A look at what’s brewing in coffee consumption, from specialty drinks to sustainability
It’s a particularly hot moment for coffee in Canada as consumption is up and coffee’s share of the overall commercial beverage category continues to grow. According to Ipsos Food and Beverage Tracker, excluding water, coffee’s share of the commercial beverage category has grown 14% since 2015, with no signs of slowing. The latest numbers from Statista show revenue from coffee purchased from supermarkets or convenience stores in Canada (not including ready-to-drink coffee beverages) amounted to US$3 billion in 2024 and is expected to grow annually by almost 2%.
While brewed hot coffee makes up the majority of the category at 77%, growth has been more noticeable in cold and specialty coffees, driven by gen Zs and millennials, says Mauricio Yin Vieira, vice-president, market strategy and understanding at Ipsos. These younger populations are drinking a lot less coffee than boomers, he says, but their penchant for coffee beverages from foodservice delivery and ready-to-drink items is growing fast enough for retailers to keep on their radar.
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Vieira says gen Zs and millennials are also more motivated by value than older generations who may have more disposable income. “For retailers, I think it’s about finding the balance as you have three generations of consumers looking for different things, so how do you ensure you have everything available in-store,” he says. “And figuring out that value equation for younger cohorts is even more important.”
A quality brew
Darlyn Reyes, senior director, marketing and e-commerce at Zavida Coffee Company, says she is seeing sales go up in value packs and promos, but on the flip side, consumers don’t want to give up “quality or that luxury in-home experience” either. To that end, Zavida offers 40 coffee flavours of which Hazelnut Vanilla is a best seller and Crème Brûlée the fastest growing. The company also launched its variety pack 24 Days of Coffee Advent Calendar for a second year with Nespresso and Keurig-compatible pods to be enjoyed hot or cold. “It’s this idea of crafting fun and giving them something experiential,” says Reyes.
Given that consumers want variety, Reyes says retailers can introduce them to coffee flavours through demos and promotions. “It’s that liquid to lips strategy … and there is more openness to it now [post-COVID],” she says. “Flavour is such a personal thing and to be able to taste something goes a long way.”
The growing desire for a high-quality coffee experience is also driving consumers to purchase more whole beans for at-home brewing, says Teresa Spinelli, owner of Italian Centre Shop in Alberta, noting sales of espresso beans are rising year over year at the chain’s five locations. “We have grinders beside our coffee beans and most new machines have grinders in them,” she says. “We also see coffee bean sales go up at Christmas as people like to bring them as gifts with wine or a panettone.”
Percolating with purpose
One black cloud over coffee, however, is the fact it has the highest environmental footprint of any beverage—even alcohol. “It’s energy-intensive for us to produce, cultivate and ship … and then consumers buy it and plug in a machine that consumes power to brew it,” says Serge Picard, owner of Quebec-based coffee importer Café William. “When you add milk or milk substitutes, it’s off the charts in terms of CO2 gases.”
This growing awareness around coffee’s environmental impact is driving consumers to seek eco-friendly packaging and sustainable sourcing practices such as fair trade and organic or shadegrown varieties that help prevent deforestation. “People are asking questions about where their coffee is coming from and that’s why we sell a lot from local roasters where there is that traceability factor,” says Evan Hall, category manager at Ontario’s Goodness Me! Natural Food Market. “Overall, I feel there is a lot more thoughtfulness lately in what people are buying when it comes to coffee.”
Sustainability—coupled with health concerns around caffeine—is also fuelling the development of coffee alternatives made from plants, herbs and grains requiring less water (e.g. chicory, mushrooms, dandelion or barley). According to data from Mintel, the demand for healthier beverages, including coffee alternatives, has been rising steadily.
Yet, companies such as Café William are proving that making efforts now can do wonders to help ensure coffee’s supply chain (which employs millions of people worldwide) can continue more sustainably in the long-term. As one of the largest importers and roasters of organic and fair-trade certified coffee in Canada, Café William implemented the world’s first hydroelectric coffee roaster in January. It also initiated the first cargo sailboat to carry 72,000 kilograms of coffee beans from Colombia to North America, using half the CO2 of its regular cargo ships.
This article was first published in Canadian Grocer’s December2024/January 2025 issue.
