Coffee is to Australia what tea is to England—arguably the national drink after beer—synonymous with socialising, avocado on toast and the Aussie sunshine. However, since the start of the COVID-19 lockdown in Australia, our coffee consumption habits have shifted.
Australians are known for their coffee shop culture. According to Nielsen Consumer Insights research, one-in-two (53%) Australians visited a coffee shop or cafe at least once a month in 2019. However, the latest omnichannel data from Uno Group revealed that in the four weeks to April 7, 2020, the number of trips to coffee shops dropped significantly (-39%) compared with the prior four-week period.
Instead, we have started to drink more coffee at home. Nielsen Homescan data showed that Australian households spent an additional 37% on coffee from grocery outlets for in-home consumption in the four weeks leading up to March 22, compared to a year ago. And it appears that some consumers may be missing their local barista, with increased sales for more premium coffee options and growth particularly strong for coffee beans, premium instant coffee, standard instant coffee and ground coffee.
Relative to their spending behaviour across total grocery, households under 35 years old without children are the group most likely to have increased their spend on coffee during this period, particularly for premium instant coffee, ground coffee and coffee beans. It is likely that many of this group have shifted to working from home during the pandemic lockdown and are drinking coffee at home rather than picking up the flat white on the way to work.
The shift in coffee consumption is just one example of how consumer behaviour during the pandemic has influenced strong growth in particular grocery categories as Australians spend more time eating and drinking at home.
Survey data from Nielsen’s Global Consumer Sentiment Report revealed 28% of Australians who use food delivery services are now using them much less frequently; while 40% say they are eating at home more often. Over the same time period, we have seen a number of pantry categories in growth – such as Asian and Indian cooking ingredients – indicating that for some, cooking is replacing the Friday night takeaway.
For manufacturers and retailers, understanding how consumers are switching their spending across the supermarket can help fill their basic needs by keeping shelves stocked. But it could also be a chance to introduce some much needed bright moments into shoppers’ carts, possibly by offering more premium options or partnering with local cafes so shoppers can pick up their favorite blends. And by applying the coffee example more broadly, there is scope to premiumise, with many consumers looking for little luxuries.
Given the change in routine, it is likely that these shifts in consumption habits will remain for the mid-term, and may even stick once restrictions in movement are lifted.