With the lowest unemployment rate in the past seventeen years at 4.1%, the economy is recovering and increasing consumer's purchasing power (The U.S. economy added 2 million jobs in 2017). With this increase in consumer purchasing power, the US hot drinks market has been growing as well. In 2016, the US market for hot drinks has represented a compound annual growth rate (CAGR) of 5.3%, which represents $17,127.8 million in revenues. As a comparison, the European hot drink market had a CAGR of 2.8%, which equals $52,584 million in revenues. As of 2016, hot coffee accounts for the largest segment in the hot drinks market within the US at 86.5% of the market's total value, which is equivalent to $14,815.1 million in sales. While, hot tea accounts …show more content…
With consumers being more health conscious now than ever, has resulted to them trying to manage obesity and serving sizes. The demand for single-cup brewing systems, like Keurig, has increased due to this trend. Standard fresh ground coffee, the biggest coffee category, has been projected to decline over the next few years. In addition, consumers are starting to become more aware of the health benefits from herbal and green teas, which also helps the hot drink industry grow (Reid, C. D. …show more content…
Lifestyles are becoming busier, more women are entering the workforce and there are an increasing number of single-person households. Thus, convenience product demand is on the rise which leads to more demand fast food stores, like coffee store chains. Due to the changes in the consumer market, I expect there to be a rise of new entrants in the market. Although brand loyalty is high in this market, there can be substantial growth in a new company offering high value boutique coffee. (Resau, K., 2017). If brands differentiate their products, there is room for them to grow and succeed in this