At-Home Coffee Companies Gain Ground
The Morning Coffee Routine Is a Difficult Consumer Habit to Change
For years, executives running at-home coffee companies like Folgers and Maxwell House have been trying to convince consumers to drink more coffee at home, as to-go coffee from companies like Starbucks (SBUX) and Dunkin’ (DNKN) gains popularity.
Food marketers say that the morning coffee routine is one of the most difficult consumer patterns to change, and at-home coffee brands have spent decades struggling to lure customers away from coffee shops. Then the COVID-19 pandemic hit, and sales of at-home coffee and coffee supplies surged as people worked and got their caffeine fix at home.
Starbucks and Dunkin’ Adapt
While retail coffee sales heat up, Starbucks reported a 9% downturn in comparable-store sales in the Americas for its latest quarter. Sales of Starbucks-branded packaged coffee rose during the period, helping the company make up for some of its coffee shop business.
Dunkin’ has returned to growth at its open locations, but it has closed hundreds of stores that were seeing weak demand as a result of the pandemic. In order to try to draw people away from coffee in their kitchens, Dunkin’ is adding more blended drinks to its menu, which are harder to recreate at home.
Sales of Coffee Machines and Retail Coffee Heat Up
Retail coffee sales have climbed about 10% so far this year, compared to a 2% sales increase seen in most other years. Sales of at-home coffee equipment, like espresso machines and pour over brewers, have spiked by 28% since the pandemic began. Keurig Dr. Pepper (KDP), which sells a variety of at-home coffee makers, said it will reach three million new households this year.
The at-home coffee industry is hoping that consumers will continue to use their new coffee makers to brew drinks at home even after they return to work at the office. Coffee shops, on the other hand, hope people will get back to their pre-pandemic coffee on-the-go habits.
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.