Americans making more coffee at home

Daily coffee consumption in the United States was steady this year compared to 2008, while the number of people making their coffee at home rose, the National Coffee Association of U.S.A. said on Saturday.

Data from the 2009 National Coffee Drinking Trends survey, which polled more than 3,000 adults in the United States by telephone in January and February, was released at the NCA's annual convention in Boca Raton, Florida.

"Consumers still see coffee as an integral part of their everyday lives," NCA chief Robert Nelson said.

"Even if economic conditions cause some to alter their coffee choices, they are nonetheless continuing to enjoy coffee at levels very much on par with recent years," he said in a release.

Preliminary data showed 54 percent of adults drank coffee beverages daily, compared to 55 percent a year ago. With the margin of error plus or minus 1.6 percentage points, the NCA viewed consumption as statistically flat.

Of the people who said they had drunk coffee the previous day, 83 percent said they had made it at home -- up 5 points compared with year-ago figures.

"The coffee industry as a whole doesn't seem to be suffering at all, seems to be recession resilient," said Mark DiDomenico, director of Customer and Consumer Insights for Sara Lee Foodservice.

"Gourmet coffee is where we saw some of the decline," said DiDomenico, who presented the survey results on the convention's final day.

Daily consumption of gourmet coffee, which includes espresso-based drinks, fell to 14 percent, back to levels seen in 2007, he said. In 2008, this category was at 17 percent.

Another area of decline was from people who said they had drunk coffee within the past week or year. Coffee consumption in these groups fell 3 points to 63 percent and 77 percent respectively.

Those numbers suggest some of the less-frequent coffee drinkers might have stopped, the study said.

The NCA survey has been conducted since 1950 and is the longest available statistical series of consumer coffee drinking patterns, DiDomenico said.

UI study suggests salt might be 'nature's antidepressant

Most people consume far too much salt, and a University of Iowa researcher has discovered one potential reason we crave it: it might put us in a better mood.

UI psychologist Kim Johnson and colleagues found in their research that when rats are deficient in sodium chloride, common table salt, they shy away from activities they normally enjoy, like drinking a sugary substance or pressing a bar that stimulates a pleasant sensation in their brains.

"Things that normally would be pleasurable for rats didn't elicit the same degree of relish, which leads us to believe that a salt deficit and the craving associated with it can induce one of the key symptoms associated with depression," Johnson said.

The UI researchers can't say it is full-blown depression because several criteria factor into such a diagnosis, but a loss of pleasure in normally pleasing activities is one of the most important features of psychological depression. And, the idea that salt is a natural mood-elevating substance could help explain why we're so tempted to over-ingest it, even though it's known to contribute to high blood pressure, heart disease and other health problems.

Past research has shown that the worldwide average for salt intake per individual is about 10 grams per day, which is greater than the U.S. Food and Drug Administration recommended intake by about 4 grams, and may exceed what the body actually needs by more than 8 grams.

Johnson, who holds appointments in psychology and integrative physiology in the College of Liberal Arts and Sciences and in pharmacology in the Carver College of Medicine, published a review of these findings in the July issue of the journal "Physiology & Behavior" with Michael J. Morris and Elisa S. Na, UI graduate students. In addition to reporting their own findings, the authors reviewed others' research on the reasons behind salt appetite.

High levels of salt are contained in everything from pancakes to pasta these days, but once upon a time, it was hard to come by. Salt consumption and its price skyrocketed around 2000 B.C. when it was discovered as a food preservative. Roman soldiers were paid in salt; the word salary is derived from the Latin for salt. Even when mechanical refrigeration lessened the need for salt in the 19th century, consumption continued in excess because people liked the taste and it had become fairly inexpensive. Today, 77 percent of our salt intake comes from processed and restaurant foods, like frozen dinners and fast food.

Evolution might have played an important part in the human hankering for salt. Humans evolved from creatures that lived in salty ocean water. Once on land, the body continued to need sodium and chloride because minerals play key roles in allowing fluids to pass in and out of cells, and in helping nerve cells transfer information throughout the brain and body. But as man evolved in the hot climate of Africa, perspiration robbed the body of sodium. Salt was scarce because our early ancestors ate a veggie-rich diet and lived far from the ocean.

