Retail Coffee Sales set to Outpace Food Service

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Retail Coffee Sales set to Outpace Food Service

ROCKVILLE, Md. -- A new report by Packaged Facts found the down-turning economy will have far-reaching impacts on consumers' consumption of premium coffees. While it is likely they will not drop their morning ritual, retailers should be on notice as home-based brewing is forecasted to outpace on-the-go purchases, according to the report.

The study, titled "Coffee in the U.S.: Retail, Foodservice and Consumer Trends," said this trend will benefit retailers selling packaged coffee over the next five years.

The report found that total foodservice and retail coffee sales, driven by rising prices, rose 11 percent to $43.9 billion last year. According to the National Coffee Association, three out of four cups of coffee are already made at home, and until last year, foodservice was increasing its market share.

Foodservice coffee sales grew at a compound annual rate of roughly 10 percent between 2003 and 2007, the report noted. Information Resources Inc. also found sales of packaged coffee in supermarkets, drugstores and mass merchandisers excluding Wal-Mart increased 5 percent during the fiscal year ending April 20, to reach $3.6 billion.

Many retailers are cross-branding and offering premium packaged coffees, a nationwide initiative underscored by the rising number of partnerships with large coffee companies Starbucks and Dunkin Donuts.