November 19, 2019
Why Premium Soluble Coffee Can Flourish in the Private Label Market
The private label sector has changed brand management for good. Private label products are created by manufacturers for retailers who then sell them with their own branding. It’s a trend showing dramatic growth in the US, and it goes hand in hand with a demand for higher-quality and ethically sourced products.
Premium instant coffee is a perfect match for this market, as most brands use low-grade beans and poor processing systems. At Buencafé, a team of specialists are here to guide retailers through the process of designing a unique, own-branded product tailored to their needs but produced by us. We only sell 100% Colombian Arabica soluble coffee made with the highest quality production process.
Let’s take a look at the premium soluble coffee market and the opportunities it offers for private labeling.
100% colombian freeze dried cofffee
The Growth of the Premium Private-Label Market
Retailers know that branding is key to increased sales and customer loyalty. This makes private labeling a powerful tool. According to a 2019 report by US market research firm Nielsen, “in U.S. outlets, [private labels] have amassed over $143 billion in sales… a figure that’s up nearly $14 billion since 2015.”
Consumers are looking to private-label ranges in search of better products. US market research firm IRI attributes the growth in consumption of private-label products in 2019 to an increasingly high perception of their quality and flavors, while the Nielsen report found that “premium tiers of private-label products have grown in this time, now representing over 19% of sales… consumers are more willing than ever to foot the bill for the right store-branded products.”
Premium soluble coffee can be perfect for outdoors
Understanding the Premium Coffee Market
Ethically sourced premium coffee is also in demand. Henry Wilson, Founder and CEO of Perfect Daily Grind, says that “consumer interest in single-origin and single-estate instant coffees has grown, which means that there’s a need for transparency in its supply chain.”
There’s ample room for instant coffee in the specialty market. Federico Gómez, Sales Representative at Buencafé New York, explains that “there are specific segments [of the coffee market] that are booming… and instant coffee is [no] exception. Brands are starting to understand that there is a lot of room to grow.”
Similarly, Wilson stresses that there’s an increased demand for “more exotic flavors and processing methods [even] in instant coffees.”
There is strong international demand for instant coffee. For example, it dominates the Chinese market. From November 5–10 2019, Buencafé exhibited at China International Import Expo (CIIE), where there was significant interest in Colombian soluble coffee.
In the US, both specialty coffee and the premiumization of private labels are driven by millennials. The NCA’s National Coffee Drinking Trends 2019 states that millennials “continue to be a formidable force in the coffee market.” Similarly, IRI announced in November 2019 that millennials “demonstrate the highest adoption of private label products, increasing 10% in 2019 from 2018, outpacing their adoption of national brands.”
It’s not just taste that matters to millennials, however. Gomez says that this sector is “looking for transparency, ethically sourced products, and differentiation in the products they take home.” For premium private-label instant coffee to be successful, retailers should pay careful attention to the quality and ethics of the product and the company they partner with.
Why Premium Instant Coffee is an Unconquered Niche
Soluble coffee brands typically use cheap, low-quality coffee and a harsh spray-dried production method that causes the instant coffee to lose many of its aromas and flavors. This leaves consumers thirsty for good-quality, ethically sourced, and convenient coffee with very few options – even though instant coffee makes up one-third of the global retail market.
Premium instant coffee is possible, however. It starts with using high-quality green beans. Buencafé only uses Colombian Arabica. According to The National Coffee Association (NCA)’s 2019 report on the US market, National Coffee Drinking Trends, 65% of consumers believe Colombian coffee “tastes very good.”
Buencafé also freeze-dries its coffee. This better preserves the aromas and flavors of the coffee to create an instant drink that tastes like it was brewed in a coffee shop. Only pure spring water is used, and careful attention is paid to the roasting process.
Since Buencafé is part of Colombia’s National Federation of Coffee Growers (FNC), profits from exports are invested in benefits for the country’s 560,000 Colombian coffee-growing farmers, ensuring their continued growth and welfare. The supply chain is transparent and sustainable.
With 100% Colombian Arabica coffee and the highest quality process available for instant coffee, Buencafé offers a solution for home consumers looking for rich flavors and aromas, ethical sourcing, and all the convenience of a soluble coffee.
A Growing Market
According to IRI, “millennials are moving into higher-spending years, so demonstrating value, quality and innovation will be key to [the] continued adoption [of private-label products].”
For companies keen to grow their brand and customer loyalty, premium products offer a way to capture the attention of the largest consumer group today (by 2030, millennials will outnumber non-millennials by 22 million in the US alone).
With millennials’ desire for premium coffee and convenience, private label instant coffee offers opportunities for growth in a field with few competitors. Buencafé offers private label options for each step of the production process. Retailers can choose from different roasting profiles to shape the flavors and aromas of the coffee, as well as customized packaging and label design, with the possibility of using the Café de Colombia logo. Sustainability and certification labels will also be issued to prove that the product is 100% Colombian Arabica.
Get in touch today to find out more.