10 U.S. Retail Sales of Whole Bean Coffee: Branded vs. Private Label, 2005
  • Figure 3-11 U.S. Retail Sales of Instant Coffee: Branded vs. Private Label, 2005
  • Half of Foodservice Coffee Is Regular Old Joe—That Will Change
  • Figure 3-12 U.S. Foodservice Share of Coffee Sales by Product, 2005
  • Lots of Room to Grow for Specialty Coffee
  • Figure 3-13 U.S. Retail Sales of Packaged Coffee for Future Brewing or Mixing: Specialty vs. Regular, 2005
  • Figure 3-14 U.S. Foodservice Sales of Coffee Freshly Brewed or Mixed for Immediate Consumption, or Available for Immediate Consumption: Specialty vs. Regular, 2005
  • Lots of Room to Grow for Specialty Coffee
  • Figure 3-15 U.S. Specialty Coffee Sales by Descriptor, 2005
  • Figure 3-16 U.S. Fair Trade Certified Coffee Brought Into the United States, 2004
  • Traditional Supermarket Is the Primary Sales Channel
  • Figure 3-17 U.S. Retail Sales of Coffee: Share of Dollar Sales by Retailer Type, 2005
  • Foodservice Sales Strongest in All Types of Restaurants
  • Figure 3-18 U.S. Foodservice Sales of Coffee: Share of Dollar Sales by Segment, 2005
  • Whole Bean Coffee More Popular in the West
  • Table 3-8 Regional Distribution Indices for Consumption of Packaged Coffee for Future Brewing or Mixing by Product Type, Brand, and Region, May 2004-April 2005
  
  
• Factors to Market Growth
  • Retail Market Simply a Shift to Higher-Priced Coffee
  • The Convenience of Pods Raises Consumer Awareness and Use
  • Growth Through Ethnic Coffee Introductions
  • Packaged Ready-to-Drink Coffees Continue to Attract New Users
  • Shelf-Stable Drinks Present Distribution Growth Opportunities
  • Going After Specific Consumers
  • Nutritional Niche
  • Freshly Brewed Drinks Boom with More Iced Offerings
  • And of Course, More Locations Equates to Increased Sales
  • Working with Chefs to Offer Signature Brews
  • And Finally . . . Coffee May Keep the Doctor Away
  • Debunking Old Myths Regarding Coffee’s Impact on Health
  • Campaign Raises Awareness, and May Lead to Sales Increases
  
  
• Projected Market Growth
  • Sales to Approach $48 Billion by 2010
  • Table 3-9 Projected Total U.S. Sales of Coffee, 2005-20010 (in millions of dollars)
  • More Foodservice Locations Translates to Increased Sales
  • Table 3-10 Projected Total U.S. Sales of Coffee by Market, 2005-2010 (in millions of dollars)
  • Ready-to-Drink Growth Shows Continued-Double-Digit Growth
  • Table 3-11 Projected Total U.S. Retail Sales of Coffee by Product Category, 2005-2010 (in millions of dollars)
  • Table 3-12 Projected Total U.S. Foodservice Sales of Coffee by Product Category, 2005-2010 (in millions of dollars)
  • Retail Growth Is Not From Any Instant Coffee Beverages
  • Table 3-13 Projected U.S. Retail Sales of Packaged Coffee for Future Brewing or Mixing by Product, 2005-2010 (in millions of dollars)
  • Table 3-14 Projected Total U.S. Sales of Ready-to-Drink Packaged Coffee Beverages by Market, 2005-2010 (in millions of dollars)
  • Specialty Coffee Drives Foodservice Growth
  • Americans Just Don’t Care for Instant Coffee
  • Table 3-15 Projected U.S. Foodservice Sales of Coffee Freshly Brewed or Mixed for Immediate Consumption, or Available for Immediate Consumption by Product, 2005-2010 (in millions of dollars)

Chapter 4 Market Dynamics

• Complex International Structure
• Marketers Are the Focus of This Study
• Size and Scope of Marketers
• Table 4-1 U.S. Retail Coffee: Select Marketers of Packaged Coffee Products by Brand and Product Type, 2006
• Retail Marketers of Packaged Coffee
  • Competitive Situation
  • A Bit on Sara Lee Getting Out of the U.S. Retail Coffee Market
  • A Crowded Supermarket Aisle
  • Distribution Agreements
  • How Dairies Get Involved
  • Refrigerated Business Is Rather Regional
  • Private Label Marketers
  
