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Coffee - UK - January 2008

ISSUES IN THE MARKET
Main report themes
Definition
INSIGHTS AND OPPORTUNITIES
Learning from chocolate, tea
Bags no bother
Healthier coffees
FAST FORWARD TRENDS
 TREND 1: CUSTOMIZATION
What's it about?
Observations
What next?
 INSTANT GRATIFICATION
What's it about?
What we've seen
What next?
MARKET IN BRIEF
Posh premium drives value growth
Coffee shops educate
Coffee pods are hot
Connoisseurs
Capitalise on convenience for the future
INTERNAL MARKET ENVIRONMENT
Key points
Coffee shops
Evolving ethics
Figure 1: Agreement with selected lifestyle statements, 2003-07
Figure 2: Selected coffee certification programs
Health issues
Figure 3: A selection of health claims in reference to coffee
Coffee makers sales soar
Figure 4: UK retail sales of coffee makers, by type and volume, 2002-06
Coffee prices
BROADER MARKET ENVIRONMENT
Key points
Increased affluence in the UK population
Figure 5: Changes in socio-economic status, 2002-07 and 2007-12
An ageing population
Figure 6: Changes in the UK population age group, 2002-07 and 2007-12
Households get smaller
Figure 7: Trends in household size, UK, 2002-12
COMPETITIVE CONTEXT
Key points
Coffee on-the-go is buoyant
Figure 8: Market size and forecast of branded coffee shops, at current and 2006 prices, 2001-11
Buzzing
Figure 9: Market values of selected beverage markets, UK, 2003-07
STRENGTHS AND WEAKNESSES IN THE MARKET
Strengths
Weaknesses
WHO’S INNOVATING?
Key points
Coffee getting serious
Figure 10: Number of new UK product launches, by quarter and by claim, Q42005-Q42007
Iced coffee getting hot
Health on the fringes
Premium coffee needs to be easy
Spod the difference
Speciality sachets
Coffee goes seasonal
What’s hotting up elsewhere?
Ready-to-drink redefined
A new angle on health
Chocolate indulgence
Variety samples
Alcoholic flavours offer a more mature twist
MARKET VALUE AND FORECAST
Key points
Full steam ahead
Figure 11: UK retail sales of coffee, by value, 2002-07
Turbulent trading
Figure 12: UK retail sales of instant coffee, by volume, 2000-05
The future
Going green and ethical
More competition from the high street
Future is convenient
 FORECAST
Growth at real prices starts to plateau
Figure 13: Forecast of UK retail sales of coffee, by value, 2007-2012
Slowdown in a mature market
Factors used in the forecast
Figure 14: Forecast of the yearly % growth of coffee shops, attitudes towards fair trade and Third Age population and their effect on take home coffee value (at current prices), 2003-12
SEGMENT PERFORMANCE
Key points
 INSTANT V GROUND
Figure 15: UK retail sales of coffee, by sector, by value, 2003-07
 INSTANT COFFEE
Slowdown of the consumption
Figure 16: UK retail sales of instant coffee, by value, 2003-07
Figure 17: UK retail sales of instant coffee, by sector, by value, 2003, 2005 and 2007
Not so regular
Stuck in freeze-dried
Decaff rethink
Coffee shop speciality
Super premium provenance
Convenience points the way
 ROAST AND GROUND
Figure 18: UK retail sales of roast & ground coffee, by value, 2002-07
Figure 19: UK retail sales of roast and ground coffee, by sector, by value, 2007
Storming pods
Equipment barriers
 READY-TO-DRINK
Figure 20: UK retail sales of ready-to-drink coffee, by volume and value, 2003-07
 BEYOND FAIRTRADE
Figure 21: UK retail sales of Fairtrade coffee, by value, 2003-07
MARKET SHARE
Key points
Kraft closes the gap
Figure 22: Market share of coffee, by manufacturer, by value, 2003-07
Instant – by manufacturer
Figure 23: Market share of instant coffee, by producer, by value, 2003-07
Instant – by brand
Figure 24: Market share for instant coffee, by leading brand, by value, 2003-07
Ground – by brand
Figure 25: Market share for ground/fresh coffee, by brand, by value, 2003, 2005 and 2007
COMPANIES AND PRODUCTS
Café Direct
Douwe Egberts (Sara Lee)
Fine Foods International - The Coffee People
Food Brands Group
Gala Coffee and Tea Ltd
Kraft Foods
Lavazza
Nestlé
 OTHER SUPPLIERS
Emmi UK
Euro Food Brands (Illy Café)
RGB Coffee Limited
Twinings
Own-label
BRAND COMMUNICATION AND PROMOTION
Key points
Instant recognition
Figure 26: Main monitored media advertising expenditure on coffee, 2002-07
Figure 27: Main monitored media advertising expenditure on instant coffee, by top spenders, 2002-07
Ground – wake up and smell the coffee
Figure 28: Main monitored media advertising expenditure on ground coffee, by top spenders, 2002-07
CHANNELS TO MARKET
Key points
Ethical impact
Figure 29: UK retail sales of coffee, by type of outlet, 2005-07
Roast & ground grabs attention
Conservative top-ups
Online usurped
Specialists hold on
THE CONSUMER – COFFEE CONSUMPTION ATTITUDES
Key points
How does it compare with other drinks?
