In a recent blog, Coffee Affection’s Kate MacDonnell detailed what she perceived to be the emerging trends for the coffee industry, particularly in the US. What makes her commentary interesting, at least to me, is how she forecasts — using third-party statistics — that the consumption of coffee would increase by one-third by the year 2030.
Simply put, the coffee business will continue to flourish into the next decade even as Starbucks reports a drop in sales for the second quarter — the first time in three years — on the back of weaker demand in the US and China. The coffee store chain is also said to be affected by a boycott campaign in the Middle East and other countries over Israel’s offensive in the Gaza strip.
Coffee shop chains will continue to thrive, although additional niche markets are expected to help sustain the growth momentum of commercial coffee sales. But what I find more interesting is the growth of the home market. “Home” brewing is on the rise and we now see the emergence of at-home baristas, thanks to the broadening availability of tools that allow this to happen.
Whereas coffee consumption used to be mainly the domain of the working man, today even teens and children consume coffee in one form or the other after the iced version of the beverage was popularized by chains like Starbucks, Dunkin Donuts, and Tim Horton’s, among others. Even McDonald’s sells specialty coffee through its McCafe chain.
Moreover, espresso machines are now common household appliances, unlike in the decade before. Gone are the days when the Italians practically had a monopoly on big, expensive espresso makers. Good coffee can now be made by practically anyone at home, including teens, if they are willing to spend on “gourmet” or specialty coffee pods or expensive beans, and coffee “tools.”
MacDonnell took note of how, as of 2024, American coffee drinkers now average two to three cups daily. And while two-thirds of drinkers prefer regular coffee over espresso-based drinks, millennials prefer espresso-based drinks and gourmet coffee 70% of the time. Iced coffee is consumed by 20% of coffee drinkers at least once per week; and 59% of coffee drunk daily is “gourmet” coffee.
Another interesting point is that in the US, says MacDonnell, 70% of coffee drinkers prefer to make and drink coffee at home, and that single-cup coffee brewers — as opposed to 8-10 cup coffee makers — are now found in 41% of homes and 28% of offices. At the same time, in 2022, roasted coffee purchases hit $73.9 billion while instant coffee sold a lower $16.3 billion.
This is not to say that “instant” soluble coffee is on the way out. In fact, in Southeast Asia, 3-in-1 instant coffee is still very popular. However, gourmet coffee generates more revenue given the significant premium consumers willingly pay for every cup. Flavored coffee is in its heydays, it seems. And the fact that coffee shops continue to enjoy good business simply tells me that a lot of people still “spend” on coffee.
Increased consumption at home is one factor that will continue to sustain coffee industry growth into the next decade. And then there is the youth’s preference for cold or iced brew and coffee-based specialty drinks that di-rectly compete with soft drinks, iced tea, and other sweetened beverages. Coffee is also now readily available at drive-throughs, pick-up stations, or even via delivery.
I did not drink coffee until I started working as a journalist over 30 years ago. Back then, instant was the norm and brewed was a luxury. But when Starbucks opened here in the late 1990s, there was a shift in consumption patterns. Starbucks made it fun to enjoy a cup at a slower, more relaxed pace, in a venue that is comfortable and cool. Since then, a new coffee culture emerged.
From being mainly a breakfast brew, coffee — including iced coffee — instead became an all–day beverage. One could order a cup and sit in a shop the whole day, working on a laptop, or talking shop, or chatting with friends. Food is also available, but the atmosphere is very different from a fast food or a regular restaurant.
Up until 2019, I had a coffee maker at home, a Bodum French Press, a Bialetti Moka espresso maker, a Muji drip coffee cup, an aluminum Vietnamese coffee drip, and a Keurig K-Cup machine that was a gift from a friend. Then the COVID-19 pandemic hit in 2020, and that got my household started on a Delonghi espresso maker, then a Nespresso machine, and of late, a machine that could take ground and three types of pods.
Many people I know have now chucked the 8-10 cup, paper-filtered, drip coffee maker in favor of single-cup coffee brewers that take either beans, ground coffee, or pods. And this, to me, is one of the reasons why coffee in-dustry growth will also come from homes and businesses that self-brew, and not just coffee shop chains, and from consumers looking for convenience.
And given that more people now consume “gourmet” or flavored or specialty coffee, coffee machine capsules are very likely to continue selling briskly. Good coffee can be had at the press of a button at home or at work. Machines also allow young people to make their own specialty brews, and not just regular breakfast coffee. They go for “better” brews.
Coffee shops will continue to thrive, I am sure. And they will still attract people who drink coffee for work or enjoy coffee with company. But modern coffee machines and coffee pods will be a mainstay for those who want quality coffee at home or at work. Cold brew, popular among the young, particularly flavored ones, can be easily made anywhere with the right “tools.”
It is unsurprising that the global coffee market overview remains positive. For 2024, some available statistics point to revenues of around $94.7 billion from at-home purchases and $373.5 billion from out-of-home consump-tion in 2024. Market volume is anticipated to reach 7.7 billion kilograms, with at-home consumption accounting for 6.3 billion kilograms.
MacDonnell has a simple explanation for the coffee phenomenon: “Again, this comes back to quality. The more coffee is consumed, the more people expect it to be above par. This has created a rise in espresso-based bever-ages, specialty drinks, and innovative new coffee that is a break from the centuries-old brew coffee lovers are used to drinking.”
Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippine Press Council.
