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The era of customisation

From the August 2018 issue.

Simple black or white with one sugar won’t cut it for today’s coffee drinkers. They want to customise every aspect of the beverage, including what they put in it.

In 1974, Burger King adopted the slogan “Have it Your Way” to communicate to patrons that they could customise their burgers – a novel concept at the time. But today, customisation is king, with most food and drink outlets adopting some personal characteristic to appeal to consumers who increasingly expect options for their varied diets and preferences.

The same is true in the coffee industry. In fact, some may argue that coffee is one of the most customisable drinks out there.

“You don’t have this level of customisation in any other beverage category,” says Mark DiDomenico, Client Solutions Director at market research firm Datassential. DiDomenico presented on the topic at this year’s National Coffee Association expo in March, with a focus on additives.

S&D Coffee & Tea has long partnered with Datassential to follow the evolution of these trends. “Years ago we did some extensive research on the hierarchy of needs for [coffee] consumers. Then, customisation was an enhanced need,” says John Buckner, Vice President of National Account Sales at S&D. “But recently we learned that customisation is now a fundamental right, and no longer an enhanced need.”

According to that research, which ranked the criteria consumers evaluate when choosing a venue for coffee, price and quality were the only factors deemed more important than the ability to customise coffee.

“Eighty-five per cent of consumers prefer to customise their coffee,” Buckner explains in a 2017 NCA webinar on the topic. “Fifty-four per cent of consumers will add to it further even after ordering a customised beverage from the barista.”

Additives are the most common way to customise coffee, particularly related to taste preference, but the options – and resulting unique combinations – are endless: cup size, bean origin, roast level, temperature, brew method, caffeine level, flavour and more.

Datassential’s latest research indicates that creamers, a non-dairy coffee additive that is primarily used in brewed coffee or espresso, are the most popular way to flavour coffee, followed by beans and then syrups.

Its research shows that 74 per cent of coffee drinkers add something to their coffee. About two-thirds add creamer, and nearly half add a sweetener. Creamer’s popularity over sweetener may be attributable to the fact that texture, flavour and sweetness can be customised with just the one additive.

This popularity has largely supported growth in the multi-billion-dollar coffee creamer industry. Also driving the industry – and representing an important trend in customisation and additives – is the plant-based foods movement. Following in the footsteps of dairy milk alternatives for lattes and other coffee beverages, creamers are now offered in a variety of alternative milk formats, such as soy, almond, cashew and coconut.

“To call use of plant-based milks ‘new’ is behind the times, but we have seen a surge of popularity recently,” Datassential’s DiDomenico tells Global Coffee Report. “Sixty-seven per cent of consumers use plant-based creamers at least sometimes and an additional 16 per cent are at least interested in trying them.”

The increasing use and interest are based on creamer’s perception of being healthier and more natural than milks, according to Datassential. Where soy milk was first to the scene at least 30 years ago, almond milk has now surpassed it in popularity. Sixty-one per cent use almond milk compared to 47 per cent for soy, followed closely by coconut at 44 per cent.

Major player Califia’s almond milk coffee creamers are its fastest-growing category, up 53 per cent in 12 months, says Melanie Kingsley, Senior Director of Marketing & Insights. After success with almond milk and cold brew coffee, coffee creamer was the natural next addition to the plant-based product portfolio.

Like the greater creamer sector, Kingsley attributes Califia’s creamer growth – and the company’s overall growth – to the plant-based foods movement, which is not “new” but still has lots of potential.

“Plant-based milks make up 13 per cent of total milk sales – a share that is expected to reach 20 per cent by 2021,” she explains. “Plant-based creamers make up four per cent of total creamer sales, so looking at the trajectory of plant-based milks, we expect the same to happen in the creamer category.”

Meanwhile, the other major non-dairy creamer category continues to grow almost as strong, despite sitting on the other end of the spectrum from natural, plant-based creamers. According to Datassential, flavoured and unflavoured liquid creamer use has increased 22 per cent and 38 per cent respectively since 2013. Flavoured liquid creamer is actually the most popular creamer across all options, with about 40 per cent of coffee drinkers using it.

At face value, DiDomenico acknowledges that this growth and popularity are in conflict with those of more natural and plant-based creamers, but he points out that the two categories of creamers are actually moving parallel in one way: “away from animal-derived products.”

Similarly, the use of milk and half-and-half as additives has decreased 30 per cent and 14 per cent respectively since 2013.

Because additive use is largely centred on taste, their flavour profile and extensive variety of flavours are what keep flavoured liquid creamers in the leading position.

“We will always offer the variety that flavour-seekers crave,” says Brittney Polka, Senior Brand Manager of International Delight, which is known for its extensive variety of classic and unique creamer flavours.

For people who don’t rely on creamers for sweetness, consumers have just as many options of sweeteners. Similar to the expanding plant-based creamer category, Datassential’s research says drinkers increasingly prefer more natural sweeteners. Traditional refined sugar is the most popular, with 88 per cent of coffee drinkers either using it or at least interested, followed by raw sugar, flavoured syrups, honey and brown sugar. The artificial sweetener packets rank low on the list, ahead of only maple syrup and agave nectar.

