Coffee Brands Adapt as Consumers Brew at Home

People tend to drink coffee where they are, which lately hasn't been on campus, in the office or meeting friends at local cafes. They’ve been home. This shift in location has brought about a change in how consumers get their daily dose of caffeine. Dunkin’s and Starbucks’ physical stores have suffered, but their lines of at-home coffee products have not. From March through June, U.S. retail sales of packaged coffee were up 17.9% compared to the same period last year, according to Nielsen. With no quick-and-tidy end to the pandemic in sight, coffee brands have been embracing the idea that a greater number of consumers will be brewing their own coffee at home for the foreseeable future. And they’ve adjusted strategies accordingly. The J.M. Smucker Co., for instance, which makes, markets and sells the Dunkin’ line of bagged, canister and K-cup coffee offerings, has dedicated more resources and marketing dollars toward ecommerce and click-and-collect channels as more consumers go online to buy groceries. The company has also optimized content to ensure its products appear high in the search results of various retail platforms, such as Amazon's and Walmart's sites. An “Enjoy the Great Taste of Dunkin’ at Home/While You Endlessly ‘Add to Cart’” banner ad, which debuted prior to the Covid-19 outbreak, is still running. The country already knows America runs on Dunkin’, but the marketing campaign aims to make sure people know homes run on Dunkin’, too, according to a spokesperson. Overall, Smucker's coffee segment, which also includes its Folgers and Café Bustelo brands, saw U.S. sales climb 11% to $582 million for the quarter ending April 30. The company also plans to release an espresso-style coffee later this year, building upon a lineup of espresso drinks Dunkin' restaurants have been promoting since late 2018. “We've developed and are going to launch both a K-cup and finely ground coffee that doesn't require special espresso equipment,” said John Spain, director of marketing for Smucker's coffee business. Spain noted that while the innovative product was in the works prior to the outbreak, he believes that it’s “much more relevant in the current environment.” On the topic of new items meant to profit from hot trends, Nestlé, which manages Starbucks’ at-home portfolio, plans to release two non-dairy Starbucks coffee creamers made with a blend of almonds and oats. The flavors—caramel macchiato and hazelnut latte—are scheduled to hit store shelves nationwide next month. [kickout id="1" label="sider"] [article_summary section="1"]Starbucks itself has poured more time and energy into its Coffee at Home webpage, which contains recipes, updates and links to buy products. In recent weeks, the company has added new content to the site, such as instructions on how to make dalgona (whipped) coffee and upside down cold brew dalgona coffee, according to a spokesperson. The strategy appears to be working. In March, average monthly traffic to the site spiked 45% compared to January and February, according to market intelligence company SimilarWeb. Visits to Starbucks’ Coffee at Home have remained elevated throughout the Covid-19 crisis. Top paid keywords Starbucks has invested in include “how to make cold brew coffee” and “how to make iced coffee.” For the past few months, Peet's Coffee has been using the hashtag #AtHomeWithPeets to promote its packaged products on social media. The company also created a tutorial web series under the same name, featuring step-by-step videos on how to make cold brew and pour-over coffee. Peet’s declined to comment for this story. Even when Covid-19 begins to subside, other forces will encourage people to keep brewing their own coffee, explained Caleb Bryant, associate director of food and drink at the market research firm Mintel. One is the expectation that many companies will let their employees work from home indefinitely, either on a full-time or part-time basis. [article_summary section="2"]Another factor is cost. With 11.1% unemployment and economic uncertainty ahead, consumers are more likely to get their coffee from a grocery store where it’s cheaper than a restaurant chain. This, said Bryant, is what happened during the Great Recession. “The short-, medium- and long-term implications of the pandemic all directly or indirectly benefit at-home coffee,” he said.

Adapting to Crisis

Coffee Brands Are Adapting as Consumers Opt to Brew at Home

Though it began with lockdown orders, experts think the trend will continue

Paul Hiebert

About

Subscriptions

Events

Publications

WORK SMARTER - LEARN, GROW AND BE INSPIRED.

Subscribe today!

Paul Hiebert