SPECIALTY COFFEE BREWS GAINS AS TOTAL SALES FALL;COFFEE MARKET SHARES (CHART)

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While sales continued to decline for regular and instant coffees in 1994, there was spirited growth in the specialty coffee segment. Sales of ground specialty/gourmet coffees reached an estimated $1.3 billion last year and are expected to grow another 23% to $1.6 billion by 1998 to make up about 30% of the total coffee market.

It is estimated the number of domestic coffee bars could grow from 4,500 in 1994 to about 10,000 by 2000. But despite the fact that sipping coffee in a cafe has become a social event for young adults, the 18-to-24 age group made up only 1.3% of the total distribution of take-away coffee consumption. According to the National Restaurant Association, the largest percentage of coffee consumed away from home (45%) continues to fall in the 55-and-older age category. We believe marketers will introduce a combination of new hot and cold ready-to-drink coffee-based beverages in an attempt to capture Generation Xers.

The total market value of the coffee industry rose to $3.96 billion in 1994, from $3.2 billion in 1993, up 23.8%. Retail price increases-as much as 80% to 100%-in response to reported frost damage to crops in Brazil, were sustained for the latter half of 1994 and had a positive impact on annual market value.

However, total U.S. per capita consumption of coffee continued to decline, falling 10.3% from 23.4 gallons in 1993 to an estimated 21 gallons in 1994.

Mr. Maxwell is managing director of the Maxwell Consumer Report, published by Wheat First Butcher Singer, Richmond, Va.

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(CHART)

Coffee market shares

REGULAR COFFEE

Procter & Gamble 1992* 1993* 1994*

Folgers Regular 19.6% 22.5% 22.3%

Folgers Flakes 7.0% 4.6% 4.6%

Folgers Decaf. 4.1% 4.1% 4.2%

Butternut 0.6% 0.6% 0.7%

Maryland Club 0.5% 0.4% 0.4%

Total 31.8% 32.2% 32.2%

General Foods

Maxwell House Reg. 13.6% 14.3% 15.2%

Maxwell House Decaf. 3.2% 3.3% 3.4%

Total Maxwell House 16.8% 17.6% 18.6%

Masterblend 10.4% 9.0% 7.6%

Sanka 0.7% 0.7% 0.6%

Yuban Regular 1.9% 2.1% 2.0%

Yuban Decaf. 0.3% 0.2% 0.2%

Total Yuban 2.2% 2.3% 2.2%

Brim (incl. Max-Pax) 0.2% 0.1% -

Total 30.3% 29.7% 29.0%

Nestle

Hills Brothers 8.3% 7.6% 7.3%

Chase & Sanborn 4.4% 4.5% 4.3%

MJB 3.6% 3.4% 3.4%

Taster's Choice 0.2% 0.2% -

Sarks 0.2% 0.2% 0.2%

Total 16.7% 15.9% 15.2%

Chock Full O'Nuts 3.3% 3.2% 3.0%

Cain's Coffee Co. 0.3% 0.3% 0.3%

Private Brands Inc.-Safari 0.2% 0.2% 0.1%

Total 3.8% 3.7% 3.4%

All others 17.4% 18.5% 20.2%

Grand total 100.0% 100.0% 100.0%

INSTANT COFFEE

General Foods 1992* 1993* 1994*

Maxwell House Reg. 18.8% 17.7% 16.1%

Maxwell House Decaf. 1.9% 2.0% 2.8%

Total Maxwell House 20.7% 19.7% 18.9%

Maxim 0.8% 0.5% 0.4%

Sanka 5.8% 4.8% 4.3%

Freeze Dried Sanka 0.6% 0.5% -

Yuban 0.7% 0.6% 0.5%

Brim 0.1% - -

International Coffees 4.7% 5.2% 0.7%

Total 33.4% 31.3% 31.1%

Nestle

Taster's Choice Regular 10.8% 10.6% 10.5%

Taster's Choice Decaf. 5.3% 5.0% 4.8%

Nescafe Regular 7.1% 7.1% 7.2%

Nescafe Decaf. 2.1% 1.9% 1.8%

Hill Brothers 2.4% 2.4% 2.3%

Chase & Sanborn 2.0% 1.7% 1.1%

MJB

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