It's becoming more common nowadays to have your coffee at home before leaving for work. New and elaborated coffee makers are becoming available at major retailers with very attractive prices that will allow you to have a full coffee experience without making long lines, repeating your orders a few times, or returning your drink because it was not what you ordered in the first place. You can get a customized drink especially for you in the comfort of your own home, grind your coffee beans to get a fresher beverage and get off to a great start of your day.
Unfortunately for top U.S. coffee brands, this new phenomenon is hurting the sales and the growth of coffeehouses, since single-serving machines have risen in popularity. According to CNBC, a new study by research firm Mintel shows that over a third of U.S. visitors to coffee shops were more likely to drink coffee at home than at a coffee house in 2012. However, there's a growing Hispanic population with greater spending power that could be the key to unlocking growth in the coffee market. "The growth ceiling is being hit. But suddenly this Hispanic audience who are not only growing in terms of numbers but also growing in terms of incomes are spending more money than before," said Jonny Forsyth, author of the study.
Another study earlier this year by the Association of Hispanic Advertising Agencies (AHAA) revealed that Hispanics with an income above $50,000 a year are in fact increasing, and in the next few years they will become a crucial population segment in the U.S. consumption patterns. The study added that in 2012 there were around 15 million so-called "Upscale Latinos," whose annual incomes were between $50,000 and $100,000 a year, which accounted for 29 percent of the whole U.S. Hispanic population and it is expected that this percentage will double by 2015.
This group of Latinos, younger on average than the rest of the country, 33 years compared to 39 for non-Hispanics, is in a formative stage to establish and assert their identity as consumers. These Upscale Hispanics are controlling $4 out of every $10 that Hispanics in general spend, and they will be an essential component for marketers in general. Nevertheless, in order to attract this new target into their coffee business, there needs to be a change. Hispanics generally get disappointed when entering establishments known for having the coffee that "everyone needs in the morning" because one sip and it is coffee flavored water.
For most Hispanics, American coffee is not really coffee. Ask Sofía Vergara, who's been very vocal about it whenever she visits The Ellen Show. "I am always nervous about this coffee," she said once when Ellen DeGeneres offered the sexy Colombian a cup of Joe. However, she had a surprise, it wasn't American coffee, it was Colombian coffee. After trying it, Sofía said, "It's delicious, the one that was disgusting was the one in the dressing room. You have this little American machine and you put this little fake coffee in a little thing..." Another time, Sofía didn't even had to ask before Ellen brought a man dressed as Juan Valdez carrying a tray with coffee. After she took a sip, she said, "Puro café Colombiano, now we can talk!"
What is this tiny example saying? That there's an issue with flavor, with richness, with quality overall. In order to please the Hispanic population, there needs to be a major change in the way the coffee is sold. For us, coffee is an experience, it's not just getting a caffeine fix to get over with our day. It's about tasting the beans, and enjoying the aroma. Not in watered down 16 oz. cups, but in "fun sized" containers that maybe will have less of the beverage, but will surely boost the senses with just the perfect amount. It's about making this regular habit of drinking coffee into a luxurious moment, a little calm within a hectic day.
And although food and drinks giants have seen the potential in the Hispanic market and have tried to target it with marketing, they will need to add the whole "having a luxurious experience" thing into their marketing mix. Yes, McDonald's has featured adverts featuring Hispanic actors and families and has run charity drives to donate money to programs which benefit Hispanic families, and yes, Dunkin' Donuts has also jumped on the marketing drive launching its first Hispanic-focused campaign in 2012, asking "Qué estás tomando?" or "What are you drinking?" but in order to fully capture this demographic, there's more to be done.
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