The U.S. Liquid Coffee For Foodservice Application Market, estimated at USD 17.3 Mn in 2025, is expected to exhibit a CAGR of 4.8% and reach USD 24.0 Mn by 2032.
The Food and Beverages sector is driving global growth, balancing rising consumer demand for sustainable, healthier options with industry investments in digital transformation, e-commerce, and supply chain innovation.
Drivers
Several people are drinking coffee out-of-home, which has led to an increasing number of coffee shops across the country. For instance, according to the National Coffee Association’s (NCA) 2020 National Coffee Drinking Trends report, more people are drinking coffee out of home than ever, reaching a high of 46% in 2020. New coffee shops are opening across the U.S. to meet this increasing demand. Moreover, according to NCA, in 2020, there were 33,129 gourmet coffee shops in the U.S., an increase of 2% in units from 2019.
Major brands are also opening their outlets on university campuses in order to meet the increasing demand for coffee. For instance, in 2020, Pret A Manger (an international sandwich shop franchise chain) entered into a franchise agreement with Bon Appétit Management (a California-based on-site restaurant company that provides café and catering services to corporations, colleges, and universities) to open outlets at university campuses in the U.S. In the initial stage, they opened outlets at the University of Pennsylvania and the University of Chicago. The outlets offer a range of organic coffees, salads, and sandwiches.
Market Restraints
Increasing penetration of single-cup brewers in households is expected to hamper market growth of liquid coffee for foodservice applications during the forecast period. For instance, according to the National Coffee Association (NCA), one-third of American households owned a single-cup brewer in 2020, up from 29% in 2019. Thirteen-to 18-year-olds reported that single-cup ownership in their households jumped from 23% to 31% over the last two years.
Key Trends and Analysis of the U.S. Liquid Coffee for Foodservice Application Market:
- There has been an increasing demand for flavored coffee drinks, especially among younger consumers. To meet this increasing demand, coffee outlets or chains are launching new products, which also helps them to expand their product portfolio. For instance, in January 2020, Starbucks Corporation launched an almond milk honey flat white and a coconut milk latte. The beverages were added to the permanent menu in stores in the U.S. and Canada as part of the new winter food and beverage lineup. The almond milk honey flat white combines shots of blonde espresso with a honey blend and steamed almond milk. For the coconut milk latte, the beverage is crafted using shots of Starbucks blonde espresso combined with steamed coconut milk and finished with a strike of cascara sugar.
- The increasing inclination of customers towards ordering food online is further expected to drive growth in the U.S. liquid coffee for foodservice applications market. Owing to rising home delivery and online ordering trends. For instance, the study by Coherent Market Insights' suggests that contactless ordering has become a priority and that over 45% of customers prefer online ordering for off-premise orders. Moreover, the study also suggests that fast casual, quick-service, coffee stores, snack stores, and other food service outlets in the U.S. have experienced a major uptick in off-premise sales compared to the pre-pandemic period.
Market Opportunities
For instance, in 2020, Starbucks Corporation announced its plans to make Starbucks Delivers (an on-demand delivery service) available throughout the U.S. in early 2020 through an agreement with Uber Eats (an online food ordering and delivery platform) as the preferred delivery partner. The partnership will help Starbucks by leveraging the expertise of largest global delivery service provider while extending the potential customer base beyond those who currently use Starbucks items. Companies will collaborate on innovation and technology integration. Moreover, companies will focus on delivery packaging, in-store operations, and a quick order-to-door delivery window.
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Key Takeaways
- Among serving type, hot coffee segment held the largest revenue share of 8% in the U.S. liquid coffee for foodservice application market in 2020
- There has been a surge in the consumption of hot coffee, as it aims to boost the metabolic rate and increase fat burning. Hence, the rising obesity rate in the U.S. is one of the key factors contributing to the growth of the segment. For instance, the Centers for Disease Control and Prevention revealed that the U.S. obesity prevalence increased from 30.5% to 42.4% from 2000 to 2018.
Key Players
- Major players operating in the U.S. liquid coffee for foodservice application market include Café Amazon, Café du Monde, Caffè Nero, Coffee Beanery, Costa Coffee, Dunkin'Donuts LLC, Four Barrel Coffee, Gloria Jean’s Coffees, McCafé USA, and Starbucks Corporation
- Key players are focusing on various growth strategies, such as product launches to support the U.S. liquid coffee for foodservice applications market. For instance, in January 2019, Costa Coffee launched ready-to-drink products. The range included the variants such as classic latte, caramel latte, and black americano.
U.S. Liquid Coffee for Foodservice Application Market - Impact of Coronavirus (COVID-19) Pandemic
COVID-19 had a significant impact on the consumption of coffee due to the lockdown imposed by the rising COVID-19 pandemic. For instance, according to NCA’s Coffee, Consumers and COVID-19: Road Map to Recovery (report released in October 2020), consumption of coffee decreased by 50% at full-service restaurants, 17% at quick-service restaurants, and by 13% at shops and cafés during the pandemic. With dine-in options significantly curtailed during the pandemic, takeout and delivery were the only options available for the vast majority of consumers across the country. Although sales of foodservice liquid coffee decreased during the pandemic, the U.S. market has continued to attract investment from coffee chains internationally. For instance, in May 2021, Vietnam’s coffee brand TNI King Coffee opened its first coffee chain store in California, U.S. Moreover, in June 2021, Japanese boutique coffee chain % Arabica opened its first U.S. store in Brooklyn, New York. Furthermore, Phuc Long Coffee & Tea (a Vietnam-based coffee chain) entered the U.S. market in July 2021 with the opening of its store in Garden Grove, California.
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