Spilling the beans: as consumers brew more at home, coffee and RTD coffee innovate to stay competitive.(Category Focus)(Company rankings)

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"THE BEST PART OF WAKING UP IS FOLGER'S IN YOUR CUP" IS A TAGLINE recognized by many consumers, and that home-brewed concept seems to be especially popular this year. Instead of venturing to a local coffee shop for a morning cup of joe, nowadays the consumer is brewing more at home. The trend is occurring due to the recession, which has caused thrifty consumers to think twice about spending on higher-priced coffee-shop coffees.

"Consumers are brewing more at home to save money," says Garima Goel-lal, senior beverage analyst at Mintel International, Chicago. "Ground coffee companies are definitely trying to attract consumers who are trying to get away from a more expensive format. The brewing at home trend will likely remain, at least in the short term."

And the numbers don't lie. According to Information Resources Inc., Chicago, ground coffee sales increased 6.5 percent, earning more than $2.4 billion for the 52 weeks ending Oct. 4 in supermarkets, drug stores and mass merchandise outlets. Folger's ground coffee topped IRI's ground coffee list by a landslide, earning $676.6 million, increasing sales nearly 53 percent.

To stay competitive, well-known coffee shops such as Starbucks Coffee Co., Dunkin Donuts, Peet's Coffee and Seattle's Best decided to sell their branded beans at retail outlets. Starbucks and Dunkin Donuts took the No. 4 and No. 5 spots, respectively, on IRI's top ground coffee sales list. Dunkin Donuts ground coffee fared well at supermarkets, drug stores and mass merchandise outlets earning $133.2 million, an increase of 46.7 percent vs. the prior year.

As more and more branded coffee products show up at retail locations, …