HomeWorld Business Magazine, homeworldbusiness.com | The Newspaper For Housewares Decision Makers

Single-Serve Surge Is A Boon To All Things Coffee

Monday May 28th, 2012 - 10:15AM

So this single-serve coffee thing has legs after all.

It’s rare when a product category is all but monopolized by one company. There is a brewing issue, however, beyond the prospects of the single-serve market substantially supporting multiple appliance and coffee platforms, although that remains an intriguing topic (more on that later).

Are housewares retailers so focused on capitalizing on the single-serve boom that they might be shortchanging an opportunity to expand all facets of their coffee machine business?

It might seem like a no-brainer for retailers to swap flat unit sales of drip coffeemakers at tight margins for increasing unit sales at higher yields from single-serve machines, pre-portioned coffee packs and accessories.

Impressive Achievement 

Single-serve certainly is earning its surging share of the retail coffee market. And it is an impressive achievement for one single-serve platform— Keurig’s— to control by some measures more than 40% of all retail coffee machine dollars. 

There still are plenty of dollars out there going to coffee appliances other than single-serve systems. And suppliers of packaged ground and whole bean coffee aren’t throwing in the towel just yet.

Marketers and merchants of mature coffee brewer segments shouldn’t let themselves be blinded into withdrawal by the high beams of the oncoming single-serve rush. Rather, they should embrace single-serve as a beacon guiding healthy increases in traffic to the overall coffee machine and accessory category.

Some drip coffeemaker and espresso machine marketers, for example, feel the time is right to capitalize on this caffeinated traffic boost with equipment engineered to counter-punch the single-serve segment with precision brewing techniques and robust taste profiles aimed at coffee purists.

Full Potential

Retailers won’t realize the full potential of such development, however, if they are reluctant to support it with high-impact shelf placement and promotion.

Retail shelf allocation in the coffee appliance category could get even trickier in the coming months as the latest wave of single-serve brewer hopefuls— including a certain leading coffee purveyor— encouraged by the more firmly rooted single-serve market jockey for traction where many others before them couldn’t.

Space Commitments

That retailers say they are thirsty for productive single-serve alternatives speaks to their strong desire not to be overly reliant on a single resource— no matter how vital that resource is. Retail success for recent and forthcoming single-serve brewer/coffee combos will rely no less on significant commitments in shelf and promotional space. Where that space comes from is a predicament for retailers wary of tinkering with current single-serve coffee assortments and presentations.

HomeWorld’s annual Coffee & Tea Report in the May 28, 2012, issue examines the impact of the single-serve coffee phenomenon not only on single-serve development but also on the overall coffee appliance and accessory business.

The single-serve category has earned its position as the focal point of today’s home coffee brewing market. It is compelling a fresh wave of collaborative and competitive product and marketing initiatives across the retail small appliance and housewares landscape.

Single-serve coffee is here to stay. Its success is awakening new growth opportunities for all things coffee— even, with a strong blend of innovation and merchandising support, traditional coffee machine segments most impacted by the single-serve surge.

—Peter Giannetti