Coffee has been embedded in cultures across the world for generations. So why does it feel so relevant right now?
Monday, September 29th is National Coffee Day and October 1st is International Coffee Day. The coffee space is so fascinating and rich, and coffee culture is a window into a changing world.
On a macro trend level, coffee sits at the intersection of several changing consumer habits: it has become a priority for people who go out less and are more health conscious; it is being impacted by the creator economy and influencers; and it also has a relationship to international tariffs and a changing global landscape.
Coffee is an extension of who you are; an accessory, if you will. As the one thing we all drink every day, you might say coffee makes the world go ‘round. It gives you energy, peace, and focus. It brings people together, offering powerful human connectivity.
In recent times, there are new forces and players popping into the space, like Chinese brand, Luckin, which has undertaken an ambitious plan to make US coffee more robotic. Then there’s the broista brands like Dutch Bros & 7 Brew labels that want to take functional coffee to a new level by adding protein and other adaptogens.
The shift is forcing the established players to clearly define their respective lanes. Dunkin’ is using Ben Affleck’s creative direction to define their brand, whereas Starbucks brought in a new CEO focused on bringing the coffee house latte experience back to life.
The coffee house is still a place of meeting, work, and communion, often a crucial ‘third space’ beyond the home and office. In South Korea coffee houses are having to stop people from bringing multiple screen office setups. Meanwhile, across the world with the power of social media, younger generations are adopting specialty coffee earlier, giving birth to new innovations, full flavor twists, and the explosion of matcha a cool 1000 years after its discovery.
Retail still wins with in-store experiences, especially when traveling. From city to city, lines are down the block for the cultural staples and trending spots on TikTok. Meanwhile, retail stores continue to elevate their shopping experiences by adding coffee bars to their stores. Brands like Capital One, Uniqlo, and Dior are now using coffee as a tool to drive foot traffic, increase dwell time, generate social media buzz, and enhance brand loyalty in ways that go beyond traditional retail.
Thanks to the boom in the creator economy, there are celebrity coffees taking the game by storm. Although distribution is still extremely powerful, you can whip up a brand in this D2C world easier than ever. From Anthony Kiedis to Green Day to Jadakiss, so many talented musicians are launching a coffee brand with their own spin on it. Personally, I’m here for it. Who better to define the next generation of great brands than the people traveling the world the most? We all love a good ambassador of flavor and storytelling, and between influencers, musicians and celebrities this space has explosive potential.
The Weeknd’s partnership with Nespresso shows that blockbuster partnerships have real legs. As part of the collaboration, vinyls were fabricated using coffee-pressings, a coffee house was erected to highlight Abel’s Sudanese and Ethiopian heritage through regional music, and Amazon was brought in to help scale it. This concept connects customers to The Weeknd’s story in meaningful ways while delivering large out-of-home promotion and distribution.
Covid birthed WFH mania, ushering in a new era of at-home coffee. Beyond the simplistic convenience, home brewers like Keurig continue to make waves with their exclusive brand extensions and flavor profiles, while KDRP’s acquisition of Peet’s puts their at-home coffee portfolio ahead of the class. There are many exciting things in the works!
Nespresso is also seeing solid growth in the first half of the fiscal year, according to Nestlé, the world’s biggest company. The growth was largely driven by broad-based pricing. The brand also saw positive margin development by increasing prices prior to commodity increases. Executives remarked that demand for Nespresso remains strong.
Where we go from here will be very interesting. I love how some folks are using AI to help curate your coffee experiences based on personal data. More partnerships and drops are certainly going to be important.. From coffee house experiences to the explosive rise of functional coffee; from tech-engineered coffee beans to a rising Decaf coffee craze; coffee culture has our attention. Celebrity baristas, coffee tastings, world competitions, eco friendly products and rare beans are also driving engagement.
We went from Espresso Martini to Coffee House Day parties in less than 18 months. We are desperately in need of new IRL connection points, so I know we are going to see more listening sessions and events that revolve around coffee shops and stores. I imagine that sports teams and other cults will soon have their own brews.
Coffee is something we can all agree on and enjoy together. Fanatics Fest nailed it this year in NY with their slogan honoring their Starbucks partnership: “ Fans for life, but coffee first.”
I’d love to see the US adopt daytime rituals on par with the Brits’ high tea or other mid-day, connection-focused cultures in Europe and the East. It’s all been done, just not in our fast-paced, capital-crazed country. As new trends emerge, what’s going to be most important is product + distribution + context. The brand differentiation and the storytelling are most crucial in the current moment. Stunts, events, specialty promotions, original flavoring, timing of brands, sponsorships, partnerships, community, gamification and and even the cup you drink out of have become forms of self-expression.
The marketer in me loves this (*sips and smiles*)