Adam Howitt, a 33-year-old British entrepreneur, pecks away on a laptop in the corner of a downtown Chicago Starbucks. He's sipping a tall Sumatra blend, black. He'll drink almost anything when he's out and about, he says, including 7-Eleven's brew. When it comes to coffee at home, he grinds his own Starbucks (SBUX) beans. But he won't go near supermarket brands such as Folgers or Maxwell House (KFT). "There's just no taste comparison between cans and beans," he says. "Cans are just bad."
It's a grind these days for the biggest makers of grocery-store coffee. Procter & Gamble (PG) and Kraft Foods (KFT) are facing sluggish sales for their hallmark Folgers and Maxwell House brews--and the demographics are moving against them. Youngsters drink far less coffee than their baby boomer parents, and, when they do, it's more likely to be on the go. Only 37% of young adults between 18 to 24 drink coffee, compared with 60% for those between 40 and 59 and 74% for Americans over 60, according to National Coffee Assn. data.