From macchiatos to our beloved flat white, it is clear that coffee culture has well and truly established itself in New Zealand.
2.3million Kiwis are drinking it at least once a week – we hit our daily fix at cafes but we are also drinking the black beverage at home. In fact, coffee sales in supermarkets grew by $9.9million in the last year. Finding growth in a mature category like coffee is difficult, yet coffee has grown at 4.7%, well above total grocery growth (2.3%), and amounted to $218million in sales.
Retail sales show that the ‘Café Inspired’ and ‘Coffee Capsules’ segments are accountable for this growth and that this success has been driven by innovation providing consumers both quality and convenience through new technology and packaging format changes. We know these segments within the Coffee category are driving much of this growth – but what do we know about the shoppers that are purchasing these new segments? By integrating the coffee category’s retail sales performance with consumer drivers using Nielsen’s ScanTrack Consumer service we can find out with the click of a button.
Café Inspired coffee is most successful with households with no children, and most of these buyers tend to be younger singles and couples. Benefiting from the sales are new brands to the segment and promotional activity by existing brands. The market leader in the segment held performance through their existing buyers, largely those with young families, upgrading to larger pack sizes.
By understanding the value contribution of either new buyers to these segments or from existing shoppers buying can help determine the communication strategy and the spend allocated to these products. Conversely understanding which buyers are being lost to competitive brands and the value of those sales can set the communication strategy to win these buyers back.
Coffee Capsules account for 3% of total coffee ($6.6million) with value growth of 202% year on year. The key driver behind this growth has been new buyers to the category. Growth has been driven out of high income households buying into the segment, with the largest growth from older singles and older couples.
Coffee Capsule sales in supermarkets are very much in an embryonic stage in the product life cycle in New Zealand. In Europe portioned coffee accounted for 19% of total volume of coffee sales in 2014, with average growth rates at 9%. Benchmarked against Europe this segment still has a lot of opportunity in the New Zealand market.