After several years of little growth, the refrigerated coffee creamers market is on an upswing, thanks in no small part to newer-generation products that meet the “clean label" criteria for ingredients. According to a new report from Packaged Facts, U.S. retail sales of coffee creamers is expected to grow from $2.5 billion in 2015 to $2.9 by 2020.
While product development in the coffee creamers realm has centered largely around new flavor varieties, new and novel product formulations with simple ingredients and label claims such as organic, allergen-free, non-GMO and vegan are expected to spur growth. Further boosting dollar sales will be the premium pricing accorded products with the premium ingredients associated with “pure," “real," “natural," and organic foods, according to the report “Refrigerated Coffee Creamers: U.S. Market Trends."
Also benefitting the market is the fact that government-mandated cleaner labels are on the horizon. FDA has given the food industry until June 2018 to phase out partially hydrogenated oils (PHOs), a source of the trans fats that have been linked to heart disease. Coffee creamers are cited by FDA as an example of foods that may contain PHOs.
Though the future outlook is undoubtedly sweet, major players in this segment are already benefitting from a shift to cleaner labels. For example, Nestlé’s Coffee-mate’s Natural Bliss dairy-based line has been especially successful. “Made delicious with ingredients you recognize," Natural Bliss contains just five ingredients: milk, cream, cane sugar, salt and natural flavor. Natural Bliss experienced astronomical sales growth of more than 50 percent between 2014 and 2015, a stunning feat is all the more noteworthy because Natural Bliss was launched in 2011. Nestlé was something of a pioneer in the mass-market clean-label niche, and is now reaping the rewards of its prescience.
“Refrigerated coffee creamers with ‘clean label’ cred are emerging as a formidable force on the mainstream market, as evidenced by the tremendous growth of such products as Nestlé’s Natural Bliss, WhiteWave’s Silk and Califia, whose sales skyrocketed from $500,000 to $5.5 million from 2014 to 2015," said David Sprinkle, research director, Packaged Facts.
One challenge to market growth for refrigerated coffee creamers is competition for share of mug. More consumers use dairy beverages, including milk, cream, and half & half, in their coffee than use packaged creamers. What’s more, a significant percentage of coffee drinkers add plant-based dairy alternative beverages such as soymilk and almond milk instead, and the success of currently available dairy alternative creamers suggests great promise for this niche. Strong growth in the almond milk segment is the single most significant development in market trends. Expansion of the market for plant-based dairy alternative beverages also will be driven by new offerings like cashew milk and hemp milk and combination formulations with such ingredients as chia and quinoa. While creamers have not reached quite this degree of novelty, the fact that the current crop of plant-based creamers are line extensions of plant-based milk beverages is of critical significance. The aforementioned Califia Farms’ Better Half creamer is a nut-based alternative to dairy half & half. Likewise, Coconut Cloud provides the market with a dried coconut milk product that is dairy-free and vegan. Not to be outdone, WhiteWave Foods expanded its creamer offerings under its Silk and So Delicious dairy alternative brands.
In terms of purchasing behavior, Packaged Facts found Millennials are both avid consumers and judicious shoppers when it comes to coffee creamers. They are significantly more likely than average to use commercial packaged creamers, non-dairy cream substitutes, dairy beverages, and/or plant-based dairy alternatives in their coffee. Younger adults also take more factors into consideration when selecting creamer products, and those who don’t buy creamers cite more reasons than the average non-user for their resistance.