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    Coffee, Tea Sales Percolate at Retailer Establishments

    Packaged Facts study shows sales are expected to surpass $18B this year, but market maturity presents a challenge.

    NEW YORK -- Coffee and tea sales continue to percolate at retailer establishments, according to "Coffee and Tea Foodservice Trends in the U.S.," a just-released Packaged Facts study. Sales of coffee and tea at convenience stores, quick-service restaurants (QSRs) and other dining establishments are expected to reach $18.7 billion in 2012, the market research firm said.

    Sales of the beverages -- c-store staples -- rose 11 percent during 2011. Packaged Facts attributed the 2011 increase and expected 2012 brisk sales figures to consumers beginning to eschew the stay-at-home approach brought on by the Great Recession.

    Sales in 2011 were led by Dunkin' Donuts, Green Mountain Coffee Roasters, McDonald's and Starbucks, which each earned more than $1 billion in U.S. coffee and tea revenues.

    Most top coffee purveyors have grown their same-store sales since 2005, led by Tim Hortons, which achieved a 21-percent cumulative increase, according to the data.

    More than half of all Americans drink coffee and/or tea, said David Sprinkle, publisher of Packaged Facts. Some 173.5 million consumers drink tea, while 183 million drink coffee.

    The average price for coffee on restaurant menus has risen 25 percent since 2007, with the highest increase seen at QSRs, the study shows. The price hike is due to operators passing on commodity price hikes to their customers. Tea has been more price stable than its coffee counterpart and therefore, retailers have seen higher margins in tea than in coffee.

    There is perhaps a potential fly in the ointment, however. The U.S. coffee and tea market is so mature that it is difficult to maintain the growth potential, the study concluded. To help counteract its maturity, the research firm recommends that foodservice operators expand the variety of their offerings and occasions for use while converting home-office coffee and tea users into foodservice users.

    As CSNews previously reported, c-store retailers also have been offering fresh food, such as sandwiches and fruit, to help grow their overall foodservice operations.

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