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.

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