If there’s one thing the millennial demographic around the world have in common, it’s a taste for coffee. As this group makes up a major percentage of the world’s coffee drinkers, it’s a generation worth taking note of if you’re a coffee shop or roaster wanting to stay ahead.
Tapping into this market is crucial for business success, but it won’t happen without an understanding of what trends drive their behaviour. To find out more, I spoke with two specialty coffee professionals about trends they’ve observed in coffee consumption.
Keeping reading to find out what Nicole Ferris (Managing Director for Climpson & Sons) and Ralf Rueller (owner of The Barn) have to say about the impact of millennials on the coffee industry, and be sure to catch their panel on the same topic at the Producer & Roaster Forum in Honduras this March.
Lee este artículo en español Explorando Las Tendencias en Café Especial de Los Millennials
Baked goods on display at Climpson & Sons. Credit: Climpson & Sons
What Are Millennials Looking For in Coffee?
Millennial coffee consumption can be characterised by many traits. However, for those looking for more insight into catering to the millennial consumer in a coffee setting, the following trends offer valuable information on their consumption habits.
Alternative Health Options
Millennials are more concerned with personal wellness than any generation before them, which may be because they have more access to information on their health than ever before. This concern has spilled over to their coffee consumption habits, with many seeking out decaffeinated options in an effort to keep their caffeine consumption in moderation.
With the amount of diagnosed food allergies on the rise, coffee consumption could also be impacted by those who’ve developed lactose or nut intolerances switching from traditional dairy milk to plant and nut-based options.
It’s noteworthy that consumers are learning that popular dairy alternatives such as almond and coconut milk have negative consequences on the environment and often violate human rights. This means that the demand for sustainable and cruelty-free alternatives such as oat milk and seed-based milk could rise in the future.
Milk and caffeine-free alternatives are something that many modern coffee shops have started to offer, as Nicole Ferris and Ralf Rueller can attest.
Nicole is the Managing Director of Climpson & Sons, an East London specialty coffee shop that sources and roasts coffee. She says, “The rise of oat milk has been huge – we’ve seen about a 70% increase in oat flat whites from last year. Overall, we’ve seen about 50 to 60% increase in oat milk consumption across the board, [in] both hot and cold coffee drinks. I think we’ll see this continue as veganism and environmental considerations are considered. This is an easy win for people to be able to make a small change, and it still tastes good”.
Ralf is the owner of The Barn, which is a specialty coffee roastery in Berlin, Germany. He informed me that he already offers two low caffeine level coffees at his shops: “One lot is called Laurina and one is called Aramosa. [In] early 2019, we launched our low-caff coffee for people that are more sensitive to caffeine, for people that want to drink in the evening, or for people that just want to have less caffeine. They’re very flavoursome and enjoyable, and we’re really proud that we found a natural alternative to decaf”.
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A barista steams milk on the espresso machine at Climpson & Sons. Credit: Climpson & Sons
Better Quality Offerings
Specialty coffee is characterised by its high levels of quality, and the fact that every step of its journey, from growth to brewing, is constantly monitored in order to improve it. Origin is important, as it can impact a coffee’s flavour and profile, even amongst coffees of the same variety.
For millennials, quality trumps quantity. In the US, millennials have taken to specialty coffee, and drink more of it than any other generation. They’re also more likely to drink it outside the home, and will spend more on quality coffee, as they’re willing to pay for a drink that’s complex and innovative. A study by American beverage supplier S&D Coffee & Tea on millennial coffee consumption reinforces this, by revealing that millennials are concerned with a coffee’s origin, how it was roasted, and its brand when making a purchase decision.
According to Nicole, millennials “have a desire for crafted products, and they want to identify with these values geared towards sustainability, traceability and local or independent business[es]. People want authenticity so it’s an opportunity to share your story. This, in turn, creates the buy-in you need for people to come back. A genuine experience is priceless!”
She adds, “People want to be a part of something, share in this value system, and feel connected. At the end of the day, you can come for a cup of..coffee, but it’s more than that. There’s an opportunity to share an experience [and] engage with other people, in an increasingly digital world”.