"Most of our biological systems require sodium to function properly, but as a species that didn't have ready access to it, our kidneys evolved to become salt misers," Johnson said.

Behavior also came to play a key role in making sure we have enough salt on board. Animals like us come equipped with a taste system designed to detect salt and a brain that remembers the location of salt sources -- like salt licks in a pasture. A pleasure mechanism in the brain is activated when salt is consumed.

So the body needs salt and knows how to find it and how to conserve it. But today scientists are finding evidence that it's an abused, addictive substance -- almost like a drug.

One sign of addiction is using a substance even when it's known to be harmful. Many people are told to reduce sodium due to health concerns, but they have trouble doing so because they like the taste and find low-sodium foods bland.

Another strong aspect of addiction is the development of intense cravings when drugs are withheld. Experiments by Johnson and colleagues indicate similar changes in brain activity whether rats are exposed to drugs or salt deficiency.

"This suggests that salt need and cravings may be linked to the same brain pathways as those related to drug addiction and abuse," Johnson said.

Starbucks Faces Existential Crisis In Downturn

Most years, Howard Schultz, chairman and chief executive of Starbucks, uses the annual shareholders meeting to introduce a major new product or a cool new piece of coffee-making equipment. Something buzzworthy.

At this year's meeting, held in Seattle on Wednesday, there was nothing in the way of buzz, and Schultz introduced nothing new, except for a focus on "value" and a fresh effort to squash the "myth" that "there is a $4 cup of coffee at Starbucks."

Problem is, it's not really a myth. Some of Starbucks' coffee drinks do cost $4 and even more. But even when they cost less, they are still an extravagance. And in a recession, extravagances are the first thing to go.

These are tough times for Starbucks. It's been closing stores by the hundreds and laying off workers by the thousands. People started skipping Starbucks even before the recession got really bad. Fewer people are going to Starbucks. Same-store sales dropped by 3 percent in 2008. Before that, of course, Starbucks drove its business through expansion. It went way too far, "watering down the Starbucks experience," as Schultz himself once put it, and turning off customers. Now, the recession has thrust Starbucks into an existential crisis -- one that is largely of its own making.

But the company can't afford to stay angsty. It has to work hard to stop customers from fleeing, it has to cut costs, and, to placate shareholders, it has to find new areas of growth.

A major problem for Starbucks is that, these days, you can get a good cup of coffee at a Chevron station. Starbucks' astounding growth -- it was opening eight new stores a day just a couple of years ago -- was possible because of the dearth of good coffee elsewhere.

That's no longer true, and the "Starbucks experience" that Schultz constantly refers to is really all he has to offer. But "experience" (store ambience, personalized service, etc.) is a tough sell during a deep recession, so Schultz is now trying to make the Starbucks experience a "value" proposition. Those two concepts might seem at odds, but so far, anyway, Schultz seems to be pulling it off.

The chain, Schultz promised, will now work to convince people that its coffee drinks aren't so expensive after all. He noted, for example, that half of Starbucks' coffee drinks cost less than $3, and one-third of them cost less than $2. He's right, but that's still a pricey cup of coffee. The mission here is to retain existing customers -- and stop them from fleeing to McDonald's McCafe bars.

The recent introduction of a $3.95 breakfast combo doesn't, as some critics have said, put Starbucks at the level of McDonald's. It's the same stuff Starbucks was already selling but for about a buck less. It does nothing to harm the brand.

Similarly, Via, the chain's "breakthrough" instant coffee product, isn't an example of Starbucks going downscale but of making instant coffee seem upscale. The product is just two weeks old, but the consensus seems to be that while it's not as good as the real thing, it's a lot better than most instant coffees. Via is also clearly a major part of Starbucks' international strategy. People around the world don't look down on instant coffee like Americans do. Globally, instant coffee makes up about 40 percent of the coffee market. Starbucks says it intends to take a big chunk of the $17 billion spent on instant coffee every year.

Indeed, the only way for Starbucks to grow is through international expansion. The company says it plans to open 170 stores in foreign markets this year, particularly in China, Brazil and Russia. Just one-fifth of the chain's sales come from outside the United States.

