Coffee Waste, Premium Price: Why Starbucks Sold Us on Cascara

I don't know about you, but coffee is one of the constants in my life. Cold brew in the summer, lattes in the winter, and even that over-marketed P.S.-phrase in the fall — I'm about it all. I usually brew at home and take a nice-sized travel mug with me daily to work, but occasionally, I'll hit up Starbucks when I'm running errands during the week. (Weekends are for my beloved local roasters and shops, where I can sip and enjoy my favorite beverage in person without any rush.)

If you've been to a Starbucks lately — some people are anti-Starbucks, which I won't begrudge, especially if they live in Italy — you've probably noticed a newer item floating around the menu: cascara. All I knew about the company's Cold Foam Cascara Cold Brew when I first tried it was that a) it provided me with a nip of sugar and a different type of cream that was welcoming outside of my normal two-cream, no-sugar coffee order, and b) it was absolutely delicious. Introduced in April 2018, the cascara drink has quickly become one of Starbucks' most popular to talk about and review; it's even garnered a 2018 Best Of award from a Thrillist columnist. And for Harry Potter fans out there, some have referred to the sweet whipped-milk cold foam atop the drink as the "Butterbeer" of coffee.

If that hasn't sold you — and I promise I don't work for Starbucks — consider this: if you're concerned with the environment, the cascara you're drinking is actually considered coffee waste. Cascara is the leftover coffee fruit once green beans are harvested, and they often are discarded. Until now, of course, when major coffee manufacturers realized they could be making big money off the coffee byproduct (a recent report by Bloomberg noted that coffee husk is going for nearly five times the price of coffee bean). Teas and carbonated drinks also can be made from cascara, with one startup working on perfecting a more sustainable energy drink.

Not surprisingly, cascara isn't the only product taking the coffee industry by storm. I recently learned more about cascara, along with other opportunities and challenges for coffee producers, while updating global business insights reports on the Coffee & Tea Manufacturing and Coffee Shops industries for my job at Dun & Bradstreet. Here are a few more of my key findings on some trends we've seen over the past year:

Opportunity: Premium Instant Coffee

Coffee manufacturers may want to take advantage of customer loyalty and increased growth in specialty coffee by making more shelf-stable, premium instant coffee brands. Smaller but notable premium coffee brands like Intelligentsia are entering the instant coffee market with crystallized, single-serve packs, the Chicago Tribune reports. Intelligentsia's initial order of the $13 four-packs quickly sold out online, and the company offered limited purchases at its Chicago-area coffee shops. Entrepreneur small-batch coffee processors have developed proprietary ways to freeze-dry and dehydrate coffee to produce a specialty instant brand. Coffee manufacturers may seek to partner with these experts if they choose to introduce their own premium instant coffees. More than half of all coffee consumed in the world is instant, according to Euromonitor International, and global sales have tripled since 2000.

Opportunity: Increased US Coffee, Tea Production

Interest in US-grown tea and coffee may be growing among consumers, prompting producers to invest in crops and manufacturing of their products. In California, farmers are taking advantage of former avocado groves to grow coffee bushes. As tropical climates experience instability, the temperate climate of the US may provide suitable conditions for expanding coffee-growing operations. More US tea growers also are handpicking and hand-processing leaves to create organic, small-batch tea, which may compete with large-scale manufacturers in China, India, and Sri Lanka.

Trend: New Tea Varieties

As more consumers opt for healthier alternatives to sugary sodas and juices, new flavors and varieties of tea may be appealing. According to Packaged Facts, the US tea market is expected to grow to $10 billion in 2022 from $8 billion in 2017, with international tea trends helping to drive that growth. Calming matcha tea is popular in China and Japan, while energy-boosting moringa tea originates in India. Turmeric is becoming a popular additive to tea, and some brands are experimenting with adding vegetables to blends. Meanwhile, Polish tea brand Green Hills offers an alternative to alcohol with its rum-and-honey flavored rooibos tea.

Trend: Coffee Shops Expanding Delivery

Delivery in the restaurant industry, including coffee shops, has increased 20% over the last five years, according to recent research by NPD Group. A key way to expand delivery options is through third-party services. Starbucks recently refocused its delivery plans to revive stagnant sales, especially in the afternoon, according to Nation's Restaurant News. Currently, San Francisco-based courier service Postmates serves 400 markets for Starbucks, and the coffee shop's employees personally deliver to some customers in New York City. Other coffee shops or restaurants serving coffee, including Dunkin', Panera Bread, and McDonald's, are increasing market competition by delivering to customers and experimenting with new products. In its San Diego market, McDonald's is testing cold brew made from Arabica coffee beans, while Dunkin' is investing in new equipment and employee training for its espresso debut.

If you're like me and you don't always love waiting in the drive-thru, you might be thinking of getting a cascara coffee product delivered to you soon — maybe by this afternoon's golden coffee hour? Whether or not Starbucks or your favorite coffee shop delivers in your area, it looks like cascara is here to stay. The last time I ordered a cascara drink, briefly scanning the menu and not seeing it listed, my Starbucks barista assured me: "Oh, it'll never go away. Don't worry."

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Amber Krosel is an editor at Dun & Bradstreet, where she reports on emerging trends in industries including food and beverage, education, and government. Follow Amber on Twitter.

D&B Editorial is an in-house team that creates indispensable company, industry, and IT reports found in D&B Hoovers, First Research, and other D&B products. Industry profiles cover key challenges, trends, and opportunities, while company and CRUSH reports cover strategy, financials, and technology developments.