Instant Indulgence
by Julie Cook Ramirez
Seeking to replicate their favorite coffeehouse flavors at home, consumers embrace the diverse creamer category.
There’s no doubt about it — America is a coffee nation. From the venerable Starbucks on every corner to trendy cafes in higher-end bookshops, coffee is everywhere.
Today’s coffees are all about indulgence: Mix in the caramel, the chocolate, the raspberry, the liqueur. And while you’re at it, top it off with whipped cream.
With the coffee craze showing no signs of slowing down, it comes as no surprise that consumers are seeking to replicate their favorite coffeehouse tastes at home. One visit to the coffee aisle in any major grocery store and you’ll find flavored coffee beans from specialty coffee companies, as well as more mainstream coffee makers.
But flavored beans only begin to approximate the coffeehouse experience. For a growing number of consumers, flavored creamers are where it’s at. From mainstream favorites like French vanilla and hazelnut to more exotic fare, such as southern butter pecan, vanilla toffee caramel, dulce de leche and crème brulee, creamer manufacturers have spent the last several years developing and introducing a wide variety of creamers designed to suit just about everyone’s preference.
Consumers are most definitely responding. Sales of refrigerated creamers — which boast the largest number of flavored products — rose 8.4 percent in dollars and 1.5 percent in units during the 52-week period ending November 27, 2005, according to Chicago-based Information Resources Inc. (IRI). That growth is driven almost entirely by flavored products, which account for fully 75 percent of all refrigerated creamer sales, according to Kim Peddle Rguem, marketing manager for Glendale, Calif.-based Nestlé USA Inc.’s Coffee-Mate brand.
By contrast, sales of shelf-stable (powdered) creamers — the vast majority of which are unflavored — rose a mere 0.8 percent in dollars, while falling 4.4 percent in units during the same time period, according to IRI.
While the preference for flavored creamers clearly plays a role, the reasons for the lackluster performance of shelf-stable creamers are numerous, according to Rob Gregg, vice president of marketing and general manager of indulgent brands for White Wave Foods, a Broomfield, Colo.-based subsidiary of Dean Foods, which markets International Delight coffee creamer and Land O’Lakes half & half. One of the key reasons for the shift, Gregg says, is that liquid creamers provide a “smoother, richer, creamier cup of coffee” than do powders.
  $ Sales (In Millions) % Change vs. Year Ago Unit Sales (In Millions) % Change vs. Year Ago
Total Category $551.9 3.3% 285.7 -2.4%
Private Label 244.2 4.9 128.2 -0.3
Land O’Lakes 47.8 10.5 19.3 1.0
Land O’Lakes Ultra Fresh 39.7 4.7 22.5 -2.1
Hood 26.1 -1.9 12.5 -5.8
Garelick Farms 19.6 12.7 9.4 8.4
Nestlé Coffee Mate 14.0 42.8 6.1 34.5
Dean’s 12.4 -1.8 7.2 -8.9
CF Burger 8.3 -0.1 3.4 -4.2
Darigold 7.0 14.1 3.5 3.5
Hiland 6.6 -27.4 4.3 -23.5
* Total sales in supermarkets, drug stores and mass merchandisers, excluding Wal-Mart, for the 52-week period ending November 27, 2005.
SOURCE: Information Resources Inc.
Peddle Rguem agrees, adding that convenience and ease of use have played a big role in the decline of powdered creamers and the ascendance of refrigerated creamers. “With the liquid creamers, people can just pour it in the bottom of a mug and then add coffee on top of it,” she says. “It cools the coffee to a nice temperature, and they don’t even have to stir.”
Generation Gap
Demographic factors are also at play, according to Peddle Rguem, who says shelf-stable creamers are purchased mostly by older consumers, primarily out of habit. When they first started adding cream to their coffee, she explains, powdered products were the only alternatives to milk and cream. Meanwhile, younger consumers have grown up with ready-to-serve products, and are more likely to gravitate toward the pour-and-serve creamers. What’s more, Gregg adds, powdered creamers tend to be less expensive, making them the more economical choice those on a fixed income.
That’s not to suggest that creamer companies are giving up on powdered products. On the contrary, they continue to invest in the segment. Nestlé, whose Coffee-Mate product holds the top spot among both refrigerated and shelf-stable creamers, introduced Latte Creations, a shelf-stable powdered product that delivers “quite a nice head of foam and a milky latte taste profile,” Peddle Rguem says.
But it’s clear their primary focus is on the refrigerated, mostly flavored, end of the business.
In response to growing concerns over the health risks of trans fats, International Delight recently announced the elimination of partially hydrogenated soybean oil from its entire product line, including all sizes of refrigerated creamers and shelf-stable portion control cups.  According to Gregg, the change in formulation not only resulted in a healthier creamer for consumers, but a better-tasting one as well.
Spice of Variety
International Delight also recently unveiled its first co-branded flavor, Hershey’s Chocolate Caramel. The product was originally introduced as a seasonal product, available in portion-control cups in convenience stores and gas station coffee services. According to Gregg, so-called alternate channels, such as convenience stores and gas stations, present an enormous opportunity for companies like International Delight. Not only does it tend to boost overall consumption of its products, but it also creates trial among those consumers who either haven’t tried the brand before or have yet to discover the benefits of liquid creamers.
Likewise, Peddle Rguem says the club channel has become a major focus for Nestlé, which introduced a liquid concentrate Coffee-Mate creamer in Sam’s Club stores. The shelf-stable product comes in a 2-liter pump bottle, making it ideal for use inconvenience stores and small businesses.
In the retail grocery segment, Nestlé has launched a number of rotating and seasonal Coffee-Mate flavors, including Pumpkin Spice, Peppermint Mocha, Toffee Nut, Crème Brulee, Gingerbread and Egg Nog. The company’s most recent promotion encourages consumers to “choose coffee’s next perfect mate” by voting for which indulgent new flavor they would like to see in their grocery store. Their choices are Coconut Cream, Vanilla Chai Spice, Chocolate Orange Truffle and the Hispanic-influenced Tres Leches.
A tie-in promotion with the American Historic Inn Association offers Land O’Lakes half & half consumers the opportunity to win an all-expense-paid trip to one of America’s most romantic bed and breakfasts. According to Gregg, the “Get Away with Your Better Half” sweepstakes is designed to bring some excitement to the somewhat lackluster half & half category and help it to shed its commodity image.
Chelsea, Mass.-based HP Hood sought to add some excitement to the half & half category when it introduced Simply Smart Fat Free Half & Half. Meanwhile, Coffee-Mate became one of just a few brands to sell a flavored half & half by introducing a vanilla variety; other flavors could be in the offing.
Seeking to answer the growing demand for more soy products, Nestlé recently launched two soy-based Coffee-Mate creamers — original and vanilla — regionally in the Pacific Northwest.
“There are people who really like soy products, but there are a lot of people out there who think that soy has a beany taste that’s not very good,” Peddle Rguem says. “We are really trying to shift that paradigm and say, ‘Hey, you can have great taste and get the goodness of soy at the same time.’”  
Julie Cook Ramirez is a freelance journalist based in the Chicago area.
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