Menu Innovations | December 2012 | By Barney Wolf

Java Jive

Flavors add extra kick to hot and cold coffee beverages.

We love our coffee in the U.S.

Whether the java is hot or cold, plain or flavored, we’re guzzling, sipping, gulping, and otherwise downing north of 400 million cups of Joe every day. In fact, a survey from the National Coffee Association (NCA) indicates that coffee has moved ahead of soft drinks as the most popular U.S. beverage, enjoyed by an estimated 73 percent of consumers at least once a week in early 2012.

Coffee carries a wide range of flavors, depending on the origin of the coffee beans, how they are roasted, and the brewing process. And many consumers want more tastes added to their java, such as sugar, milk, and flavors like vanilla and hazelnut.

“People are enjoying all types of coffee, whether traditional in the morning, gourmet in the afternoon, or cappuccino in the evening,” says NCA spokesman Joe DeRupo. About 60 percent of consumers add some sort of sweetener to their coffee, while 68 percent use some sort of milk or creamer, according to the NCA.

More than 30 million Americans drink specialty coffee beverages daily. This includes gourmet coffee, as well as café mocha, latte, espresso, cappuccino, macchiato, and frozen or iced coffee drinks, which by nature have additional flavors.

“Coffee and flavored-coffee beverages continue to assist the restaurant industry with margins and increasing the frequency of visits, particularly in [the] morning,” says David Morris, managing consultant with Chicago’s Kaleidoscope Research Consulting.

About seven in 10 restaurants feature coffee on their menus, with espressos on nearly 20 percent of menus and lattes on 13 percent, according to NCA data. The increases of latte and cappuccino beverages from 2007 to 2011 were 20 percent and 30 percent, respectively.

“Coffee is still the mainstay, but there is a lot of room for growth for specialty coffee when it comes to menu penetration,” Morris says. More flavors and related options, such as lighter drinks with nonfat milk and sugar-free syrup, add to that potential.

Chocolate and caramel are the two most prevalent flavors in specialty coffees.

Flavored coffee “is an offshoot of the demand for customization and increased options,” says Maeve Webster, director of research firm Datassential. “Customers want to make their own when eating out, whether that’s selecting carriers, ingredients, preparation techniques, or, as in this case, flavoring their coffee.”

A recent consumer survey by Technomic Consumer Research found that the biggest portion of restaurant consumers (38 percent) have coffee at home, but Starbucks claims nearly three in 10 consumers. Dunkin’ Donuts, despite far fewer units, is the go-to place for 13 percent, while McDonald’s claims 9 percent.

Nearly six of 10 specialty coffee drinkers report that they get such beverages primarily from Starbucks. Dunkin’ Donuts and McDonald’s each claim 12 percent.

Most gourmet and premium coffee sold at U.S. limited-service outlets is made with full-flavored Arabica beans, which are cultivated in Latin America, Africa, Asia, and the Arab world. Not all beans are alike, however.

“Coffee might be considered like wine, depending on where the beans were grown and how it’s brewed,” says Greg Ubert, founder and president of Crimson Cup, a Columbus, Ohio–based company that supplies coffee to coffee shops and quick-service restaurants.

Coffees brewed with roasted beans from different regions, even from farms in the same area, “absolutely have different flavors,” he says. “Coffee from Africa doesn’t taste the same as coffee from Indonesia. The beans provide different experiences.” Crimson Cup imports beans from 26 different countries to create its coffees.

Independent coffee shops increasingly are providing customers with coffee made from a wide variety of blends and with beans from specific regions or even individual farms. Many customers are asking for unique coffees brewed one cup at a time.

“More customers are willing to step out and have a single cup, whether we make it in a French press or poured over” the coffee grinds, explains Danny O’Neill, founder and “bean baron” at The Roasterie, a Kansas City, Missouri, company that sells coffee beans and blends to hundreds of coffee shops. It also operates three shops of its own.

Less than 5 percent of the The Roasterie’s regular coffee, derived from 33 nations, has flavor added at its shops. Most of the flavoring is done at the factory, where the roasting is accomplished. “As people’s palates get more sophisticated, they tend to go away from all the added flavors,” O’Neill says.

Specialty coffees are a different story. These drinks, often flavored, are a little more indulgent, and have helped fuel a growing afternoon and evening business.

Starbucks added a range of new flavored products in the past year, including Starbucks Refreshers, made with green coffee extract and fruit juice and initially launched as ready-to-drink retail items. The chain later introduced a pair of handcrafted Refreshers, Very Berry Hibiscus and Cool Lime, in its shops.