  
• Competitive Retail Overview
  • Retail Leaders of Coffee Packaged for Future Brewing or Mixing
  • Table 4-2 U.S. Mainstream Retail Sales of Coffee Packaged for Future Brewing or Mixing: Top-Five Marketer Sales and Share, 2005
  • (in millions of dollars)
  • Figure 4-1 U.S. Mainstream Retail Sales of Coffee Packaged for Future Brewing or Mixing: Top Marketer Share, 2005
  • Table 4-3 U.S. Mainstream Retail Sales of Coffee Packaged for Future Brewing or Mixing: Top-10 Brands(1) Sales and Share, 2005 (in millions of dollars)
  • Figure 4-2 U.S. Retail Sales of Coffee Packaged for Future Brewing or Mixing: Top Brands Share, 2005
  • Regular Ground Coffee Takes Up Most of the Shelf
  • Figure 4-3 U.S. Retail Sales of Ground Coffee: Top-Three Marketers by Share, 2005
  • Ground Decaf Is Small Business
  • Figure 4-4 U.S. Mainstream Retail Sales of Ground Decaffeinated Coffee: Top-Three Marketers by Share, 2005
  • The Up-and-Comer: Pods
  • Figure 4-5 U.S. Mainstream Retail Sales of Pods: Top-Three Marketers by Share, 2005
  • Instant Coffee Not Very Popular in the United States
  • Figure 4-6 U.S. Mainstream Retail Sales of Instant Coffee: Top-Three Marketers by Share, 2005
  • Whole Bean Marketers Are Many
  • Figure 4-7 U.S. Mainstream Retail Sales of Whole Bean Coffee—Regular and Decaffeinated: Top-10 Brands by Share, 2005
  • Source: Packaged Facts
  • No Need to Brew or Stop at a Café
  
  
• Foodservice Marketers of Freshly Brewed Coffee
  • Foodservice Is Largest Coffee Sales Channel
  • Coffee Houses on Every Corner
  • Learning From Starbucks
  • Expansion on the Menu for Dunkin’ Brands
  • Starbucks vs. Dunkin’ Donuts in New England
  • On Hortons and Coffee
  • Increase Supply, Demand Goes Up
  • Peet’s on a Major Expansion Plan in Its Own Backyard
  • Selling Beans vs. Brews
  • Other QSRs Perk Up Their Coffee Offerings
  • A Drive-Thru Brawl
  • Many Want In on the Drive-Thru Concept
  • A European Player Enters the States
  • So Does Another
  • Managing Unique Coffee Service Operations
  • Upgrading to Differentiate
  • Nothing Regular About Coffee These Days
  • Family-Owned Restaurants Invest in Coffee, Too
  • On Staying Independent
  • On Being a Micro-Roaster and Retailer
  • Number-One Coffee House Is Starbucks
  • Doughnut Giant Is Forefather of Specialty Coffee
  • Table 4-4 U.S. Quick-Service Restaurants with a Coffee Niche, Number of Units Worldwide, 2005
  • C-Store and Gas Station Coffee Programs Become Class Acts
  • Upscale Restaurants Offer Signature Brews
  • Flying Away With Satisfying Java
  • Hotel Coffee Programs Are No Longer an Amenity
  • Ethnic Coffee Marketers
  • A Little Bit of Hollywood in Your Brew
  • Company Overview
  • It’s All in the Extended Family
  • Investing in Future Growth
  • Company Overview
  • Innovators and Leaders, Here and Abroad
  • Business Abroad
  • No Wimps Allowed to Drink This Brew
  • Company Overview
  • Innovation Continues with Other Instant Beverage Mixes
  • Company Overview
  • Coffee Concentrate Is Big Business for BrewFresh
  • Company Overview
  • Atmosphere Differentiates Caribou From Starbucks
  • Financial Highlights and Store Count
  • Introducing 2006 Annual Financial Guidance
  • Long-Term Licensing Agreements Announced
  • Company Honors Employee with Cancer Research Donation
  
  
• Competitive Profile: The Coffee Beanery, Flushing, Michigan
  • Company Overview
  • Franchisees Really Get Into It
  • Company Overview
  • Manufacturing Product for Top Brands
  • North American Coffee Partnership
  