People enjoying their coffee at a round table at one of The Barn locations in Berlin. Credit: The Barn Berlin
Increased Environmental & Social Responsibility
Wanting to know where their coffee comes from – as well as how eco-friendly the milk they add to it is – is indicative of another concern that millennials have that impacts their coffee consumption. Environmental friendliness, sustainability, and social responsibility are all issues important to them.
They’re more price sensitive and less brand loyal than the generations that have come before them, which means that they expect companies to be more socially responsible without having to pay more for it.
They care about how well the farm workers involved in coffee production are paid, and if they have an established set of rights. Research by America’s National Coffee Association also indicates that they’re concerned about whether their coffee was produced sustainably – in other words, with as little pollution as possible, and using renewable resources.
With continual improvement comes a rise in prices, and higher quality beans are going to cost more to the consumer because they cost more in general. Therefore, the final product must compensate for this. As Ralf says, “specialty coffee is an opportunity to change the value chain of coffee…to really make a difference at origin at farm level. Not only to…pick the best lots, but to do some real work with farmers; to elevate them, to treat them as equal partners”.
For coffee shops looking to capitalise on this on a budget, the most significant solution could be being as honest as possible when it comes to ethical practices. For example, acknowledging that your coffee shop doesn’t have a cup recycling scheme is probably going to sit better with millennials than covering up the fact that most of them are sent to landfill.
As Nicole explains, this must be done genuinely and honestly: “Millennials seek ethically conscious buying behaviour, so the world is bombarded with the word ‘sustainable’. It is a bit of a buzz-word so to be able to find authenticity is the challenge for the specialty coffee industry.”
Barista brewing coffee at The Barn Berlin. Credit: The Barn Berlin
Convenience On Demand
As millennials increasingly demand speed and convenience from their products and service providers, they’re turning to forms of coffee that are convenient and quick to prepare, but still taste as good as a four minute pour-over. This can be seen in the ever-growing popularity of cold coffee beverages, ready-to-drink beverages, and specialty instant coffee.
Between 2016 and 2017, the US saw cold brew sales increase up to 80%, and consumption rates show no sign of slowing down. Its popularity isn’t necessarily unique to American millennials, as one out of every five new coffees introduced to the global market in 2017 were cold brewed and ready-to-drink. While European markets remain resistant to cold coffee drinks, sales of iced coffee drinks are on the rise in countries like Australia and India.
As a group, millennials are twice as likely to drink cold coffee compared to older consumers, and cold brew is a beverage that most have either heard of or tried. Grabbing a bottle of ready-to-drink cold brew off a shelf will fit in perfectly with the busy, career-focused millennial lifestyle, allowing them to enjoy quality coffee whilst still keeping up with the fast pace of the modern world.
This demand for convenience that doesn’t compromise on quality can also be seen in the rise of specialty instant coffee. Businesses are beginning to sell quality instant coffee that can be consumed on the go, requiring only hot water and a cup.
While instant coffees have had a reputation for being poor quality, modern manufacturers are investing in labour intensive processes to preserve their flavour and aroma such as small batch brewing, secondary drying and an extended freezing process. Many manufacturers are also creating their products using better quality Arabica beans instead of the usual Robusta.
Ralf spoke to me about the specialty instant coffee that is available at The Barn, saying that “the convenience market is there. They want to have it quick…not everybody’s travelling with a grinder and an Aeropress and a kettle…The pouches are compostable, so it’s also environmentally friendly, and it tastes good”.
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Grab-and-go coffee stalls, such as Climpson & Sons Old Spitalfields location, could be the future of specialty coffee. Credit: Climpson & Sons
The interests of millennials have no doubt helped drive the specialty coffee industry to where it is today, and they’re crucial to its future development. For coffee shops and roasters wanting to capture this market, integrating the above trends is just the beginning.
The millennial market is educated on what it wants, which allows businesses to foresee the direction that they should be heading in. There’s a chance that this might change in time, but by paying close attention to what they’re enjoying today, you’ll be better positioned to see where they’re heading tomorrow – and make sure your business is there to meet their needs.
Enjoyed this? Then Read Managing Customer Expectations in Your Coffee Shop
Written by Tasmin Grant. Feature photo caption: People waiting for their coffee at one of The Barn locations in Berlin. Feature photo credit: The Barn Berlin
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