The New Economic Reality of Coffee-Buying

In spite of claims that the worst of the economic recession is now past, market researchers are now saying that consumer behaviour has undergone a permanent change when it comes to coffee-buying. "Frugality is the new reality," according to a web site that focuses on specialty coffee and the impact economic trends have on that sector.

Americans drank 146 billion cups of coffee last year and consumed nearly nine pounds of coffee last year on average. Three out of four cups of coffee are prepared at home, while nearly 20 per cent of the coffee dollars spent were on espresso-based drinks. And not all of the figures express doom and gloom scenarios. According to market reports, 67 per cent of whole bean and ground coffee retailers experienced sales gains in 2008. A similar percentage (62 per cent) reported an increase when it came to beverage sales.

While some of the economic trends are contradictory in nature, analysts believe that -- generally speaking -- specialty coffee retailers such as Starbucks and Second Cup will experience a market correction: Some estimates expect that the economy will experience a 20 per cent drop in the number of retail shops selling coffee. On the other hand, customers continue to make buying coffee at shops part of their everyday routine. The National Coffee Association's survey on coffee habits reports that 80 per cent of customers say they are not going to change their buying habits, while the other 20 per cent say they will cut down but not stop buying coffee outside their home.

The total number of dollars spent on both grocery and food service coffees will also increase, but the general trend seems to be that consumers will give up the four dollar lattes in favour of the less expensive varieties of coffee.