According to “Coffee and Ready-to-Drink Coffee in the U.S.,” a just-released report from market research firm Packaged Facts, retail coffee sales reached $7.3 billion in 2011, increasing 17% in 2010. The study claims that the growth comes from four main factors that are driving up coffee prices: rising prices for “green” (raw) coffee beans, “premiumization” of coffee, demand for specialty coffees, and huge growth in single-serve formats.
The trend for single-serve formats like K-Cup now claim 7.5% of retail coffee sales. These packets are typically sold for 65¢ to $1.00, filling a niche between brewing ground beans and buying from coffeehouses. The growth of the trend is why you see the corporate coffee giants of Dunkin’ Donuts and Starbucks with single-cup formats in their stores.