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Study: Quick-service consumers hot on coffee

New research shows that consumers are buying more coffee today than they were two years ago

While the restaurant industry these days is bullish on specialty coffees and teas, operators should not ignore their regular brewed coffee, which accounts for most of their customers’ coffee orders, according to market research firm Technomic Inc.

Chicago-based Technomic’s “Market Intelligence Report: Coffee and Tea” found that 60 percent of restaurant consumers reported drinking regular hot coffee or tea in the past month, second only to the 62 percent of customers who bought a non-diet, carbonated soft drink at a restaurant.

According to the report, 14 percent of customers said they are buying more hot coffee today than they were two years ago, and 10 percent reported the same behavior for iced tea.

“Consumers who regularly purchase coffee on their way to work are motivated by the convenience of the location,” Joe Pawlak, Technomic’s vice president, said. “But significantly, they are actually more motivated by the quality of the coffee, making them important loyal customers who return often.”

Over the past few years, restaurants’ rising popularity as a source for quality coffee has allowed operators to increase their prices for coffee and tea — not including frozen or blended coffee drinks — Technomic found. According to the report, the average price of regular coffee grew from $2.25 in 2008 to the current average of $2.36. The average price for tea or iced tea rose from $2.40 in 2008 to $2.57 in 2010.

Quick-service chains are capitalizing on consumer appetites for better brewed coffee. Before rolling out its premium McCafé line in May 2009, McDonald’s upgraded its regular coffee to a premium roast blend in 2006 and tested the espresso-based beverages for McCafé for a year and a half. Wendy’s will take a similar approach with regular coffee in its breakfast test.

During The Wendy’s Co.’s second-quarter earnings conference call, chief executive Roland Smith said an upgraded coffee program would be crucial to Wendy’s ongoing test of breakfast. The morning menu is in place in six test markets, and the brand will begin rolling out breakfast to more markets this year with the goal of having it in 1,000 units by the end of 2011.

“This test features a new premium coffee blended especially for our restaurants that we have branded Redhead Roasters,” Smith said. “This program includes grinding coffee beans in-store, which provides excellent aroma and freshness cues. A great coffee program is critical to any part of a successful breakfast menu, and we believe Redhead Roasters will be a great complement to our high-quality breakfast menu.”

Krispy Kreme Doughnuts also will place more emphasis on coffee, rolling out three signature varieties soon in an effort to boost its coffee sales from 4 percent of revenues.

As for hot and iced tea, 73 percent of consumers said they are interested in green tea, which reportedly contains antioxidants and other health benefits. Lemon and honey were two other flavors that garnered heavy interest from respondents, at 61 percent and 60 percent, respectively.

New products in the restaurant industry to capitalize on this interest include the Pomegranate Tea Infusion at Jamba Juice, iced green tea at Bruegger’s Bagels, and green-tea-flavored frozen yogurt, which was one of the two original flavors at Pinkberry.

Technomic’s Pawlak said 1,500 consumers were interviewed in June for the “Market Intelligence Report.”

Contact Mark Brandau at [email protected].
Follow him on Twitter: @Mark_from_NRN

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