Price is a consideration for 64% of coffee buyers, reflecting the array of choice available for shoppers in this highly competitive market. With the UK entering into a recession in 2020, however, this is likely to become more of a determining factor as people look to tighten their purse strings, with 44% saying a lack of funds would prompt switching to a cheaper coffee brand.

The boost to the retail coffee market brought about by the nationwide lockdown is expected to continue as consumers face further restrictions, are encouraged to work from home and are keen to save money on non-essentials. A reluctance to visit foodservice venues has also boosted the market. The expected shift towards more home working long term will see more at-home coffee occasions going forward, which should continue to fuel the premiumisation trend.

As a ‘new normal’ is reached, competition from out-of-home coffee occasions will return, although to a lesser extent than previously. Furthermore, the recession and income squeeze will see consumers looking to make easy savings in their grocery shops, dialling up the need for coffee brands at retail to prove their value proposition.

The continuing consumer focus on health provides opportunities for the category to tap into. Coffee featuring indulgent flavours, for example, inspired by treats or coffee-shop style favourites offers an alternative way to treat oneself, with 19% drinking coffee as a treat. Meanwhile, that 29% state they drink coffee to relax or de-stress offers scope for brands to bolster their links to emotional wellbeing, pertinent in the context of the pandemic.

Key issues covered in this Report

  • The impact of COVID-19 on the coffee retail market

  • Launch activity and opportunities for 2020

  • Frequency of usage of coffee

  • Reasons to drink coffee and factors influencing choice

  • Consumer behaviours and attitudes related to coffee

COVID-19: Market context

The first COVID-19 cases were confirmed in the UK at the end of January, with a small number of cases in February. The government focused on the ‘contain’ stage of its strategy, with the country continuing to operate much as normal. As the case level rose, the government ordered the closure of non-essential stores and foodservice venues on 20 March.

A wider lockdown requiring people to stay at home except for essential shopping, exercise and work ‘if absolutely necessary’ followed on 23 March. Measures began to be relaxed in May 2020, with coffee shops such as Starbucks reopening from 21 May. Pubs, restaurants, hotels and hairdressers were able to reopen on 4 July.

The government had to halt its September 2020 campaign encouraging workers back into offices; instead, asking people to work from home where possible in September 2020 following a rise in cases. It also introduced a “rule of six” as part of measures intended to halt the rise in cases. It applies both indoors and outdoors and to all ages in England – although there are some exemptions, such as workplaces and educational settings.

Economic and other assumptions

Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its July 2020 Fiscal Sustainability Report. The scenario suggests that UK GDP could fall by 12.4% in 2020, recovering by 8.7% in 2021, and that unemployment will reach 11.9% by the end of 2020, falling to 8.8% by the end of 2021.

The current uncertainty means that there is wide variation on the range of forecasts, however, and this is reflected in the OBR’s own scenarios. In its upside scenario, economic activity returns to pre-COVID-19 levels by Q1 2021. Its more negative scenario, by contrast, would mean that GDP does not recover until Q3 2024.

Products covered in this Report

This Report covers coffee consumption in the retail market only. Therefore, it excludes coffee shops or other outlets where coffee is purchased and drunk outside the home. Sales through vending machines and self-serve coffee outlets are also excluded.

The following broad segments make up the coffee retail market:

  • Instant coffee – this is where, through various processes, coffee is dehydrated into the form of powder or granules for sale, and prepared by adding these to hot water.

  • Roast and ground – this is when coffee is sold in the form of coffee beans or when the coffee beans are sold ready-ground.

  • Coffee pods feature pre-packaged ground beans sold in their own filter to make the coffee-making process easier. Included in this category are products for open and closed coffee systems, such as those that take a cartridge or pod. Sales of Nespresso are excluded from the market size.

  • The market definition includes decaffeinated coffee.


RTD coffee drinks, such as Starbucks Frappuccino and ready-to-drink cold-brew coffee, are excluded from Mintel’s market size figure for retail coffee but are discussed in the Launch Activity and Innovation and Consumer sections of this Report where relevant.

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