Figure 30: Consumption of selected drinks in the last 12 months, 2003-07
Instant coffee
General consumption
Figure 31: Consumption of instant in the last 12 months, 2003-07
2 million cut down
Instant loses to out-of-home experience
Competing with a cuppa?
Caffeine kicks
Opting out of the buzz
Half caff in the evening for coffee aficionados
Varieties of instant coffee drunk
Figure 32: Varieties of instant coffee drunk, 2007
Choccy mocha
Dairy benefits
Ground coffee
General consumption
Figure 33: Consumption of fresh ground coffee in the last 12 months, 2003-07
Equipment restrictions
THE CONSUMER – COFFEE REPERTOIRES
Figure 34: Type of coffee bought in the last three months, September 2007
Pocket the difference
Figure 35: Number of types of coffee bought in the last three months, July 2007
Pack sizes influence
Coffee riches
Figure 36: Number of types of coffee bought by type bought, July 2007
Standard instant drives the market
THE CONSUMER – ATTITUDES AND HABITS
Key points
Figure 37: Consumer coffee habits and attitudes, September 2007
Spreading the cost of trade up
Instant on standby
Effort barriers
Figure 38: Propensity to agree that ‘it’s worth paying extra for quality coffee at home’, by socio-economic-group, September 2007
Affordable attitudes
Coffee options
Coffee shops develop taste expectations
CONSUMER TYPOLOGIES
Key points
Figure 39: Coffee consumer typologies, July 2007
Indifferents (57%)
Quality Seekers (18%)
Convenience Seekers (14%)
Home Coffee Sceptics (11%)
APPENDIX
Advertising data
Abbreviations
APPENDIX: INTERNAL MARKET ENVIRONMENT
Figure 40: World production of all coffee, 2002-06
Figure 41: Purchased quantities of tea and coffee, grammes per person per week, 1974-2006
APPENDIX: THE CONSUMER – COFFEE CONSUMPTION ATTITUDES
Figure 42: Consumption of instant coffee in the last 12 months, by demographic sub-group, 2007
Figure 43: Consumption of fresh ground coffee in the last 12 months, by demographic sub-group, 2007
THE CONSUMER – COFFEE REPERTOIRES
Figure 44: Type of coffee bought in the last three months by gender, age, socio-economic group, martial status, lifestage, age of children, Mintel’s Special Groups, working status, region, ACORN category, media usage, commercial TV viewing, supermarket used and household size, September 2007
Figure 45: Type of coffee bought in the last three months by gender, age, socio-economic group, martial status, lifestage, age of children, Mintel’s Special Groups, working status, region, ACORN category, media usage, commercial TV viewing, supermarket used and household size, September 2007
Figure 46: Number of types of coffee bought in the last three months by gender, ages, social grade, marital status, lifestage, working status, ACORN category, commercial TV veiwing, region, newspaper readership, supermarket used and age of children in the household, July 2007
APPENDIX: THE CONSUMER – ATTITUDES AND HABITS
Figure 47: Consumer coffee habits and attitudes, by gender, age, socio-economic group, martial status, lifestage, age of children, Mintel’s Special Groups, working status, region, ACORN category, media usage, commercial TV viewing, supermarket used and household size, September 2007
Figure 48: Consumer coffee habits and attitudes, by gender, age, socio-economic group, martial status, lifestage, age of children, Mintel’s Special Groups, working status, region, ACORN category, media usage, commercial TV viewing, supermarket used and household size, September 2007
APPENDIX: CONSUMER TYPOLOGIES
Figure 49: Consumer typologies identified according attitudes towards coffee, September 2007
Figure 50: Consumer typologies by repertoire, September 2007
Figure 51: Consumer typologies by type of coffee bought in the last three months, September 2007
Figure 52: Consumer typologies by gender, age, social grade, marital status, lifestage, age of children in the household, Mintel’s special groups, working status, region, ACORN category, commercial TV viewing, media usage, supermarket used and, household size and car ownership July 2007

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