  
• Competitive Profile: Diedrich Coffee, Inc., Irvine, California
  • Company Overview
  • Cup of Excellence Program
  • News, Traffic, and More
  • California Location Gets a Drive-Thru
  • The New Years Starts Out with Some New Leaders
  
  
• Competitive Profile: Dunkin’ Brands, Inc., Canton, Massachusetts
  • Company Overview
  • About Dunkin’ Brands
  • Dunkin’ Donuts Coffee Recognized as Best Coffee in America
  • More Coffee, Less Donuts
  • First with Fair Trade Espresso
  • Blended Beverages Go Lite
  • Synergies in Quick Service
  • Company Overview
  • The Eight O’Clock Coffee Business
  • A&P Exits the Coffee Business
  • Company Overview
  • Brewing One Cup at a Time
  • Well Poised for Growth
  • Environmentally and Socially Responsible
  • Flavors Must Be of the Highest Quality
  • Then There’s Coffee Soda
  
  
• Competitive Profile: Java City, Inc., Sacramento, California
  • Company Overview
  • Reaching New Heights
  • Ecologically Sustainable Conservation Coffee Program
  • Java City Brews Support for Creative Curriculum
  
  
• Competitive Profile: Kraft Foods Inc., Northfield, Illinois
  • Company Overview
  • Coffee, Almost as Important as Cheese
  • Starbucks Agreement
  • The Original Instant Cappuccino Marketer
  • New Hot Beverage System for Coffee Business Revival
  • Company Overview
  • Nestlé Drops Whole Bean and Ground Coffee Efforts
  • Retail Instant Cappuccino Endeavors Are Mediocre
  • Figure 4-5 Total U.S. Sales of Nescafé Frothé, 2000-2005 (in millions of dollars)
  • In Foodservice, There’s Nescafé Specialty Coffee
  
  
• Competitive Profile: Peet’s Coffee & Tea, Inc., Emeryville, California
  • Company Overview
  • The Starbucks Relationship
  • Diversifying Revenue Channels
  • Peet’s Has a Major Expansion Plan in Its Own Backyard
  • Selling Beans vs. Brews
  • Part of the Community
  • Building a New Roasting Facility
  
  
  • Competitive Profile: The Procter & Gamble Co., Cincinnati, Ohio
    • Company Overview
    • Folgers Enters New Product Categories
    • Millstone, P&G’s True Specialty Coffee Brand
    • P&G Discreetly Manages Brother’s Coffee
    • Folgers Leads in Foodservice Instant Cappuccino
    • New Foodservice Brewer
    • Millstone Launches Signature Collection
    
    
  • Competitive Profile: Sara Lee Corp., Chicago, Illinois
    • Company Overview
    • Exiting the U.S. Coffee Business
    • Coffee Brand History
    • All About Senseo
    • Company Overview
    • The Year Ends on a Great High
    • Jim Donald’s Path to Being Starbucks’ New CEO
    • Starbucks to Shutter Torrefazione Coffee Bars
    • Volumes Can Be Written
    • 2006 Will Be Entertaining
    • Lobbying on Corporate Menu
    
    
  • Competitive Profile: Tully’s Coffee Corp., Seattle, Washington
    • Company Overview
    • Japan Licensee Buys Out Japan Market

