A new Guggenheim report estimates U.S. coffee industry sales at $80 billion a year, of which $70 billion is from out-of-home traffic at coffee shops. The category is dominated by Nestlé, Starbucks, and JAB Holdings, which owns Caribou Coffee, Peets Coffee and others. A key area for improvement remains: sixty-eight percent of non-coffee-drinkers don’t like the taste; and 14 percent are concerned about “negative health effects.” Keurig Dr Pepper (KDP) and other major players like Nestlé’s Nespresso, Dunkin Brands Group, and Starbucks “are all failing to communicate the healthiness of their brand based on social conversation,” Guggenheim analysts wrote. But craft coffee companies (e.g., Four Sigmatic, Bulletproof) “have made health their central selling point. As to single-serve machines, Keurig is still the dominant platform, but Nespresso “over-indexes versus Keurig in consumer responses on many attributes (e.g., quality, variety, durability).”
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