The Future of Coffee and More Sustainable Coffee Packaging

As we settle into the "new normal", the outlook for the coffee industry is strong. According to the International Coffee Organization, exports in the first four months of Coffee Year 2020/21 (October 2020 – January 2021) increased by 3.7% to 41.88 million bags, compared with 40.38 million bags a year earlier.

In a recent CNBC article, Mintel’s Associate Director of Food and Drink stated that “coffee is one of the categories that is going to see benefits from the pandemic in the short, medium and long term.”

Coffee is a huge and growing market – but how consumers drink it is changing. Around two billion cups of coffee are consumed every day across the world, according to the BCF. Despite ongoing lockdowns prohibiting people from venturing to coffee shops in many countries, people are still seeking their daily cup at home.

This all adds up to a booming opportunity for coffee suppliers, coupled with a rising focus on sustainability. Keep reading to learn about three key trends for the coffee industry in 2021.

1. The rise of eCommerce

Safety concerns and national lockdowns mean that visiting coffee shops is no longer a priority for many consumers. Instead, they are opting for online shopping and brewing more coffee at home – and this trend is here to stay. Accenture research shows that, even in markets where retail is reopening, consumers continue to shop online.

In the UK, for example, grocery retailers sold £24 million more tea and coffee in June 2020 than the same period in 2019, according to Kantar. In the same year, Nestlé reported its strongest global quarterly sales in five years, with its Starbucks, Nescafé and Coffee Mate packaged coffee ranges contributing to 7.4% organic sales growth across its Americas (AMS) business.

As a result of this increased demand, manufacturers are realizing the importance of creating products for at-home coffee consumption. In fact, in July 2020 Nespresso announced plans to invest $170.5 million to increase production at its Romont coffee facility, in line with rising demand.

Even well-known coffee shop brands are pivoting their focus to online. Last year, the international chain Pret a Manger announced partnerships with delivery brands including Deliveroo, Uber Eats and Food Panda to bring its barista coffee and sandwiches directly to people's doors.

For coffee retailers and manufacturers, it’s clear that having an ecommerce play is more important than ever. To win consumer attention in the crowded online market, it’s also important that websites are easily shoppable and that manufacturers make use of social media to engage new audiences.

But winning consumer attention is just half the story. To capture consumer loyalty, the delivery experience also needs to be quick and high quality. Products need to arrive in great condition. This can be challenging – particularly when it comes to fulfilling next-day orders.

During the supply chain process, products may be roughly handled and will not be in an upright position throughout their journey. With this come many more chances for product damage or failure.

Through innovative materials, novel design, and smart solutions, Amcor's ecommerce-ready packaging delivers on customer satisfaction. We also have two ecommerce R&D laboratories, where we test packaging to Amazon’s ISTA 6A standards and many other global testing standards.

This allows our customers to make a quick switch to ecommerce packaging with confidence.

2. Coffee at home becomes a premium experience

There’s hope that, as summer approaches, many European countries’ lockdowns will ease – but, according to Mintel, “many people will continue to work, relax, and entertain at home in the next 12 months.” In line with this, Mintel advises that brands and retailers have an opportunity to create routine experiences for people at home through their products.

Coffee – with its aromatic flavors and association with being a pick-me-up – is well placed to become a daily ritual for many. The key to this is premiumization. Michael Schaefer, Global Lead, Food and Beverage at Euromonitor International, explained: “Premiumization is about bringing this craft-oriented experience to more people by enabling them to recreate it at home. Convenience and accessibility are key, but successful brands also represent quality, expert knowledge and a unique product story.”

To create these premium experiences at home, more people are purchasing coffee machines that use pods to create barista-style coffee. In line with this, Research and Markets expects the European coffee pods and capsules market to witness a CAGR of 6.8% over the forecast period, 2020-2025.

Aluminum, in particular, is considered a premium option for the shelf life of coffee pods as it provides a high barrier for fresher coffee and can be recyclable. Furthermore, aluminium capsules allow for better brand positioning in terms of sustainability and quality.

Amcor is a reference converter of aluminium for coffee capsules, partnering with the main design and IP owners. In 2020, the European Aluminium Foil Association (EAFA) awarded Nespresso® and Amcor the Alufoil Trophy in the Environmental Resource Efficiency category for aluminium coffee capsules.

To create product differentiation and increase consumer appeal, coffee brands can choose Amcor's CapsLid Color solution. This multi-color printed aluminum lidding for coffee capsules is designed to provide the highest standards of safety, in compliance with EU and FDA food contact regulations.

Finally, brands should remember the power of technology to enhance the at-home experience. Thanks to smartphones and QR codes, brands can leverage digital to build relationships with their customers.

Innovations like Amcor’s MaXQ digital packaging system provide brands with a range of tools to do this through personalized, targeted, two-way conversations.

A quick scan of the MaXQ code on a coffee pouch can immediately connect the consumer to a wealth of information about the coffee’s origin, its producers and processing, and its journey to the retailer. And, according to the insights presented in Berlin by the Specialty Coffee Association, 66% of consumers think transparency is one of a brand’s most attractive qualities.

3. Sustainability is king

Consumers are looking to coffee producers not only to deliver on quality, but to minimize their environmental impact while they do it. Our own research shows that only 6% of European consumers are unconcerned about sustainability issues.

Shoppers’ sustainability concerns are causing brands to take action. Starbucks has created its own private standard for more sustainable coffee production: Starbucks’ Coffee and Farmer Equity Practices (CAFE Practices). Similarly, Nestlé has created sustainability guidelines with its Nespresso AAA Sustainable Quality standard.

This year, we will see more coffee drinkers purchase from brands with a strong environmental and ethical story. As well as bolstering their supply chain processes, brands should also directly address the sustainability implications of their coffee packaging.

Using Amcor’s ASSET™ lifecycle assessment service, coffee brands can measure their packaging’s carbon footprint from raw materials through end-of-use. The ‘Reducing CO2 Packaging’ Label from the Carbon Trust can now be printed on Amcor packaging to communicate significant packaging carbon footprint reductions (20% or more).

Amcor has a range of coffee products that are more sustainable. For example, AmLite Ultra Recyclable gives brands the opportunity to use vibrant coffee packaging design, while replacing a polyester (PET) layer with a high-barrier polypropylene (OPP) film that is recycle-ready and reduces carbon footprint by up to 64%.*

Using bio-based materials, such as PE made from responsibly sourced sugar cane, is another way for brands to reduce the carbon footprint of their packaging – replacing fossil fuel based materials with packaging made from renewable resources.

We recently collaborated with the Finnish coffee brand, Meira Oy, for its new coffee range Vallilan Paahtimo. The coffee beans are sustainably grown, single origin and come in Amcor's AmLite packaging made with bio-based PE.

Similarly, Amcor’s Vento coffee packaging is made with an integrated degassing feature, removing the need to apply hard valves to coffee packs, reducing complexity in the filling process and driving down the weight and carbon footprint of the pack.

The key for coffee manufacturers is to ensure they keep pace with these changing consumer preferences and trends - for both their daily cup and the packaging it comes in.

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Curious to learn more about sustainability in coffee packaging? Discover how one of the world’s largest importers of organic and Fairtrade labelled coffee reduced their packs’ carbon footprint by 30%.

If you want to find out more about our more sustainable coffee packaging solutions, please contact us and a member of our team will be in touch. We’re here to help.

*Comparison based on foil laminate PET/Alu/PE to OPP AmLite/PE, assuming 100% recycling of the AmLite pack in a cradle to grave comparison.