June 22, 2015 / 4:07 AM / in 2 years

Americans are drinking less coffee, one K-Cup at a time

NEW YORK (Reuters) - Americans are spending more money on coffee than ever before, but for the first time in six years, they will be drinking less of it as the single-serve revolution transforms the brewing habits of the world’s largest coffee-drinking nation.

A container of coffee is pictured in New York March 11, 2015. REUTERS/Lucas Jackson

Coffee consumption in the United States is expected to fall to 23.7 million 60-kg bags (132.27 pounds) in the upcoming 2015/16 season, down from 24 million bags in the year that ends in September and the first drop since 2009/2010, the U.S. Department of Agriculture (USDA) forecast in its biannual coffee report on Friday.

The nation will be the only one of the top eight global coffee-drinking countries to see a decline in consumption, with overall global demand rising by nearly 2 million bags to 147.6 million bags.

The forecast will upset traders and roasters as arabica coffee futures prices continue to fall amid plentiful supplies.

The report provides further evidence that the growing popularity of single-serve pods, dominated by Keurig Green Mountain’s K-Cups, is having a material impact on U.S. demand for green coffee beans, market participants said.

As Americans shift from traditional roast and ground coffee toward single-serve, they are brewing only what they intend to drink, reducing the amount thrown down the drain.

“People used to make a pot of coffee, now they make a cup,” said Pedro Gavina, owner of Vernon, California-based roaster Gavina & Sons. “Right there we’re losing the sink as a consumer.”

In February, Reuters reported that Americans are buying less coffee as coffee pods increase the efficiency of consumption, limiting the amount of beans roasters will need to buy per consumer.

Ownership of single-serve brewers has ballooned in 2015, with more than a quarter of American households having one, up from just 15 percent in 2014, a National Coffee Association (NCA) survey in March showed.

Single-serve machines have yet to reach a similar level of popularity abroad.

While consumption by volume is falling, Americans spent a record $11.9 billion on coffee in 2014, and are expected to spend $12.8 billion in 2015 and $13.6 billion in 2016, forecasts from market research firm Mintel show. Roasters often charge a hefty premium for single-serve coffee.

In addition to the impact of single-serve, the aging of the population has contributed to a decline in consumption, with Americans drinking 1.85 cups a day, the lowest level since 2010, the NCA survey shows.

Editing by Nick Zieminski

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