Coffee: the standard breakfast drink grows up

Nation's Restaurant News, August 19, 2002

Coffee has always been an American breakfast staple.

Bottomless, steaming cups of hot java are a longstanding morning tradition, but that's changing. People increasingly are drinking coffee, but they're drinking it differently. Hot drip coffee is still the norm, but now it has been joined on breakfast tables by iced coffee, flavored coffee, espresso drinks and coffee made by French press. Specialty coffees are on the rise too, from single-estate specialty coffees to Cajun-style cafe au lait with chicory.

"Coffee is the crown to a meal," says Tim Cleland, sales manager for institutional and gourmet divisions of Gavina Gourmet Coffee, based in Vernon, Calif. "If customers get a bad cup of coffee, that's the last thing they'll remember. And if they have a good cup of coffee, they'll have an overall better impression" of a restaurant.

New members in the coffee club

Coffee consumption in the United States is definitely on the rise. A recent survey by the National Coffee Association found that some 1.9 million Americans became daily coffee drinkers just over the past year, and 9.5 million more Americans are drinking coffee every week than did so in the previous year. The NCA estimates that 161 million Americans drink coffee at least occasionally, making up 77 percent of U.S. adults over 18.

And more of that coffee is being drunk during breakfast. In 1999, 58 percent of all coffee in the United States was consumed during breakfast. That figure was 65 percent in the latest survey.

Drinking better brews

"Obviously, coffee's huge in the United States right now," says Jim Munson, vice president of Dallis Coffee in New York. "And one company is setting the pace - Starbucks."

Munson, who used to work in the gourmet beer industry, equates Starbucks' effect on the coffee industry with Sam Adams' impact on beer. He says Sam Adams' early success opened consumers' eyes to new possibilities and allowed smaller brewers to explore a broader range of styles for their beverages.

Similarly with Starbucks, "as people become familiar with paying $2 for a cup of coffee, it becomes possible for retailers to do more with that two bucks," Munson says. So better coffee has become available as consumers have come to demand it.

"I think that more and more people are identifying themselves as specialty coffee and gourmet coffee drinkers," Munson adds.

NCA figures bear that out. Over the past five years, the number of daily drinkers of gourmet coffee beverages has increased from 7 million to 27 million. Despite the fact that gourmet coffee does not generally come in bottomless cups, the coffee association's president and chief executive, Robert Nelson, points out that gourmet coffee drinkers are more likely to drink larger cups of coffee--more than 8 ounces--than traditional consumers.

But even in the world of mainstream coffee, consumption is on the rise.

If it ain't broke, don't fix it

Ken Kimmel, vice president of Dunkin' Donuts Concepts, says the Randolph, Mass.-based coffee-anddonut giant is seeing an increase in its coffee consumption, too.

Dunkin' Donuts coffee is known for its consistency, which the company's product development manager Rob Stephen ensures by sourcing different components of the blend from different regions throughout the world as seasons change. "That's been one of the keys to our success, really," he says.

Dunkin' Donuts' ever-popular standard blend is a much lighter roast than brews coming from the West Coast, such as Peer's and Starbucks. Several years ago, in response to a potential shift in tastes to darker roasts, the East Coast company added a "cafe blend" to the varieties of coffee available to its franchisees. But Dunkin' Donuts isn't changing its old standard.

"What we hear from our customers is: 'This is our third generation drinking this, please don't change it,"' Stephen says.

And Dunkin' customers haven't been stampeding for the cafe blend.

"It's something that has sort of turned into a local market option," says Stephen, adding that it is something available for franchisees to offer if they want to. "More shops don't sell it than do. ... Dark roast usually has a tough road for the everyday coffee-drinker crowd here [in the Northeast]."

Kimmel agrees, noting that while many of the chain's Boston units offer the cafe blend, he has seen no interest in Rhode Island. "We don't see it as a part of our business that's growing substantially," he says.

Adding ice and hazelnut

That's not true for iced and flavored coffee, though.

Kimmel says the public seems to have changed its view of iced coffee in particular, which used to be a seasonal drink, popular only during the summer months. Now it seems to be drunk more as an everyday alternative to hot coffee or soda.

As the variety of cold beverages available in the United States has increased in recent years, "people are now looking to things with ice in it as a matter of routine," Stephen says.

So the company has added new products like Dunkachino, a sweet coffee-mocha product.

In addition, such flavored coffees as hazelnut and vanilla now make up 20 percent of Dunkin' Donuts' business, according to a survey the company conducted in May 2000. A nationwide survey by NPD Crest found that Dunkin' Donuts has a 33-percent share for hot-flavored coffee servings in the quick-service segment.