Market Trends of United States Coffee Pods And Capsules Industry
Increasing Usage of Single-serve Coffee in Households
In the case of coffee, convenient forms, like coffee pods and capsules, are becoming popular among the masses (especially in North America and Western Europe) to prepare good coffee in the comfort of a home in a short duration of time. Additionally, a growing number of consumers are willing to purchase coffee machines to recreate the coffee shop experience at home. Players are introducing coffee pods compatible with popular machines, such as Keurig and Nespresso, to exploit this trend.
In response to propelling single-serve coffee demand, the active market players are launching different types of coffee and pods, such as lattes and cappuccinos, to penetrate this highly potential segment of the market. Across the supermarkets, drugstores, and select dollar chains nationwide, popular brands include Keurig Green Mountain, Starbucks, Folger Coffee Co., and Kraft Heinz Co.
According to Intelligent Blends, a single-serve beverage market player, as of April 2022, more than 25 million Keurig and K-Cup brewers were installed in homes and offices across the United States, with millions more being sold yearly. Across the United States, there is a huge demand for single-serve coffee pods and capsules. Consumers across the region tend to prefer coffee pods and capsules from well-established brands due to various factors like brand familiarity, credibility, etc.
For instance, according to Beverage Industry Magazine, with overall sales of more than USD 1.2 billion in 2022, Keurig Green Mountain topped the single-cup coffee market in the United States. While private labels witnessed the second-highest sales figures that same year, totaling approximately USD 1.1 billion. Therefore, the increased usage of single-serve coffee in households is driving the market in this region.
Expanding Popularity of Specialty and Organic Coffee Pods and Capsules
Installing coffee machines and increasing coffee bars across the United States are increasing the demand for coffee capsules and pods. Due to the rapidly growing coffee shop culture, fresh-ground coffee pods are set to register substantial growth in volume and value terms during the forecast period. Nevertheless, sustainability remains essential for buyers and retailers, and certification of organic nature is no longer an option but a requirement.
Also, consumers, who are well aware of the industry, are demanding traceability in the value chain. Signature blends are a growing trend in coffee capsules, carefully selected coffee from various origins. They cater to specific consumer tastes and communicate balance and quality.
Furthermore, health awareness among educated consumers with comparatively strong consumption preferences is boosting the purchase of K-cup pods and capsules from specialty stores. Coffee chains like Starbucks have been developing their coffee culture by increasing the number of regional specialty stores. Additionally, the expansions aid the market players in catering to the demand for specialty coffee among consumers as well as increasing their market shares.
For instance, the number of Starbucks outlets across the United States has been increasing over the past few years. As per Starbucks, the number of the company's stores increased from 15,444 in 2021 to 15,873 in the year 2023. Additionally, organic food and beverage demand has grown substantially over the past few years.
As per the Organic Trade Association, the retail sales of organic beverages, including coffee, will be valued at USD 2 billion in 2021. Hence, the demand for organic coffee/specialty coffee is expected to drive the market studied over the forecast period. Another innovation making a wave is the introduction of a bio-compostable material (PLA) for manufacturing compostable coffee capsules, which is a viable solution to the increasing environmental issues. These innovative, organic, and specialty coffee are expected to help premium coffee and pods sales during the forecast period.
