March 9, 2007, Newsletter Issue #99: Single Cup, Big Bucks?

Tip of the Week

Coffee is a lucrative business and owners of coffee bars, coffee houses and coffee shops are part of what the Specialty Coffee Association of America estimates was an $11.05 billion business in the United States in 2005. Almost $9 million of that comes from cafes, kiosks and carts. The market grew by more than $1 billion from 2004 to 2005, even with 60 percent of adults calling themselves occasional coffee drinkers, rather than daily drinkers.

If international trends in single-cup coffee indicate what will happen in the United States, it is no wonder that more coffee sellers are investing in one-cup coffee makers.

Single-cup coffee makers and servings such as K-Cups are still relatively new in the U.S., so there is room for growth. Single-serving coffee makes up about 5 percent of the U.S. market now, according to Dow Jones article in July. The market share is expected to increase to 20-25 percent in the next decade, according to the Specialty Coffee Association of America.

There, single-cup pod-brewed coffee took over 40 percent of the market share, according to an article in Tea & Coffee Trade Journal published in January 2005. The reasons? Choice, convenience and improved taste all factors important to American consumers.

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Joe Wallace