Compared to two years ago, research shows that all natural sweeteners are experiencing increased usage, while the unnatural, non-nutritive sweeteners are on the decline. Use of plant-based sweetener stevia has experienced the most change, jumping 50 per cent in two years.

Characteristics like “all natural” and “no artificial ingredients” are the main drivers behind the declines in artificial sweeteners and refined sugar, as well as the growth in stevia.

In addition to creamers and sweeteners, some coffee shops and convenience stores are offering more ways to customise and expanding their additives stations.

One way is through functional additives. More and more menus and additives stations are including ingredients like cinnamon, turmeric, protein and vitamins. In fact, incidence of turmeric on coffee menus has skyrocketed 176 per cent in the past four years, according to Datassential.

“With the broader push toward more functionality [in foods], we’re seeing more people customise coffee with functional ingredients,” DiDomineco tells GCR. “That’s what’s driving some of these newer, unique additives. Even the sweeteners and creamers could be tweaked to be functional.”

One such innovator, a pharmaceutical science fellow at Concordia University of Wisconsin’s School of Pharmacy, has created a powdered dairy creamer that claims to help reduce anxiety, with vitamins and minerals known for their calming properties: magnesium, L-theanine and gamma-aminobutyric acid.

“Coffee itself already has a lot of health benefits, so [we saw] a way to add even more health benefits to someone’s daily coffee routine,” explains Dr. Kwadwo Owusu-Ofori, Founder and CEO of The Satori Food Project.

He sees the customisation and functional trends in coffee and additives as “really good for the industry” and envisions a future where “coffee roasters work together with biomedical scientists to create coffee additives that are designed to be about more than just flavour”.

While that might be something of a distant future, Owusu-Ofori’s vision is indicative of the innovation that’s happening in the coffee additives market. To no surprise, those innovations are largely happening in the most popular categories: plant-based and flavoured non-dairy creamers.

“Fifty per cent of people are trying to adopt a more plant-based diet, and [in creamers specifically] 64 per cent of consumers are looking for fewer ingredients and cleaner labels,” says Califia’s Kingsley.

As such, an increasing number and variety of plant-based creamers are hitting shelves, and existing brands are cleaning up their recipes or adding plant-based options to their portfolios.

“Within the past four to five years we’ve really seen the SKU proliferation in that category at grocery,” says S&D’s Buckner, pointing to obscure plant-based creamers, like oat, quinoa, hemp, flax and chia seed milks. “And that’s a pretty good proxy for consumer taste and preference as the trends are changing.”

Califia has been watching the rise of oat milk in particular, which has grown in popularity due to its foaming properties and how well it complements coffee. While Califia doesn’t have any plans to launch an oat milk creamer at the moment, it’ll continue to be driven by data and its consumers for innovation.

“We’re constantly looking at data and trends, and listening to our customers,” Kingsley says. “We try to figure out what is just noise and what could be a long-term option.”

Similarly, the idea for Stok’s coffee shots were inspired by consumer demands back in 2008, arguably before customisation was truly mainstream.

“We saw consumers customising their beverages in coffee shops by ordering an extra shot of espresso,” explains Jessica Holland, Associate Brand Manager for Stok. “There’s no real way to replicate adding an extra shot [in other environments], so we wanted to find a way to give consumers that extra shot they were asking for outside the coffee shop.”

Each 13-millilitre concentrated coffee shot delivers 40 milligrams of caffeine, equivalent to a shot of espresso. They’re primarily found in convenience stores, where additives stations have expanded exponentially in recent years.

Though Stok doesn’t have any new additives on the horizon, the brand is part of the greater Danone North America portfolio, which includes a number of other coffee additive brands following the merge of Danone US dairy and WhiteWave last year.

“As we watch these trends, it’s really interesting to see what actually makes it into our morning cup of joe,” Holland tells GCR. “Coffee is such a personal experience for everyone and such an important part of their day.”

Also in the Danone portfolio is liquid creamer segment leader International Delight, which continues to innovate to cater to those aforementioned flavour-seekers.

“One of the ways we identify new flavours is by tracking brands and flavours that our consumers love outside the coffee experience,” says Polka, referencing International Delight’s new Oreo-flavoured creamer. “Our first requirement [for pursuing a new flavour] is that it has to enhance the coffee experience and cannot be considered simply because it’s a novelty. Customisation is a big part of the International Delight brand and our unique offering, so our innovation will continue to be flavour-forward and convenience-based.”

While generations of the past have been content with black coffee or standard cream and sugar, today’s Generations Z, Y and even X have a much different flavour profile. According to Datassential, younger generations are more likely to use additives in coffee, particularly plant-based creamers and natural sweeteners. As such, there is a forecast increase in overall additive use as the younger generations age.

The research suggests that their customisation preferences are so strong that the younger demographic will go out of their way to find a coffee shop that makes a seven-word latte just the way they want it or a convenience store that has the extensive brews and exact additives they’re looking for. In fact, Datassential reports that about 50 per cent of consumers would not return to a venue if only one creamer type or one sweetener type was available.

Buckner says this doesn’t mean coffee outlets are expected to carry every liquid creamer flavour and every plant-based creamer type. The data is “just reinforcing the need for a variety of additive options so consumers can customise their coffee the way they want it.”

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