How Gen Z Is Fueling the At-Home Coffee Movement

Reporter, Consumer & Social Trends

When the pandemic first hit, Americans had no idea how it would affect their everyday lives. But today, everything from how we interact in the workforce to our daily coffee habits look a bit different, and Gen Z is leading the charge when it comes to these shifting behaviors.

"The 'second space' concept that fueled coffee shops for Millennials is meaningless for Gen Z," Noah Mallin, the chief strategy officer of Gen Z-focused IMGN Media told Newsweek.

"They work and play online as second spaces. Beyond that is part of a larger interest Gen Z has in DIY and sustainability, creating their own controlled experience outside of a corporate chain structure."

The restaurant industry, specifically coffee shops, has been forced to adjust to the coffee habits of the pandemic era, even as stores reopened, and Americans returned to the office as well as their somewhat regular coffee runs.

"Coffee has been a go-to beverage in the U.S. for a very long time, but it has evolved over the last ten years," Darren Seifer, food and beverage industry analyst at The NPD Group, said. "Today's consumers are looking to elevate and personalize their coffee experience with new flavors, recipes, tastes, appliances, and accessories."

In-home coffee consumption is booming, as Americans spend the money they used on daily coffee orders on one-time coffee maker purchases instead. Around 30 percent of remote workers invested in a new coffee machine since the start of the pandemic, according to research from food maker Nestlé USA.

"Consumers' palates are more sophisticated now when it comes to coffee. They've invested their time and money in bringing a gourmet coffee experience into their homes," Joe Derochowski, the home industry advisor at The NPD Group, said in a 2021 report. "Even when they're back to work or school, they'll continue to get a return on their investment."

But the shift toward at-home coffee goes beyond just the ease of popping a pod into your Keurig. Cafes and coffee shops have also raised prices, leading 33 percent of cafe goers to make more drinks at home in order to save money.

There's also been more interest in improving at-home coffee bars, with Gen Z increasingly interested in creating specialty at-home beverages. The generation, which includes people now between 11 and 26 years of age, is largely behind the TikTok hashtags #HomeCoffeeShop and #CoffeeParty.

"What's so fascinating is the coffee ritual, the morning coffee ritual in particular, is one of the toughest consumer habits to change," Mike Van Houten, the leader of the Consumer & Marketplace Insights group for Nestlé USA, told Newsweek. "It's that important to people. So, it's incredible to see many of these in-home behaviors not only sticking but evolving."

In 2020, Americans drank 44.5 billion servings of coffee and spent $2 billion on coffee makers and accessories for in-home coffee experiences, according to The NPD Group.

This was compared to just 6.3 billion visits to order coffee from in-store cafes.

Before the coronavirus hit, consumers got roughly 27 percent of their coffee from cafes and coffee shops. But that number declined rapidly when consumers were shut at home during the pandemic, with 81 percent of their coffee coming from home.

Because they couldn't visit the coffee shops they knew and loved, many consumers opted to recreate the experience, adding espresso machines and specialty syrups and ingredients to their home brew.

Sales of espresso machines, French presses, and cold brew makers climbed by double-digits in 2021, and the trend has continued in the post-pandemic era.

In 2021, coffee orders had declined by 7 percent at food service locations, with visits to coffee houses falling by 6 percent.

And in 2022, the National Coffee Data Trends report found 84 percent of coffee drinkers had coffee at home daily, compared to just 80 percent in January 2020. Consumption of espresso-based beverages also surged by 30 percent since the pandemic, signaling the increased sales of espresso machines at home.

Gen Z and Millennials have been at the precipice of this shift in consumer behavior.

Roughly 65 percent of Millennials said they drank coffee in the past day, according to a Food Institute report in 2021. Meanwhile, 46 percent of Gen Z respondents had at least one daily coffee, a 10 percent boost from 2020.

When it comes to how coffee shops can save themselves and remain relevant in the era of at-home coffee making, specialty may be the answer.

Specialty coffee orders made up 44 percent of orders, according to the NPD group, compared to just 40 percent of regular coffee orders.

"What brings Gen Z back to retail locations, coffee shops or otherwise, is a sense of unique experience and personal touch that transcend corporate sameness," Mallin said.