Coffee Spending Up, Consumption Down

Coffee Spending Up, Consumption Down

Coffee Consumption is dropping for the first time in years, according to the latest report from the USDA. The annual report notes that coffee consumption in the U.S. will drop from 24 million 60kg bags to 23.7 million 60kg bags over the course of 2015-16. This marks the first decline in U.S. coffee consumption since 2009-10, at the height of the recent financial downturn. Interestingly, though, while coffee consumption is expected to drop, spending on coffee is still on the rise. According to Time.com, coffee spending is expected to rise from a record $11.9 billion in 2014 to $13.6 billion in 2016. In other words, while the U.S. may be drinking less coffee, they’re spending more money to drink it.

Some are calling it the Keurig effect. Said one coffee roaster interviewed in the Time.com article, “We’re losing the kitchen sink as a consumer.” Because single serve coffee brewers make coffee one cup at a time, the common wisdom suggests, consumers are pouring less coffee down the kitchen sink – the typical fate of the rest of the coffee pot. So, consumers may be drinking as much coffee as ever, but their sinks are drinking a whole lot less.

Coffee Consumption | The Keurig Effect – Is It Real?

The popularity of single serve coffee brewers keeps rising, and shows no signs of slowing down. If anything, the expiration of Keurig’s patent on K-cups last fall sparked fierce competition among both coffee roasters and manufacturers of coffee brewers as they flooded into the growing market. The new entrants into the market have introduced many innovations, including greener versions of Keurig’s popular K-cup – refillable K-cups, compostable K-cups and biodegradable K-cups among them. But that doesn’t necessarily mean that single serve brewers alone are responsible for driving down coffee consumption. In fact, there are a number of other factors that could account for at least part of the responsibility.

Finally, Nick Brown, writing at Roast magazine, notes that the panicky headlines are all out of proportion to the reality, which is that the drop in coffee consumption for next year still means that U.S. coffee drinkers will be drinking more coffee than they have on average the last 5 years. As far as the Keurig effect, Brown dismisses it by pointing out that the U.S. coffee industry has just seen 5 years of increased coffee consumption, coinciding with a veritable explosion of single cup coffee brewers.

Keurigs and their imitators aren’t the only single serve coffee brewing methods gaining popularity, for example. Sales of coffee drippers have steadily risen over the past several years, as have sales of other types of coffee brewers that make less than a full pot of coffee at once.

In addition to the proliferation of coffee brewing methods, or in conjunction with it, the U.S. coffee palate has been growing more and more sophisticated. The popular view of drinking coffee from a caffeine delivery method to a gustatory experience. Coffee snobs – for lack of a better word – no longer have to frequent the corners of the Internet to find information about new coffee roasters and coffee trends. Instead, they’re reported in national mainstream media as real news. More and more coffee drinkers are opting to drink higher quality coffee – but less of it.

That makes a whole lot more sense than blaming it all on the Keurig.