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Millennials' Coffee Habits

Millennials’ Coffee Habits Percolating Big Sales

Millennials are a key driver in America’s coffee craze.

With an eye toward experimentation, culinary experiences, quality product and robust
flavors, millennials are a key driver in America’s coffee craze. Also referred to as Generation Y, the millennial demographic numbers about 75 million in the United States. Unlike their baby boomer parents, millennials, or those born between 1982 and 2002, started drinking the caffeinated brew at a young age, and their consumption trends have only gone skyward from there.

With the ever-changing coffee culture expanding rapidly in the United States, much of the credit goes to millennials, who consume 44 percent of the coffee in the country. According to the New York-based National Coffee Association, daily consumption among 18-to 24-year olds rose to 48 percent from 34 percent in 2016, and increased to 60 percent from 51 percent for those aged 25 to 39. The data also shows millennials on the younger end of the spectrum, or those born after 1995, started drinking coffee at 14.7 years old, while the older millennials, born around 1982, began at 17.1 years.

Savvy restaurateurs and onsite operators know tailoring coffee programs to this all-important demographic — and that means providing as much product source information as possible — can reap big benefits.

“At our stores, millennials are interested in the quality and origin of the coffee beans. They want to know if it is fair trade, organic, etc., as well as the method of brewing,” says Uriah Blum, vice president of operations for San Ramon, California-based Vitality Bowls, a 40-unit, fast-casual concept that is superfood-centric.

“Millennials know their coffee and freely consume it. In a typical day, we could see the same student multiple times: the morning regular coffee, mid-morning espresso and
afternoon latte. Our students drink multiple cups of coffee beverages all day long,” says Chelsey Toong, retail manager at Yale University in New Haven, Connecticut.

To that end, Yale has learned to give these students what they want. “This demographic does expect quality-sourced ingredients, and we have worked with a local coffee producer and roaster to develop our blends, describe flavor notes and tell the important story of our beans,” adds Toong.

Flavor is essential; a run-of-the-mill cup just doesn’t cut it with this group. “Millennials love their coffee strong, and complex,” says Nicole Beall, café manager at San Diego-based Herb & Eatery. “The more caffeine and the more unique flavor the better. If they aren’t going for a unique flavor, most are coffee purists in that they simply like espresso and milk.”

Quick and Easy

Despite a craving for high-end, quality products, they also want their coffee fixes to be convenient and hassle free.

“Millennials think about breakfast differently from other older demographic groups. Sitting down to breakfast on busy work or school days is too much work. Eating a bowl of cereal takes too much time. They want quick, on-the-go options, and they are more likely to eat and drink throughout the day,” says Amy Myrdal Miller, founder and president of Farmer’s Daughter Consulting, Inc. “They are not traditional breakfast-lunch-dinner eaters.”

Marc Jacobs, executive partner and vice president for Chicago-based Lettuce Entertain You Restaurants, says oftentimes coffee is breakfast for millennials.

“The new trend we’ve noticed is that coffee can be breakfast, and for many, it is! Coffeehouses have become the new meeting place to get work done, or a place to have work meetings,” he says.

Millennials seeking quick-and-easy coffee options have helped prompt the growth of the ready-to-drink market, which allows consumers the ability to grab-and-go. The ready-to-drink coffee category has experienced a five-year dollar growth of 93 percent in the United States, which represents $2.5 billion in annual sales, according to Mark Miles of the Coca-Cola Company.

“The ease, portability and flavor profiles of ready-to-drink coffee fit millennials’ lifestyles and preferences well,” says Miles.

Keeping convenience in mind — and offering coffee when and where they want it — is good for business, no matter the concept.

Will Pay a Premium

Seattle-based Starbucks, the QSR juggernaut, has long courted millennials in the hopes of building brand loyalty. Many other coffee specialty houses are doing likewise.

While spending power is not at its peak for this demographic, it’s only a matter of time. “They are willing to pay a larger percentage of their disposal income on special coffees,” acknowledges Luigi Di Ruocco, vice president of sales and director of marketing for Oakland, California-based Mr. Espresso. Di Ruocco also helped launch the first location of Coffee Bar in the Bay Area in 2007, followed by two other nearby locations. “They are willing to pay for culinary enjoyment. When I was young, we were all drinking soda and Gatorade. Coffee was functional — it was something to drink when you needed to stay awake for studying, or to do sports.

“That’s certainly not the case today. Millennials are willing to pay for culinary enjoyment and are naturally drawn to better quality culinary options,” he says.

Maeve Webster, president of Arlington, Vermont-based consulting firm Menu Matters, agrees this demographic will pay a premium but not at the expense of value.

“They appear to be less price sensitive than other generations but as with everything else, they are swayed by value. They will pay more for pour-overs and cold brews, among other third-wave innovations, because they see value in the quality and experience.”

Experimentation and Variety

The millennials’ desire to try the new and different has spurred restaurateurs to push the boundaries of coffee offerings.

“They gravitate to anything new — anything that gives them ‘street cred’ on social media,” says Myrdal Miller. “Nitro coffee and cold brew seem to be the latest coffee trend with these younger consumers.”

Coca-Cola’s Miles concurs. “Millennials drink more types of coffee than any other generation, and they over-index on espresso, lattes, iced coffee and slushy coffee.”

Vitality Bowl’s Blum also says experimentation is key and it pays to offer plenty of coffee options. “At our locations, a lot of millennials are more likely to venture outside of traditional coffee — for example trying unique brewing methods or handcrafted drinks as opposed to a standard cup of traditionally brewed coffee.”

Jacobs says at Lettuce Entertain You Restaurants millennials enjoy unique and customized coffee experiences and are always open to try the new and different. “We’re seeing this generation loves the opportunity to control what they’re drinking, how much they’re spending and personalized experiences. Drinks on our menu that are popular include Matcha Lattes, pour-overs with a local coffee roaster, bulletproof coffee and nitro coffee.”

Yale’s Toong says that because this group has been raised on LTOs, it would make sense that experimentation is the rule, not the exception. “Millennials have learned to expect changing options and our students are no different.”

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