Chief financial officer Troy Alstead told reporters on Wednesday that the company sees the potential for "much more" growth in China, where it operates 400 stores. As much as Alstead talked up international expansion, the chain's plans have been cut back. Its expansion into India was dropped, he said, after talks with potential partners and franchisees "didn't come together."

Starbucks also was planning to open stores in other new markets, such as Eastern Europe. Now, it is focusing on markets where it already has stores.

Expansion overseas might be a lot easier if Starbucks were to close more stores in the United States. But here, the company's former strength -- growth -- is now its greatest weakness. Starbucks is planning to open 140 new stores in the United States (while closing an additional 200). The trouble is, Schultz isn't about closing stores; he's all about opening them. He may have complained about overexpansion a few years ago, but he was, after all, the company chairman, and a very involved one at that. And the company still hasn't backed off its goal of someday operating 40,000 stores worldwide. If the ubiquity of Starbucks' stateside stores is a major cause of the company's problems, it's hard to figure why Schultz isn't closing a lot more of them.

For Schultz, the next year, at least, will be a balancing act. He'll need to recast Starbucks as affordable without harming its brand of "specialness." He'll need to cut costs while still investing in growth. He'll need to fend off gigantic competitors like McDonald's and Dunkin' Donuts without directly competing on price. And, perhaps most challenging of all, he'll need to persuade people to drink instant coffee.

Casual-dining chains should close a net of 1,200 locations, or about 7%

Casual-dining chains should close a net of 1,200 locations, or about 7 percent of the segment’s capacity, to restore a supply and demand equilibrium with restaurant consumers, said John Glass, a securities analyst at Morgan Stanley.

Glass said Monday that because total traffic counts to casual-dining chain restaurants rose 2.5 percent between 2005 and 2008, while same-store traffic fell 4 percent, and the total number of locations increased by 9 percent, supply had outstripped demand. The segment must shrink from its current 18,000-plus locations to 2005 levels, which was the last time the nearly 17,000 units experienced positive aggregate same-store traffic counts, Glass said.

Closures already have started, he said, but more is needed.

“2008 was the first year in many in which there was no net unit growth in the industry,” Glass said, referring to the casual-dining segment. “That’s a good start, but given that industrywide same-restaurant traffic has been running negative since 2006, it probably isn’t enough.”

He forecast that casual-dining chains would close about 450 locations this year, with no material number of new unit openings, but that the segment still would need to close at least another 750 restaurants in 2010 and beyond. The capacity reduction would improve profitability to near 8.5-percent margins, based on earnings before interest and taxes, he added.

Casual-dining chains have been the hardest hit within the restaurant industry during this economic downswing, as the segment's higher price points and much older brands contributed to declining sales. The largest failure in the sector came when Bennigan’s owners filed for Chapter 7 liquidation last summer. Brinker International Inc., parent to 1,500 restaurants under the Chili’s Grill & Bar and other casual-dining brands, closed 47 restaurants in the fourth quarter of last year and said it would close an additional 35 locations this month. Ruby Tuesday Inc. said it would close nearly 10 percent of its 714 domestic corporate restaurants, with about 40 locations closed during its February-ended third quarter and another 30 units slated to close. Including franchised and international locations, the Ruby Tuesday system totaled about 942 locations.

For the fourth quarter of last year, average domestic same-store sales fell 7 percent among casual-dining chains operated by public restaurant companies, according to Nation’s Restaurant News research.

Glass’ study did not include independent casual-dining restaurants. It used population growth and expected changes in per-capita consumption to figure excess capacity and the number of closures that would be required to restore equilibrium. Two best- and worst-case scenarios also were built.

The worst case assumed that per-capita consumption falls to 20 times per year in 2009 and 2010, leading to a needed unit-count reduction of 2,358 units, or 13 percent of the sector. Conversely, the best-case scenario assumes that per-capita consumption increases to 23 times per year, which would require little to no capacity reduction. Glass noted that per-capita annual consumption during the past six years has ranged from a high of 22.5 in 2006 to a low of 21.8 in 2003, according to NPD Foodservice data.