Branded single-serve coffee faces a host of challenges as the market reaches a plateau and more and more private label pods are brought to market, according to Ross Colbert, Managing Director and Global Sector Head – Beverages at Rabobank in New York.
Mr Colbert told C&CI that that private label single-serve offerings are having a major effect on the single serve market as a whole. He says that, as more and more private label coffee companies move into the single-serve segment, so demand for branded single-serve – from well known players such as Keurig – is coming under increasing pressure.
Given that private label coffee is now said to account for in excess of 10 per cent of the global coffee volume, that trend could have important implications for companies such as Keurig and Nespresso, especially given the growing discount-oriented retail environment and the growing preference for pod based, single-serve coffee at affordable price points. The implications for branded single-serve coffee are all the more important given that it is only in the last 3-4 years that the private label single-cup coffee segment has arrived, growing rapidly to become a major force after Keurig’s K-cup patent expired, allowing private label players to pursue private label relationships with retailers.
“Undoubtedly the biggest story in the private label sector at the moment is the growth in demand for single-cup coffee,” said Mr Colbert. “It is having a big impact on single-serve branded players and is slowing down sales of brands like the K-Cup pods.”
For more information see the forthcoming September 2016 issue of Coffee & Cocoa International.