Store Brands - May 2018 - 58

CATEGORY INTELLIGENCE COFFEE AND TEA
often private label products follow leading brands
and are differentiated only by price," Gilbert says.
"Aligning unique blends [of coffee and tea] and
attributes with benefits that consumers are seeking is
essential in a differentiated private label program. It's
important to find the white space by understanding
consumers' needs and offering products that are not
widely available."
Gilbert says some retailers strive for
differentiation and exclusivity more than others.
But, he stresses, this doesn't make one retailer better
than the other because it comes down to the role of
the category and the role of the format.
"Some retailers have set up a format to be a
destination category/format by offering unique
SKUs and typically a larger assortment," he adds.

Total Coffee
Private Brands

All Brands

Dollar Sales (in millions)

$1,379.7

$9,634.5

Change vs. Year Ago

+15.8%

+1.6%

Dollar Share

14.9%

100%

Unit Sales (in millions)

212.1

1,326.7

Change vs. Year Ago

+13.1%

-0.3%

Avg. Price Per Unit

$6.75

$7.26

Private Brands

All Brands

Dollar Sales (in millions)

$819.9

$4,031.0

Change vs. Year Ago

+19.49%

+3.15%

Dollar Share

20.34%

100%

Unit Sales (in millions)

98.5

432.7

Change vs. Year Ago

+16.03%

+1.9%

Avg. Price Per Unit

$8.32

$9.32

Private Brands

All Brands

Dollar Sales (in millions)

$91.9

$1,289.3

Change vs. Year Ago

+4.9%

-.40%

Dollar Share

7.1%

100%

Unit Sales (in millions)

38.8

376.0

Change vs. Year Ago

+0.8%

-1.6%

Avg. Price Per Unit

$2.37

$3.43

Single-cup Coffee

Total Tea

Source: InfoScan Reviews, IRI, a Chicago-based market research firm. Total U.S. multioutlet (grocery, drug, mass market, military and select club and dollar retailers) for the
52 weeks ending Feb. 25, 2018.

58

Store Brands / May 2018 / www.storebrands.com

"Whereas other retailers set up their category
or format to be a routine purchase where their
assortment is traditional in nature and follows a
national brand equivalent aspect."
Dockery notes there has been tremendous growth
in the RTD segment, but the most critical factor
that retailers must recognize is that this revenue
is incremental and not stealing dollars from other
category segments.
"As the category grows, so must the amount of
space allocated so as to prevent rampant out of
stocks," he adds. "We continue to see macro trends
that are indicative of future growth of valueadded ingredients, but that has yet to develop to a
meaningful level. Flavors are a significant trend with
opportunities to 'localize' your mix."
Clayton believes private brands are
underdeveloped in the RTD segment, which equates
to opportunity for retailers.
"Iced coffee, cold brew and tea with botanicals are
a few areas to explore," she adds.
There is room for innovation in coffee and tea
through introducing better-for-you ingredients,
different ethnic flavors, more functional benefits
and a focus on more sustainable and transparent
products, Clayton adds.
Organic and clean ingredients continue to be a
driver of customer requirements, Kirby says. "In
addition, customers keep challenging the category to
drive suppliers to reduce caloric and sugar volumes
while increasing protein content," he notes.
Gilbert says consumers want to know that their
coffee and tea is made of fresh ingredients and is less
processed. They also want transparency in the origin
of the product and the production process.
"It's important to communicate what is in the
product and how the products are made," he
adds, noting that descriptors such as "100 percent
single-origin," "organic" and "free-from" will help
communicate the authenticity of the product, while
descriptions such as "freshly roasted," "roasted on
date" or "small batch" will create transparency in the
production process. "Also, using blend names that
include native regional flavors or other geographic
descriptions will help consumers connect with the
products on a more local level," Gilbert says.
Clayton expects to see more "craftsmanship" in
the category, which could mean additional smaller
niche brands.
"As far as private brands, retailers could consider
a more niche label that competes better against the
brands in this space," she adds. "Hy-Vee has started
doing this with their private brand snacks (Peaceful
Piranha) and a few other categories."
As a single-ingredient finished product,


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Store Brands - May 2018 - Cover3
Store Brands - May 2018 - Cover4
https://www.nxtbook.com/nxtbooks/ensembleiq/storebrands_201902
https://www.nxtbook.com/nxtbooks/ensembleiq/storebrands_201901
https://www.nxtbook.com/nxtbooks/ensembleiq/storebrands_201812
https://www.nxtbook.com/nxtbooks/ensembleiq/storebrands_201811
https://www.nxtbook.com/nxtbooks/ensembleiq/storebrands_201810
https://www.nxtbook.com/nxtbooks/ensembleiq/storebrands_201809
https://www.nxtbook.com/nxtbooks/ensembleiq/storebrands_201808
https://www.nxtbook.com/nxtbooks/ensembleiq/storebrands_201807
https://www.nxtbook.com/nxtbooks/ensembleiq/storebrands_201806
https://www.nxtbook.com/nxtbooks/ensembleiq/storebrands_bestpractice
https://www.nxtbook.com/nxtbooks/ensembleiq/storebrands_201805
https://www.nxtbookmedia.com