Coffee Redefined
Millennial is a label that has been getting a lot of use lately. Discussions about how to reach this unique target market has dominated several different sectors from technology to food. Why the hype? And what does the millennial audience mean to coffee?
Plenty.
Millennials are rewriting the way that consumers look at coffee. Since 2008, daily consumption of espresso-based beverages has nearly tripled, with millennials making up a large proportion of the purchasers . According to National Coffee Association, in the last eight years, past-day consumption of gourmet coffee beverages increased from 13% to 36% for 18-24-year olds and from 19% to 41% for those aged 25-39.
Millennial coffee drinkers are the new face of coffee. Unlike their parents, the majority consume their coffee outside the home. They are not shopping for drip brewers to make a large pot of coffee; this generation explores a much broader range of brew via single cup. They are willing to wait (and pay the price) of authentic flavors from origin released in a custom pour-over. Cold brew is a welcome innovation on the run while on a different day they might eagerly debate the merits of an exacting one drip every 1.5 seconds slow-drip (Kyoto-style) cold brew. And although they don’t have deep pockets, with looming college bills and new families, they appreciate the elegance of a hand crafted cup customized specifically for them.
Who are the millennials?
Millennials were born between 1981 and 1995 which means they are now 21-35 years of age. They were born into technology, and are often called digital natives – the first generation actively engaged online practically from birth. They are tweet, snap-chat, share pics on Instagram, and pack their Facebook timeline with a stream of experiences. These coffee drinkers are constantly tuned in and will not only take a picture of their customized drink, they will share the entire experience online. That being said, these individuals are online not look for the best deal, but want to discover brands that they feel reflects their values and beliefs.
According to S&D Coffee and Tea these individuals have $2 billion in spending power and are expected to outspend baby boomers by 2017. But it’s not their money that makes millennials interesting to coffee segment, it is the way they are engage with coffee. This behavior is redefining the specialty coffee landscape.
“The average young millennial, age 18 to 24, started drinking coffee at 14.7 years old, while the older millennial was introduced typically at age 17,” says John Buckner, vice president, marketing, S&D Coffee and Tea. A large majority regularly consume both cold and hot coffee beverages.
They are the self-defined foodie generation, with 48% of older millennials, and 34% of younger millennials taking pride in a refined and discerning palate. Their on-the-go life style naturally lends itself to stopping into their favorite coffee shop for barista prepared beverages. These individuals want coffee that elevates their experience whether the taste or the story behind the beverage – preferably both.
The emotion of coffee
To best identify with this subgroup, coffee manufacturers and roasters should reflect on how their product responds to this particular group’s needs. “The language millennials use and the attitudes that they have indicate that they are connected to coffee at an emotional level,” says Buckner. “For them, coffee is not just a drink, it’s an experience.” When coffee companies focus on qualities such as fresh, arabica, or single origin, they are focusing on only one of many aspects that millennials seek. These attributes are still important to this cohort, but if it is all that it is talked about, the company will fail to connect with this audience.
At bare minimum, the product needs to be fresh, consistent, and easily customized. However; Buckner stresses that to truly engage this consumer group, both the coffee and the coffee company must respond to the elevated needs of this group including sustainability, community connections, and the use of innovative ingredients.
Perfect market for explorers
This adventurous subgroup is ideal for coffee roasters and manufacturers who avoid the beaten path to try something new whether it’s an unexplored origin, a unique roasting profile, or flavor. Buckner, reports that 25% of this subgroup considers themselves coffee experts, compared to only 20% of the non-millennials. They are curious and willing to experiment, and willingly pay more for a product if they feel that it’s worth it.
Individual millennials want to be trend setters, and will eagerly share their experience through social media and their online connections. Specialty methods such as cold brew, Chemex, French press, and the pourover naturally lend themselves to this group.
Millennials take pride in being able to personalize and customize their brew, whether through brewing methods or experiments with flavors. Specialty coffee is their drink of choice. In fact, the coffee shop experience adds additional appeal to the millennials, with this market appreciating both the face-to-face interaction and expertise of baristas. Buckner explains that “49% of millennials believe that truly handcrafted coffee must be poured by a barista.”
The best coffee in their view is both freshly roasted and ground and brewed to order.
Millennials lead the pack, not follow. Coffee manufacturers benefit by demonstrating the unique value of their beverage, feed into their tastes, their focus on health and wellness, and social values.
Building bridges
NMI’s Steve French stresses that companies need to invest in complex media strategies. These consumers acquired a dislike for pop up ads. They prefer messaging and stories that they can relate to.
The millennial consumers are drawn to products that share their values. To connect with this audience, coffee companies benefit not only from certifications that signal concern for growers and the environment but beyond such as cause-based investments.
According to Buckner, 45% of millennials think more positively of a coffee product the brand can demonstrate it was sustainably produced. These consumers not only want to engage with companies that are socially responsible, they are willing to pay more for the products that reflect their values. “Everything you do is being scrutinized as millennials demand genuineness and transparency across the value chain,” says French. The environment remains one of the top pillars that these consumers connect with, and so coffee roasters would benefit by sharing their sustainable practices. This market is looking for companies that produce less waste, follow green practices, and minimize their impact on the environment.
With a radar for authenticity, these group are not swayed by promises without the stories that support them. The key to connecting to this discerning market group is for companies to share their unique story, and in turn, provide opportunities for this consumer group to connect in the experience. This cohort already loves the possibilities in a cup of coffee and is eager to explore a variety of beverages. The challenge is to develop a platform that does not advertise but instead reflects a value system that the millennial believes in.