Chapter 5 Distribution and Sales Channels

• Retail Distribution Methods
• ESL Technology Provides Dairies with a Warehouse Opportunity
• Direct Delivery Advantages
• The Cost of Face-To-Face Business
• Advantages of Warehouse Delivery
• Distribution Agreements
• Smaller Marketers Work Through Brokers
• Retail Sales Overview
  • Shopping Options Are Plentiful
  • Different Types of Retail Outlets
  • Traditional Supermarkets Account for 56.6% of Retail Sales
  • Table 5-1 U.S. Retail Coffee: Share of Dollar Sales by Outlet, 2005
  • Retail Outlet
  • Figure 5-1 U.S. Retail Coffee: Share of Dollar Sales of Coffee by Outlet, 2005
  • Different Formats Attract Consumers for Their Varied Needs
  • Traditional Supermarkets Down in Number
  • Leading Retail Chains
  • What Will 2006 Bring?
  • Packaged Coffee Placement in the Supermarket
  • Secondary Merchandising Creates Incremental Growth
  • Price Often Higher for Decaf and Flavors
  • Never Under Price
  • Table 5-2 U.S. Retail Coffee: Retail Price of Selected Coffees Packaged for Future Brewing or Mixing, 2005
  • Table 5-3 U.S. Retail Coffee: Retail Price of Selected Ready-to-Drink Packaged Coffee Beverages, 2005
  • Private Label Pricing
  • Table 5-4 U.S. Retail Coffee: Private Label vs. Branded, Comparative Retail Price of Ground Coffee (Canned/Containered), 2005
  • Table 5-5 U.S. Retail Coffee: Private Label vs. Branded, Comparative Retail Price of Whole Bean Coffee (all varieties), 2005
  • Table 5-6 U.S. Retail Coffee: Private Label vs. Branded, Comparative Retail Price of Packaged Ready-to-Drink Coffee Beverages on an Ounce Basis, 2005
  • Never Seeing the Inside of a Store
  • Warehouse Clubs
  • Coffee Is Big Business at Club Stores
  • Table 5-7 U.S. Retail Coffee: Club Store vs. Retail Prices, 2005
  
  
• Coffee House Distribution Overview
  • Coffee House Distribution Methods
  • Explosion of Locations
  • Foodservice Sales Strongest in All Types of Restaurants
  • Table 5-8 U.S. Foodservice Coffee: Share of Dollar Sales, 2005
  • Foodservice Outlet
  • Figure 5-2 U.S. Foodservice Coffee: Share of Dollar Sales of Coffee Packaged by Outlet, 2005
  • Coffee Cafés a Victim of Success
  • Constraints on Opening Cafés
  • Prices Vary by Chain and Location
  • Expanding Via Supply Agreements
  • Sometimes Training Is Necessary
  • Growing Through Cups of Joe at the Supermarket
  • Liquid Gold for the Retailer
  • Starbucks Jumps on the Drive-Thru Bandwagon
  • Coffee Is Big Business for C-Stores
  • When Buying Coffee Inside, the Smell Must Be There
  • Travel Coffee Includes Hotel Service and Airline Offerings
  • And in the Quick-Service Arena

Chapter 6 The Consumer

• The Economy and Its Impact on Consumer Confidence
• How Do Americans Shop for Foods and Beverages?
• And When They Shop, Many Have Weight Control on Their Mind
• Today’s Nutrition Savvy Consumer
• Consumers Are in an Overall Wellness Revolution
• The Role of Convenience and Nutrition
• We Are a Coffee-Loving Society
• Opportunities with the Hispanic Consumer
• Latino Coffee Shops Find a Niche: Non-Hispanics
• There’s Also the Specialty Coffee Consumer
• Bits and Pieces on Specialty Coffee Consumers
• Specialty Coffee Consumers Are Not Only Affluent Urbanites
• A Great Way to Connect With Them: The Supermarket
• Shoppers Who Use the Coffee Bar
• What Do Consumers Think About Single-Serve Brewers?
• Making Some Coffees Special to Select Consumers
• If Organic Is That Important, Who Is the Organic Consumer?
• But Do Consumers Really Know What Organic Means?
• Table 6-1 Consumer Responses About Requirements for Foods to Be Called Organic (Unaided)
• Organic Users Show Greater Understanding
• Figure 6-1 Percent of Consumers Agreeing “Completely/Somewhat” That Organic Foods and Beverages . . .
• Organic Industry Must Educate Consumers
• Organic Foods Perceived as Healthier
• Table 6-2 Reasons Why Consumers Choose Organic Foods and Beverages
• 60% of Shoppers Feel Organic Foods Are Healthier
• Another Survey Confirms Perspective that Organic Is Healthier
• Table 6-3 Percent of Consumers Who Agree Organic/Natural Food Is Beneficial
• Education Levels Higher for Organic Shoppers
• As Market Grows, Consumer Profile Changes
• Frequency of Use Increasing
• Demographics of Organic Users and Non-Users
• Table 6-4 Percent of Adult Consumers Who Use or Do Use Organic Foods and Beverages
• Bringing All That Organic Data Back to Coffee
• Where’s My Coffee From?
• Enough About Organic Already; What About Fair Trade?
• C-store Shoppers Want Many Coffee Beverage Options
• Those Lines Sure Are a Deterrent for Some Consumers