Starbucks also grew its popular Frappuccino line of coffee blended with ice and other ingredients. New varieties included Mocha Cookie Crumble and Chocolate Cookie Crumble Crème. The brand also launched a lighter roast coffee, the Blonde Roast, and released Organic Ethiopia Sidamo coffee.

The chain’s baristas can add a wide variety of flavors to coffee and specialty coffee drinks, from familiar ones to seasonal favorites like pumpkin, gingerbread, and mint.

“We know that customers who prefer flavored coffee want a high-quality option,” says spokeswoman Alisa Martinez. “There are more than 170,000 ways baristas can customize beverages at Starbucks, selecting from a variety of fresh dairy and syrup options.”

At Caribou Coffee, customers have confidence in the company to provide new and unique flavors, says Mark Miller, senior manager for product development.

“We are looking for layers of flavor that balance well” with coffee, he explains. For instance, the Minneapolis-based chain has two flavors for the winter holidays, Salted Caramel Budino and Salted Caramel Mocha lattes, that “deliver on all the flavor notes.”

The indulgent beverages presented some difficulties. For example, salted coffee is not a natural pull for consumers. “So we have a textured mixture that really stays together and doesn’t get too salty,” Miller says.

Lattes, which baristas make with espresso and steamed milk, offer a great opportunity for flavor creativity. The same goes for frappes, or foam-covered iced coffee beverages.

During the past few years, Caribou developed a wide range of flavored beverages with its coffee, sourced from Rainforest Alliance Certified farms in about 20 countries. In addition to some holiday favorites—Fa La Latte with eggnog and nutmeg and Ho Ho Mint Mocha—the menu includes Campfire Mocha with marshmallow flavoring, chocolate chips, and more.

A Pumpkin and White Chocolate Mocha was featured in the fall, and other specials have included cherry-infused Black Forest cooler (a thick, coffee-blended drink), Honey Almond cooler, Macadamia Nut and Coconut Mocha, and Lavender White Chocolate Mocha.

“Going forward, I’m looking at experimenting with all types of flavors, maybe a double vanilla,” Miller says. “We could look at something unique, like dessert pear, like double-smoked almond, to bring another subtle flavor that would make the drink more complex.”

Dunkin’ Donuts began as a coffee-and-doughnut shop and has branched out to a full menu. But coffee remains its keystone item, and the company features many different flavors to accent java.

“Customers are mixing two great things, coffee and interesting, unique flavors,” says executive chef Stan Frankenthaler. “They are going down this path of celebration, from seasonal to trendy and even some comfort flavors in their coffee.”

The fall and winter seasons are particularly popular for comforting flavors, such as pumpkin or ginger and spice. The chain featured pumpkin this year. “There is a lot of experimentation in the cappuccino and latte side,” Frankenthaler says. The latte drinker “is looking more for indulgence, more of a treat, than flavored coffee.”

This spring, the chain featured Black Cocoa Crème Iced Coffee, flavored with the taste of cookies and cream. The summer brought a Coolata frozen coffee drink with Oreo cookie crumbles.

Coffee has long been a menu item at quick-service restaurants, but McDonald’s has been at the forefront of upgrading its regular coffee to a premium blend and developing machines to make consistent hot and cold coffee drinks 40 different ways.

The McCafé line includes mochas, lattes, cappuccinos, frappes, and iced coffees. A peppermint mocha will be a special holiday espresso-based beverage. “We can customize it to the customer’s tastes by adding an extra shot of espresso, more milk, or extra vanilla syrup,” explains Marta Feron, McCafé category director.

McCafé coffee has helped McDonald’s remain the quick-service leader at breakfast and grow its business later in the day. “The trend is that coffee drinkers in the morning are coming back for cold coffee in the afternoon, and we are definitely seeing that,” Feron says.

She also says the company is continually attempting to improve and increase its offerings. This year it is upgrading its vanilla flavor to a richer, creamier French vanilla, and the chain has rolled out a new espresso that provides “a more rounded, smoother flavor.”

Coffee is a major item in fast casual’s bakery café segment. Chains like Atlanta Bread are focusing on java to lure coffee drinkers who also want fresh, baked goods to go with it.

“Coffee is one of the most important side things we do,” says Jerry Couveras, president and CEO. “Our pastries are baked fresh, so we brew our coffee fresh as well.”

Last year, the company rolled out its line of Lavazza coffees from Italy, with House Roast, Dark Roast, and Vanilla Nut, as well as decaf versions of House Roast and Vanilla Nut. It also makes specialty coffee items like cappuccino, latte, and café mocha by machine. The chain is launching a Rainforest espresso blend as a new base.

In the long run, “the coffee is what makes the difference, not the added flavors,” Couveras says. “In the old days, coffee was coffee, but that’s not true any more. Customers know the difference between great coffee and the rest.”