Thanks to Millennials, Coffee Demand is Growing

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Many people hear “millennials” and think “fresh graduates”. But today, millennials are aged 18-39 (the median age in the U.S. is 37) and millennials are driving the coffee industry in the U.S. to historic records. Because the United States is the biggest consumer of coffee, world demand is growing as well.

Decaf most popular among millennials

Iced coffee options

Millennials are driving the cold coffee market in the U.S. Cold coffee has proven to be an effective way to convert younger drinkers – for whom the taste of coffee is often too bitter – into the category. This is especially true in the U.S., where millennials have grown up under the influence of coffee shops such as Starbucks and Dunkin’ Donuts. These establishments have heavily pushed the cold-serve, such as ice or frozen blended Frappuccinos.

Where millennials are in juxtaposition with their generational counterparts is that we find well over half drink cold lattes. Furthermore, almost twice as many U.S. Millennials drink iced coffee as do Gen-Xers.

However, millennials seek more gourmet-style coffee. Until recently, iced coffee in the U.S. was dominated by coffee that was brewed hot and then served over ice. This usually means a bitter-flavoured coffee, hence the need for plenty of cream and/or milk, flavourings and sugar to disguise the taste ― but at the expense of the calorie content.

Cold coffee options have now gained mainstream awareness in the U.S. following its inclusion on menus particularly at Starbucks, and an overwhelming majority of U.S. coffee/tea drinkers are now aware of cold coffee options.

Coffee Consumption by the Numbers

  • 70% of past-day coffee consumed by millennials are gourmet beverages; 30% is non-gourmet.
  • 32% of millennials consumed an espresso-based beverage yesterday, which is higher than any other demographic.
  • 14% of millennials drank a non-espresso based beverage past-day.
  • 15% of past-day coffee drinkers consumed their coffee at a cafe/coffee shop/donut shop; this is the highest segment for this consumption location.
  • About 65% of millennials are aware of single-cup brewers, significantly lower than their older age groups.

Millennials are shaping the coffee industry. They are more likely to have an espresso, for their quick pick me up. But after that they are health conscious and are looking to limit their caffeine intake so will opt in for a decaf option. They are increasingly purchasing the iced coffee option creating an upwards trend in demand of this market.

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Melanie - Unleashed Software

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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