Specialty Coffee Consumption: A Look at the Numbers

Screen Shot 2014-12-10 at 2.32.55 PMBy Heather Ward, SCAA

I am now, and have always been, a specialty coffee consumer.

I love everything about coffee: the fragrance, taste, and simple moments taken with my cup of coffee that help me get centered. Coffee is what I look forward to every morning, whether it is manually brewed at home or at a nearby shop where a talented barista uniquely prepares the delicious hot beverage just for me.

I have been lucky enough to craft my love for coffee into a career, giving me the opportunity to serve the coffee community. I’d like to share with you how I made my way into the coffee industry, and present some key data and findings that I’ve recently compiled in my new role as research analyst.

For years, I carried my coffee ritual with me everywhere: to school, work, and even the gym. I shared coffee moments with family, friends, and sometimes fellow coffee lovers I would meet in a coffee shop. It made me start to think about the individuality of coffee consumers. What were they drinking? Where were they drinking it? When did they start their personal coffee journey? I became fascinated, and started making it a point to always ask coffee consumers my favorite question: what was your first coffee experience like?

The question sparked a variety of responses. Faces would light up as they told the tale of their first precious sip of a silky cappuccino. Others would reminisce about Starbucks coffee dates with a best friend, laughing and drinking vanilla lattes. Either way, coffee consumers have a personal journey that is special to them, and worthy of respect, no matter what it entails.

I went through business school, thirsty for studies on coffee, and couldn’t wait to present any pertinent information I could find. Coffee became intertwined in my coursework, and professors would smirk as my coffee enthusiasm seeped through my term papers. It was a defining moment when I finally recognized I wanted to research and share coffee information with the intention of helping people in the coffee community.

Towards the end of my MBA program, I met with the dean of the business school to finalize my thesis topic. He told me I was the biggest coffee nut he had ever met, so it felt natural to choose a topic on coffee. His crucial question was: what exactly do you want to study in coffee? My answer: the consumer. He seemed satisfied with the direction, but advised that I continue brainstorming and think deeper to develop details around the question and how to frame the study. It was a tough sell; many of my ideas were not accepted. Perseverance and commitment paid off, and shortly after I found myself sitting in my favorite coffee shop, sipping on my favorite specialty drink while I worked through an economic analysis of U.S. coffee consumption. I set out to develop a model through the historical investigation of a statistical relationship between U.S coffee consumption, factors specific to the coffee industry, economic conditions, and consumer behavior. The results showed general economic conditions and consumer behavior have some impact but are not the main drivers of coffee consumption.

A week after I presented and defended my thesis, I applied for a job with SCAA and before I knew it, I was a staff member on my way to the annual Strategic Leadership Summit. I was immediately immersed in the world of specialty coffee and surrounded by brilliant minds with profound passion for coffee. I was introduced to a specialty coffee I never truly knew.

Screen Shot 2014-12-10 at 2.34.52 PMThe journey continues for me in my new role as a research analyst, and my interest in the consumer has been brought to the forefront again. My first project was to develop a U.S. Specialty Coffee Consumption infographic with the goal of identifying the national percentages, cups, and market share of specialty coffee.

While working through this project, I had to consider the word “specialty,” and how to best quantify specialty coffee consumption with the data that is available. I quickly realized the complexity of the gap between SCAA’s description of specialty coffee and consumer confusion on the term. For statistical purposes, and SCAA’s attention to consumer perception, “specialty” was aligned with the available gourmet coffee data in the National Coffee Association’s Annual Drinking Trends Study, the longest available statistical series of consumer drinking patterns in the U.S. The NCA describes gourmet as traditional drip coffee (hot or iced, brewed from premium whole bean or ground coffee); espresso-based beverages; and iced/frozen blended coffee. The methodology was recently enhanced in regards to which coffee types are profiled, to better reflect higher quality that consumers are drinking.

In this infographic, 34% of adults are drinking coffee everyday and the overall trending suggests sustained momentum for specialty consumption growth in the last five years. Consumers desire more and better tasting coffee. The Drinking Trends report also revealed daily consumption is driven by espresso-based beverages and indicates changes in specialty vs. non-specialty perception. The market share of specialty cups is 51%, passing non-specialty for the first time.
Moving forward, a component of SCAA’s strategic plan is to focus additional efforts on consumer insights with the goal of improving the competitive position of specialty coffee. Plans are in place to seek more clarity and construct future original research on measuring specialty coffee consumption and consumer awareness of the term.

As for me, I am still a specialty coffee consumer and always will be, but now I have the unique opportunity to give back to the coffee community by taking a look at fellow consumers and seek to better understand their behaviors, motivations, and habits. I look forward to sharing these outcomes with you!

HeatherHeather Ward is SCAA’s research analyst. Before moving into the coffee industry, she completed her MBA with studies focusing on the economics of coffee. She has a passion for coffee, market analysis, and helping the coffee community better understand the landscape of the industry.