COFFEE CONSUMPTION IN CANADA

• With an estimated population of 37 million, Canada consumed up to 3.9 million (60-kilogram bags) of coffee. According to the Coffee Association of Canada, the country’s 2/3 population enjoys at least a cup of coffee every day, with the daily average of the drink being 3.2 cups per day.

• Adults aged between 18 and 79 are the major consumers of coffee in Canada. A study showed that among the coffee drinkers, men are the highest consumers with a daily average of 3 cups as women only consume 2.4 cups per day.

• Canadians mainly consume coffee at home, and breakfast is the meal that consumers enjoy a cup of coffee the most. In regard to out-of-home consumed coffee, majority of Canadian consumers prefer to drink coffee at work or at the eating place where they make the purchase.

CANADIAN CONSUMERS PURCHASING HABITS OF COFFEE

• Canadians prefer traditional coffee. A study by the NPD Group, Inc. revealed that whenever Canadians purchase out-of-home coffee, they are most likely (76% of servings) to consider a cup of traditional hot brewed drink compared to specialty coffee (14% of servings) and iced specialty coffee (10% of servings).

• However, the NPD CREST foodservice market research noted that the craving for coffee by Canadian consumers is beginning to be more adventurous when it comes to purchases. Since 2012, the demand for hot brewed coffee has declined with a rate of 1% while specialty coffee and iced specialty coffee servings have witnessed a surge of 4% and 10% respectively.

• In the recent years, specialty coffee is becoming more popular including espresso, latte, cappuccino, café mocha, café Americano, and macchiato (a growth of 3% was witnessed between 2011 and 2015). Females are the key drivers of these beverages, consuming 65% of hot specialty servings and 67% of iced specialty servings.

• The 2018 Square Canada Coffee report revealed that latte is the most loved coffee brand by Canadian consumers, followed by Americanos and drip coffees. In regard to the regional scope, Manitoba is the area with the most affordable latte sold at $3.7 on average, while Alberta sells the same coffee at $5.43 on average.

• In the past year, flat white and cortado have taken coffee shops in Canada by storm as the fastest growing beverages. Sales of cortado-Spanish style have increased by 97% in the past year. Flat white, on the other hand, has witnessed increased sales by 81% within the past year. 

• More Canadian consumers are also purchasing cold brew chills iced coffee. By the summer of 2018, the orders of cold coffee brew began to outpace ice coffee by about 85%. Additionally, non-dairy milks have become popular in coffee shops across the country.

CANADIAN CONSUMERS PURCHASING HABITS OF COFFEE APPLIANCES

• Twentify conducted a recent survey on how Canadians make their coffee in reference to the appliances they use. The survey revealed that Keurig Brewer remains the leading brand in the personal brewer’s category with 25% of the respondents admitting to preferring the product.

• The NPD Group, Inc. also noted that Canadians prefer single-serve coffee pod machines like the K-Cup brewing system. Currently, up to 40% of coffee consumers have pod machines in their homes.

• Another go-to choice for the consumers is the drip coffee maker which is preferred by 25% of the respondents. Because of its automatic brewing, consumers consider it the best appliance to fix coffee at home.

WHERE DO CANADIANS SEARCH FOR THE "BEST COFFEE" WHEN GOING OUT AND AT HOME?

• Based on our findings, Canadians already have the formed culture and preference towards specific coffee brands, and as such do not look for referrals. In the survey conducted by Twentify, it became apparent that Tim Hortons is the most preferred coffee brand (14.9%) both at home and when going out, followed by Maxwell House which is preferred for instant coffee (12.7%).

• Furthermore, the survey respondents asserted that Folgers Coffee (10.6%) and Starbucks (10.7%) have addictive tastes preferred by the majority of coffee consumers.

• Canadian consumers’ choice of coffee shops is largely influenced by convenience. When looking for home coffee, the majority consider grocery stores near them (72.7%). The second place preferred by coffee consumers is the coffee shop (16.1%), which is followed by the department store (7.5%).

CONSUMER PERCEPTION ON SUSTAINABILITY IN THE CANADIAN COFFEE INDUSTRY

• Coffee consumers in Canada care about their environment, and as such pay attention to sustainability in the coffee industry. Although coffee pod machines have been trending over the years, consumers recently began to notice the impacts of the pods on the environment.

• CBC News reported up to 10 million K-cups were produced in 2015 alone, which is an indication of the alarming impact on the environment. As a result, consumers are demanding for recyclable coffee pods that can help prevent environmental degradation.

Blue Bottle Coffee

• To bring the level of coffee connoisseurship to customers in the online retail space Blue Bottle Coffee needed to educate their audience through content marketing by creating in-depth brewing guides, educational videos, and courses on buying, storing, and brewing great coffee.
• The company's push for freshness helped shape their approach to the e-commerce industry.
• To kick-start their expansion online, Blue Bottle Coffee raised $20 million and followed up with another $25 million in 2014, and $72 million in 2015.

11th Street Coffee (Necco Coffee)

• 11th Street Coffee, the Necco Coffee's internet division headed by Anthony Jnr., the founder’s son, is leading their online retail growth with products and sales channels which are growing by 25%.
• 11th Street e-commerce started off small and then they embraced new technology; software that would take their online orders and accurately print out shipping labels and packing slips.
• The company evaluated several software platforms and finally partnered with Pulse Commerce, which helped with their transition to the next phase of growth, re-platforming their e-commerce and back-office technology.
• 11th Street Coffee offers its customers ‘subscribe and save’ a coffee ordering subscriptions online.
• The company also sets up new promotions and coupons on social media and they also create insightful reports with detailed breakdowns.

Keurig Canada

• Keurig Canada’s Eileen Chen's role in the company's e-commerce is making sure that every single web page is optimized without bugs by coordinating with IT to ensure everything is perfectly organized.
• She also initiated a project which focuses on group discussions to better understand their customers’ pain points on their website.

Research Strategy: