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    Dairy Foods & BeveragesNew Dairy Products

    Dairy Market Trends

    June 1, 2009


    Over the years, coffee drinkers have remained loyal to their refrigerated caffeine kicks, mainly because ready-to-drink coffee fits into the always-on-the-go lifestyle that many Americans lead today.

    That, and it sure beats standing in long lines at Starbucks or Dunkin’ Donuts.

    However, data shows that while consumers are loyal, the category fails to attract a broader audience of coffee drinkers.

    According to Information Resources Inc., a Chicago-based market research firm, ready-to-drink coffee quarterly sales settled at $3 million for reported period ending December 2008, up from $2.8 million in September 2007. But sales dipped from the $3.5 million sales figure reported for September 2008.

    IRI results also show that sales have only increased 3% since last year, unlike the 24% to 52% increases the category has seen over the past year or so.

    Contrasting to the competition, cappuccino and iced coffee rakes in more than $226.4 million, while ready-to-drink refrigerated coffee lingers at a lonely $13 million.

    Bolthouse Farms stands in the lead with nearly $8 million in sales, according to results, followed by Caribou Coffee at $2.6 million and Bolthouse Farm’s Perfectly Protein coffee line at $1.7 million. Trailing at less than $100,000 is private label, Mr. Brown and Havana.

    Likewise, the ready-to-drink tea category also cools up to similar sales results, though far stronger overall than coffee and a category that continues to be a lucrative enterprise for dairy processors.

    IRI data illustrates that while the category fairs better than coffee by bringing in $71.2 million in sales – a more than $68 million difference – numbers have dropped nearly $12.9 million since September 2007.

    Companies like Turkey Hill Dairy carry the category at $81 million with its line of diet decaffeinated and flavored iced teas offered in Lemonade, Orange, Peach, Raspberry, Southern Brew Extra Sweet and Unsweetened varieties.

    Private label comes in second at $53 million, trailed by one of the oldest tea companies in the nation, Red Diamond (bottled by several dairies in the country), at $40.2 million.

    At the bottom of the teacup are Minute Maid, Arizona and Pom Wonderful’s light tea line offered in Wildberry White, Orange Blossom Red and Hibiscus Green varieties.

    While consumers are getting their coffee to go, they may not necessarily be looking in the refrigerator aisle for that quick pick-me-up. Tea is another story, despite the recent slip, and based on our contact with dairy processors committed to the category, sales will likely rise with summer temperatures.

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