Report: Coffee Overtakes Soft Drinks

Coffee surpassed soft drinks in total retail and foodservice sales for the first time in 2007, according to the Packaged Facts market research organization. Coffee sales were valued at $44 billion in 2007, according to an updated study, "Coffee in the U.S.: Retail, Foodservice and Consumer Trends."

The report also forecasts coffee sales to leap to $59 billion by 2012. Foodservice accounted for 87% of the coffee market in 2007, the report adds, while ground coffee dominates the retail category.

Due to new economic constraints Packaged Facts forecasts that sales of coffee through retail channels will grow at a faster pace than foodservice as more consumers exchange purchases at coffeehouses for brewing packaged premium coffees at home. It notes that marketers and retailers competing against the foodservice segment have successfully introduced premium packaged versions of recognizable foodservice brands, such as Seattle's Best, Starbucks, and Peet's. Current year figures to date indicate that specialty coffee products represent 30% of retail market sales and Packaged Facts estimates that the segment could eventually command 45%.

"The specialty coffee industry is at the forefront of offering ethical, eco-friendly products," notes Tatjana Meerman, Publisher of Packaged Facts. "Although this is a niche market, it is rapidly touching mainstream. For example, in April 2008, Wal-Mart launched a line of six premium packaged ground coffees that are either Fair Trade Certified, USDA Certified Organic, or Rainforest Alliance Certified."