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Coffee Conversations: Experiential, sustainable, accessible

Coffee Association of Canada’s annual conference and president Robert Carter, who kicked off the event

Despite economic uncertainty, the outlook for the coffee market in Canada remains positive, but industry needs to address changing consumer needs to sustain future growth.

That’s one of the key messages that emerged from the Coffee Association of Canada’s annual conference, held November 9 in Toronto.

Data-driven presentations provided attendees with a comprehensive look at how changing demographics are impacting coffee sales and how suppliers can adapt and respond to the needs of consumers.

The conference included a few “firsts” – an expanded tabletop exhibit of suppliers and the inaugural “CAC Awards” which included a Lifetime Achievement Award for Mother Parkers Tea & Coffee co-CEOs Paul and Michael Higgins, who are also recipients of Grocery Business’ 2023 Grocery Hall of Fame awards.

More “liquid to lips”

While demand for brewed coffee remains strong, the specialty coffee category continues to grow.

“For us, it’s ‘and’ not ‘or’ so brewed coffee is growing but specialty coffees are growing exponentially,” says Tracey Cooke, senior vice president of marketing and commercialization head of the Centre of Marketing Excellence for Nestlé Canada. She cites the company’s iconic instant coffee Nescafé as an example. “We’re changing how we approach the market and looking at new uses to reconnect the portfolio. For instance, our Nescafe Gold Premium delivered via in-home cups, and we’re also looking at cold brewed options under the Nescafé brand.”

Tracey Cooke, Nestlé Canada

In the grocery retail space, building new experiences with coffee will be a key differentiator, says Alex Green, chief experience officer for Longo’s, who sat on one of the panels with Cooke and Hope Bagozzi, chief marketing officer for Tim Hortons Canada.

He cites Longo’s Aromate Café at the banner’s Leaside store.

“Longo’s incorporates a variety of approaches with coffee but one that has resonated with our guests and something I think will be important for the future is our Aromate Café and the whole bean roasting experience. It’s about a return to local craftsmanship and new experiences. We’re looking at how to build these types of experiences for our guests.”

Alex Green, Longo’s

Tim Horton’s Bagozzi adds that loyalty programs are a way to engage and maintain a dialogue with customers.

“With our app, we’re able to offer customers something new like being the first to have access to a new product and trying something different. It’s about a connection to the customer and providing them with a new experience and keeping them engaged.”

Delving into Data

Economic uncertainty is driving changes in how consumers shop for food and beverage, says Nick Gibson, who oversees strategic insights for CPG small and medium businesses at NIQ.

“Consumers have adopted a range of strategies to manage their FMCG spending,” noting that 92 per cent of Canadian consumers have changed how they have shopped for FMCG to manage expenses and employ on average 4.5 strategies. For example, 37 per cent say they purchase whatever is on promotion, 36 per cent select the lowest priced product, while 33 per cent buy in bulk, monitor the cost of their overall basket of goods and shop more often at discount.

Cheryl Hung, vice president of Dig Insights, adds that brewer ownership shows that consumers have means to trade up. For example, only 25 per cent own a French press, 12 per cent own a bean-to-cup machine and 14 per cent own an espresso machine.

This combined with Dig data about consumers’ perspective on at-home coffee point to the opportunity to grow at-home coffee sales. Close to half of consumers surveyed say coffee fits in well with their morning routine, and 41 per cent say they enjoy making coffee at home.

Hung’s data is further supported by information from IMI International. Vanessa Toperczer, senior vice president of IMI, states consumer habits “are moving away from on-premises occasions towards at-home and on-the-go coffee.” At home consumption has increased 20 per cent versus 15 per cent in 2019 and 32 percent in the car versus 29 per cent in 2019.

Sustainability: “Drinking from a tree”

Consumers are still sensitive to price points because of rising prices and limited household incomes, but as more become of aware of the benefits tied to sustainable coffee, there is a willingness among many – close to 50 per cent according to Dig Insights – to pay more for coffee brands they perceive as environmentally friendly.

The idea of sustainable coffee ties into fairtrade practices. There is a growing movement to ensure that those who grow the beans in different parts of the world are paid living wages and able to help support the communities in which they live, say panelists Christien Parrot, director of sustainability, strategy and implementation for Mother Parkers and Tim Horton’s Bagozzi.

“There are 12.5 million coffee growing families around the world and 80 per cent of farmers are not bringing home a living income,” says Parrott. “We need to support farmers and ensure that in the future we can be drinking coffee from a tree; we need to support a sustainable future for farmers and for our supply chain.”

Christien Parrott, Mother Parkers, and Michael Graydon, FHCP, who both spoke on a panel about government and regulations
Lisa Richardson, Canterbury Coffee and John Pigott, Coffee Club
Luc Chabot and April Cleary, Dairy Farmers of Canada
Lindsay O’Donnell, Anthony An and Christine Cruz-Clarke, Balzac’s Coffee, who was the recipient of the Small Chain Big Impact award.
Tony Chapman, conference host and media personality, and The Food Professor podcasters Michael LeBlanc and Sylvain Charlebois

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