Millennials can give java sales a jolt

Restaurants aren’t alone in their struggle to relate to Millennial (ages 18-34) customers. Most industries aren’t sure what makes them tick either, at least when it comes discerning their consumer behavior patterns.

Let’s take a look at some new research that quizzed Millennials about coffee, an important beverage program component at many full-service operations. The study, “Appealing to Young Coffee Drinkers Along Their Maturity Path,” was commissioned by S&D Coffee & Tea and conducted by Chicago-based foodservice research firm Datassential. Its purpose was to identify future growth opportunities for coffee operators by examining coffee usage and attitudes among Millennials. An online survey of away-from-home coffee drinkers provided the data. Datassential also used proprietary information to add perspective to the results.

One key finding is that coffee consumption patterns change as Millennial coffee drinkers age. They typically begin with sweet coffee drinks, then gradually switch to regular hot brewed coffee as they grow older.

It doesn’t take them long to make the move. Young Millennials (18-24) begin switching to the brewed variety three years after they first begin drinking coffee. Older Millennials (25-34) make their transition after five years and the process begins after year eight for Generation X (35-44).  While there is an increase in the consumption of regular hot brewed coffee versus coffee drinks over time, “growth in one doesn’t necessarily directly correlate to diminished consumption or appeal of the other,” the report notes. Millennials and Gen Xers drink plenty of both. Good news; you can sell them both.

A second aspect of the report looked at what Millennials think of when they hear “coffee.”  “For Millennials, ‘coffee’ has become an umbrella term which is inclusive of both regular hot brewed coffee and sweet espresso-based or cold coffee drinks,” the report notes. When survey participant were asked what the term “specialty coffee beverage” meant to them, three factors stood out:

• The beverage has a special name, such latte, mocha, frappe, etc.

• It’s more of a treat or indulgence than a cup of regular coffee.

• It contains additions such as whipped cream, steamed milk, syrups, chocolate pieces or other add-ins.

What’ missing here? Espresso, which the Datassential analysts point out was not the defining factor in what Millennials classify as a specialty coffee beverage. This finding suggests that restaurants that don’t have an espresso machine can still offer specialty coffee items that will appeal to Millennial customers.

“This is an important distinction because it represents evidence to strongly suggest that contrary to traditional belief, specialty coffee is not fundamentally about ‘the bean,’” Datassential analysts explain. “Rather, it is all about ‘the build’ (or more specifically, the sum product of multiple components).” The upshot here: Elaborate descriptions about coffee bean type and coffee bean origin may not drive consumer coffee-purchasing decisions as much we once assumed.

The report looked at how different demographics classify the desirability of brewed coffee by occasion type. Gen Xers think of brewed coffee as a start-your-day beverage more than Millennials do. But Millennials rank it higher across a wider range of occasions: drinking it for refreshment, as a thirst quencher, as an accompaniment to food, on its own as a snack or dessert or as a quick way to satisfy hunger.

If you’re looking for a way to get your coffee program in sync with the habits of Millennial customers, here’s how this report suggests you do it:

“To older consumers who are more likely to have developed their coffee drinking habits via self-brewing in the home, regular hot brewed coffee has gotten lodged under the domain of ‘mundane ritual drink’ with immediate top-of-mind associations being limited primarily to the morning daypart. Meanwhile, younger coffee drinkers (who also define ‘coffee’ through a broader lens which includes all formats—hot and cold, brewed and specialty) have become accustomed to its constant presence infiltrating many different day parts and eating occasions. As such, for the Millennial consumer, coffee (in all of its many forms) has actually come to compete more directly against other beverage types (like juice, water, carbonated soft drinks, etc.)...which is even more reason to target this group.” And don’t forget the big picture. Millennials have become the largest consumer demographic—bigger than the baby boomers—and now account for 21 percent of all consumer discretionary spending. They’re worth going after.