What's the Buzz?
Coffee was once looked at as an elixir to "drive away the drowsiness" per the English Traveler, William Biddulph, in 1609. Today, consumers have an increasingly demanding expectation of what an average cup o' Joe should deliver, from environmental impact to mouthfeel.
Craft is the New Black
Similar to the craft beer industry, artisan espresso drinks are here to stay and are only going to get more nuanced with time. Younger consumers may order sugary Frappuccinos, but this generally evolves into a palate that craves the finer brews. Currently, over half of the coffee consumption in the USA can be classified as "quality" with an even higher percentage of it (70%) within the millennial cohort. We predict toting a Starbucks cup will no longer be seen as "cool" and will become comparable to sipping a Bud Light at a craft beer festival.
What is Third Wave Coffee, Anyway?
What is Third Wave Coffee, Anyway? To understand third wave coffee, we'll start by defining first and second wave coffee. First wave coffee is the original growth of coffee consumption with the goal of getting it in every consumer's kitchen. It was the first instance of bringing instant coffee and Folgers into homes. The second wave emphasizes quality and flavor of specialty coffee, like Starbucks and Peet's. Today, we're in the midst of the third wave, where brands are positioning their coffee more akin to a specialty wine and less of a commodity. According to Perfect Daily Grind, it includes "meaningful trade relationships, innovative brewing methods, an understanding of the importance of production and processing and more."
Ice, Ice, Baby.
Don't be surprised if you continue to see gloved hands carrying plastic cups of iced coffee year round. According to Mintel, 66% of Millennials drink iced coffee. From Stumptown to Califia Farms -- cold brew and iced coffee are moving into the mainstream and are coffeehouse staples.
What This Means for Brands
With U.S. consumers spending $70B on out-of-home coffee a year with a projected growth rate of 5%, it's only increasing in popularity (TIME, 2018). There's an opportunity to position food brands as a natural accompaniment to the coffee occasion. We can also glean insights about the increasingly important idea of value-based purchase decisions and apply it beyond coffee. Get ready for the craft movement to sweep across food categories as consumers become more savvy and interested in the production techniques of the foods they purchase.