Gen Z’s new habits drive coffee reinvention

As we predicted back in 2013, coffee – the original energy drink – is being reinvented for a new generation. The pace of change is accelerating, new types of coffee-based products are proliferating and a brief window of opportunity remains open for innovation.

From “big food” companies like Coca-Cola, Nestle and Danone to small start-ups – companies’ are tapping into this beverage trend and ramping up their investment in coffee. One of the most innovative approaches is the launch in May 2019 by Danone Waters of Volvic Coffee – a new variant of its market-leading Volvic natural mineral water. Debuting in Germany, the brand is scheduled for other markets.

Volvic Coffee is mineral water with a small shot of “organic coffee infusion” (about 2% by volume) and fruit flavour. Sweetened with organic cane sugar (and thus appealing to consumers’ beliefs about the superiority of “natural” sugars), Volvic Coffee is available in three flavours, and free from preservatives, artificial flavours or sweeteners.

The marketing of Volvic Coffee is in the language commonly used to describe coffee varieties. For example, the Arabica and passionfruit-lychee flavour is described as having a “Mild, fragrant taste with a fresh, fruity aroma”.

The launch of Volvic Coffee and other creative new beverage brands is being driven by the changing habits of the youngest consumers.

Family-owned Swedish coffee group Löfbergs (see Case Study in NNB October 2018) was one of the first companies to detect the shift: “We saw that the next generation of coffee drinkers, who are a key target market for us, don’t really drink coffee in the same way that we used to do. So we decided to try something new,” the company told New Nutrition Business

Löfbergs transformed itself from a traditional coffee roaster into a successful supplier of RTD coffee-plus-dairy beverages, winning a second place in the RTD coffee market in Sweden, after Starbucks.

This echoes what is happening in most other food and beverage markets, where younger people are less ingrained in the ritual of drinking coffee hot. In the US, for example, 68% of 18-34 year-olds consume single-serve RTD coffee (in bottles or cans).

Since the 17th century, coffee has been the energy drink for adults (energy and alertness were the benefits promoted for coffee when it debuted in Europe and America 400 years ago). It was also marketed as the first alcohol-free refreshment drink.

Coffee’s historic benefits are just as relevant and important to consumers now as they were then. And coffee has the advantage (whether as beverage in its own right or as ingredient in a snack or a beverage) of being very familiar, well-understood – and can deliver a “feel the benefit” effect.

It’s the “feel the benefit” effect that has made coffee and energy drinks among the most successful beverage categories on the planet – because feeling the energy uplift is what people want most.

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