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09/15/2022

Coffee-loving Canadians want more innovative, sustainable brews

From whole beans and next-level offerings to dessert-inspired varieties, here's how coffee companies and retailers are helping consumers discover new reasons to love java
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Canada is mad for coffee. In fact, it is the only non-European country to place among the world’s top 10 coffee-drinking nations. And Canadians consume more coffee than tap water, to the tune of US$18 billion a year, according to Statista’s figures.

At Italian Centre Shop (with locations in Edmonton and Calgary), shoppers can find more than 100 brands of coffee. Keeping pace with current tastes means constant updating of its coffee roster, according to company president, Teresa Spinelli. “Our customers are always looking for something new,” she says. Knowledgeable staff are on-hand to guide them to the store’s latest offerings.

In-store cafés at Italian Centre Shop are an effective sales driver with customers able to try coffees before buying an entire package. Serving novel twists on coffee beverages demonstrates new ways to enjoy it, from slushy drinks to lattes with Nutella. Products – most sourced from Italy and other European countries – are placed strategically near the cafés. 

Coffee sales have resisted seasonality at Italian Centre Shop, explains Spinelli. It sells throughout the year and growth has been steady over the last two years. She finds many shoppers buying organic coffee or whole beans to grind at home, while millennials gravitate to more acidic brews. Looking ahead, she hopes to welcome brand ambassadors from coffee brands to do in-store sampling and encourage trial.

Manufacturers are looking to innovation to attract customers. Lavazza has seen substantial growth over the last five years, going from a $25-million brand to a $45-million one. “Canada has a vibrant coffee culture and premium coffee is becoming more important every year,” says Andrea Chiaramello, head of Lavazza Canada. “The younger generation is looking for coffee innovation, especially in the iced/cold brew formats.” He notes Canadians between the ages of 17 and 49 are major consumers of specialty coffee, with consumption among millennials and gen-Zs growing by 5% to 6% every year. 

Chiaramello points to an expansion of formats, innovation in single-serve options, and a focus on non-dairy substitutes (such as almond, oat or rice milk) for espresso-based and cold brew beverages as the trends to watch. He suggests retailers stay on top of emerging trends in the category and make room on their shelves for innovative products.

Conscientious consumers want to know about the origins of their coffee. “More than ever, the value of advocating sustainable products, as well as respect for the environment and coffee workers is essential,” says Chiaramello. For this reason, he believes demand for organic and sustainable products will continue to rise creating the perfect environment for innovation. “Although costs of these products are higher, they meet the expectations of consumers, who are ready to pay more,” he says.

Canadians are also looking for new ways to elevate their coffee drinking. “Consumers are reproducing the coffee shop experience at home and experimenting with new textures, flavours and diving into the world of specialty coffee,” explains Shilpa Khandelwal, director insights & innovation, Keurig Dr Pepper Canada. In fact, out of the average 2.7 cups of coffee consumed daily, premium coffee represents 2.2 of those cups, showing Canadian consumers are experimenting with specialty coffee experiences at home.

As inflation continues, at-home coffee consumption remains more affordable than the out-of-home experience, creating a unique opportunity for retailers to capture those occasions. To do so, Khandelwal says retailers should take a balanced portfolio approach by leveraging brands, pack size and innovations to meet consumer needs. The café-at-home trend is also impacting sales of single-serve brewers, now a bigger segment than traditional drip coffeemakers.

Flavoured coffees continued to steam ahead. Keurig Dr Pepper Canada has seen category growth of 25% in two years. “Van Houtte has a leadership position in flavoured coffee,” Khandelwal explains. “Over the past year, it has expanded its flavoured coffee lineup by introducing a spirit and dessert-inspired indulgence roster, which includes Irish cream, Amaretto, Belgian Chocolate and Dulce de Leche.” The brand also launched an instant coffee, ticking those convenience and versatility boxes for consumers. 

Consumers are “looking for high quality, rich tasting and aromatic coffee,” notes Khandelwal. “No longer is it restricted to only a cup of coffee in the morning; coffee is being consumed across many occasions in the day. Canadians love their coffee.

This article was first featured in Canadian Grocer’s August issue.

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