BISFoodService – Coffee Overtakes Tea As Dominant Hot Beverage In Australia: Strategy

Full of beans: Coffee overtakes tea in popularity as Aussies ditch chain cafes

By Michelle Hammond
Thursday, 29 November 2012

Coffee has overtaken tea as the hot drink of choice for Australian consumers, according to a new report, with an industry analyst suggesting independent cafés are now more popular than coffee chains.


The Coffee and Beverages 2012 report series, released by BISFoodService, is based on a consumer survey of 1,200 respondents aged 14 and over.


These results were combined with BISFoodService’s proprietary database information, official figures and online databases.


The away-from-home and away-from-work market for coffee, in terms of number of units purchased, increased from 1.8 billion in 2010 to 2.1 billion in 2012, according to the report.


This represents a jump by nearly a fifth (19.5%).


This is despite the cost of coffee rising sharply. In the last two years, the average price of an away-from-home, espresso-based coffee rose 7% from an average of $3.62 per cup to $3.86.


Within the next two years, the away-from-home coffee market is expected to grow between 10% and 15%.


But according to Sissel Rosengren, head of BIS Foodservice, drive-through coffee chains make up just a “tiny percentage” of the market.


“When you look at our market compared to the UK market and the US market, we are not a chain market,” Rosengren told StartupSmart.


“Australian consumers want to go to independent cafés and independent restaurants, and we have a unique food service market in that sense.”


Rosengren also believes the consumption of coffee is now an ingrained part of our daily lives.


“When you look at this research, you ask for the reasons why people have a cup of coffee… You have it for no reason at all. In other words, coffee is part of your life,” she says.


“Coffee is now part of the fabric of society.”


On average, every Australian aged 14 and over spends $8.60 per week on coffee away from home, the report reveals. This equates to $447 per year.


Australians drink 1.8 coffees in a typical week, both away from home and away from the workplace, representing a rise of 0.3 coffees per person since 2010.


According to Rosengren, the majority (62%) of coffee consumption takes place mid-morning, followed by mid-afternoon (35%) and early morning (30%).


“We are basically changing from a tea-drinking nation to a coffee-loving nation. The younger generations are driving that,” Rosengren says.


“Every socioeconomic group, as well as every age group, is now drinking coffee. It doesn’t matter what kind of profession you have or what background you come from, you drink coffee.”


The way to capitalise on this, Rosengren says, is to make coffee a key part of your offering – even if it’s not your primary product.


She uses Krispy Kreme as an example of a brand that has failed to promote its coffee.


“Krispy Kreme’s [promotion of] coffee wasn’t particularly effective as, for example, Muffin Break. People went there for a doughnut, full stop,” she says.


The rise of coffee coincides with the demise of tea. According to BISFoodService, the average number of units of tea consumed per person per week at home has fallen from 8.6 to 7.9.


And unlike coffee, tea “falls short” away from home, Rosengren says.


“Tea is simply not resonating with younger individuals,” she says.

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