[1/2]Packs of coffee are seen at a Dollar General store in Norridge, Chicago, U.S., August 24, 2021. Picture taken August 24, 2021. REUTERS/Richa Naidu Acquire Licensing Rights
NEW YORK, Nov 3 (Reuters) - Sales of coffee at grocery stores in the United States, the world's largest consumer of the beverage, fell to below pre-pandemic levels in the year to end-September, according to data from NIQ, as prices continued to increase.
Overall packaged coffee sales fell 3.7% from the year earlier period to 1.13 billion units, the third consecutive annual drop and to the lowest level since 2019.
Coffee prices per unit increased 9.3% in the year to end-September, adding to a 12% rise in the previous 12 months.
"What is going on in U.S. coffee at retail is what is going on in U.S. grocery in general," said Matthew Barry, Insight Manager, Food & Beverage at Euromonitor International.
"Prices have been on the rise for a long time now and that is causing significant pressure on volumes because consumers are cutting back," he said.
Sales of ground coffee saw the largest fall at 5.6%, while coffee pods - a higher priced premium product - fell the least with a 1.4% drop.
However, Jim Watson, Executive Director of Beverage Research at Rabobank, believes the numbers tell only part of the U.S. coffee demand story.
He said an increase in online sales during and after the pandemic does not show up in traditional POS (Points of Sale) tracking.
"E-commerce is growing, coffee pods are taking share of roast and ground coffee, and a higher percentage of coffee pods are sold online," he said.
He also noted an increase in subscription models, where coffee drinkers receive their favorite coffees at home on a regular basis.
Watson expects U.S. coffee demand to rise a little this year, noting that prices have mostly stopped going up.
Euromonitor's Barry said sales at coffee shops also seem to be holding up well.
"Because it is not that much money in the grand scheme of things, those occasions are more protected than bigger splurges might be," he said.
Reporting by Marcelo Teixeira; Editing by Kirsten Donovan
Our Standards: The Thomson Reuters Trust Principles.
Covers agricultural commodities and biofuels, including production, trade and transportation, based in New York. Former Brazil correspondent and climate/environment reporter. Brazilian, holds a Bachelor of Journalism degree and has done post-graduate studies in Environmental Reporting from Germany's InWent Institute and Foreign Policy and International Political Economy from Harvard University. Avid soccer and tennis player.