Table of Contents
Introduction
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- Definition
- Excluded
- Abbreviations
Executive Summary
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- The market
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- Figure 1: UK retail sales and forecast of coffee, by value, 2009-19
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- Figure 2: UK retail sales of coffee, by coffee type, 2011-13
- An ageing population brings opportunities and challenges
- Companies, brands and innovation
- Nestlé’s longstanding brands are struggling
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- Figure 3: Leading brands’ sales and shares in the UK retail coffee market, by value, 2013/14*
- Coffee is second only to CSDs in terms of adspend among non-alcoholic drinks
- Private label and pods fuel coffee NPD
- The consumer
- There are now as many people drinking coffee in the UK as tea
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- Figure 4: Frequency of drinking coffee at home, by type, April 2014
- Micro-ground instant is successfully carving out an image of indulgence and quality
- Dessert-flavoured coffee offers real potential
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- Figure 5: Selected attitudes towards coffee, April 2014
- Pod machines continue to find their way into UK homes
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- Figure 6: Ownership of coffee pod machines, April 2014
- For those who don’t want to buy a machine, hassle and space constraints are key reasons
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- Figure 7: Reasons for not purchasing a coffee pod machine, April 2014
- What we think
Issues and Insights
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- The UK is a nation of coffee drinkers – The challenge is getting them to trade up
- The facts
- The implications
- Falling prices should fuel growth in the coffee pod market
- The facts
- The implications
- Coffee can borrow from bakery and other indulgent categories
- The facts
- The implications
Trend Application
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- Fauxthenticity
- Life Hacking
- Generation Next
Market Drivers
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- Key points
- The market will benefit from an ageing population, but certain formats face challenges
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- Figure 8: Trends in the age structure of the UK population, 2009-14 and 2014-19
- Drought in Brazil drives wholesale price of beans up
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- Figure 9: Monthly average cost of coffee beans in Europe, by bean type, January 2012-May 2014
- Figure 10: UK retail price index for tea, coffee & other hot drinks, and soft drinks, January 2009-April 2014
- Rising consumer confidence brings opportunities and challenges for coffee
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- Figure 11: Financial health index, January 2009-June 2014
Strengths and Weaknesses
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- Strengths
- Weaknesses
Who’s Innovating?
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- Key points
- New entrants set to weaken Nespresso’s grip on pods
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- Figure 12: New product launches in the UK coffee market, by format, 2011-13
- Ground coffee launches have been driven by private label
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- Figure 13: New product launches in the UK ground coffee market, by private label v branded, 2009-13
- Micro-ground offers scope to halt the decline of instant coffee
- The UK coffee market lacks flavour innovation
- Innovation themes from around the world
- European retailers introduce Nespresso-compatible own-brand capsules
- Innovative approaches to convenience in ground coffee
- Functional coffee is niche, but it may have a role to play
Market Size and Forecast
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- Key points
- Coffee market value growth is expected to slow
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- Figure 14: UK retail sales of coffee, by value and volume 2009-19
- Volume sales set for more moderate growth than over 2009-14
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- Figure 15: UK retail sales of coffee, by value, 2009-19
- Figure 16: UK retail sales of coffee, by volume, 2009-19
- Forecast methodology
Segment Performance
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- Key points
- Weak performance of instant and ground segments slows overall coffee market growth in 2013
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- Figure 17: UK retail sales of coffee, by coffee type, 2011-13
- Pods continue to shine, but still account for less than 10% of value sales
- Premium proves successful
Market Share
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- Key points
- Nestlé’s core brands struggle while its other brands perform well
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- Figure 18: Leading manufacturers’ sales and shares in the UK retail coffee market, by value and volume, 2012/13 and 2013/14
- Figure 19: Leading brands’ sales and shares in the UK retail coffee market, by value and volume, 2012/13 and 2013/14
- Carte Noire helps Mondelēz avoid losing further market share
- Own-label is the biggest loser
- DE Master Blender and Mondelēz merger set to pose a serious threat to Nestlé, EU approval permitting
Companies and Products
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- Mondelēz
- Background
- Recent activity
- Product range and innovation
- Marketing and promotion
- Nestlé
- Background
- Recent activity
- Product range and innovation
- Marketing and promotion
- Lavazza
- Background
- Recent activity
- Product range and innovation
- Marketing and promotion
- Douwe Egberts (DE Master Blenders)
- Background
- Product range and innovation
- Marketing and promotion
- Taylors of Harrogate
- Background
- Product range and innovation
- Marketing and promotion
Brand Advertising, Perceptions and Social Media
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- Key points
- Coffee adspend bucks the trend in the wider non-alcoholic drinks market
- Campaigns from Douwe Egberts and Taylors of Harrogate in 2014 are reducing market’s reliance on Nestlé and Mondelēz
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- Figure 20: Above-the-line advertising spend on coffee, by advertiser, 2011-14
- Nestlé and Mondelēz continued their head to head in micro-ground instant
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- Figure 21: Above-the-line advertising spend on coffee, by brand, 2011-14
- Brand perceptions
- Key brand metrics
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- Figure 22: Key brand metrics, May 2014
- Brand map
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- Figure 23: Attitudes towards and usage of brands in the coffee sector, May 2014
- Correspondence analysis
- Brand attitudes
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- Figure 24: Attitudes, by coffee brand, May 2014
- Brand personality
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- Figure 25: Coffee brand personality – Macro image, May 2014
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- Figure 26: Coffee brand personality – Micro image, May 2014
- Brand usage
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- Figure 27: Coffee brand usage, May 2014
- Brand experience
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- Figure 28: Coffee brand experience, May 2014
- Social media and online buzz
- Social media metrics
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- Figure 29: Social media metrics of selected coffee brands, July 2014
- Coffee brand mentions are low
- General coffee discussion is significantly higher
- Online giveaways are important
- Online mentions
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- Figure 30: Share of conversation of selected coffee brands, by week, 30 June 2013-28 June 2014
- Online giveaways make impact
- Nescafé’s wider usage inspires greater natural conversation
- Topics of discussion
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- Figure 31: Topics of discussion around coffee, 30 June 2013-28 June 2014
- Different topics spoken about in different places
- Type of coffee is most spoken about topic
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- Figure 32: Share of conversation, by type of coffee, 30 June 2013-28 June 2014
- Brazil is most spoken about country of origin
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- Figure 33: Top five countries spoken about in reference to coffee origin, 30 June 2013-28 June 2014
- Conversation proportion remains static
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- Figure 34: Percentage of coffee conversation around selected topics, by week, 30 June 2013-28 June 2014
- Where people talk about coffee
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- Figure 35: Where generic coffee conversation happens, by type of website, 30 June 2013-28 June 2014
- Figure 36: Percentage of brand conversation on different categories of internet site, 30 June 2013-28 June 2014
- Analysis by brand
- Carte Noire
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- Figure 37: Topic cloud around mentions of Carte Noire, 30 June 2013-28 June 2014
- Nescafé
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- Figure 38: Topic cloud around mentions of Nescafé, 30 June 2013-28 June 2014
- Figure 39: Online mentions, discounting competitions and giveaways, 30 June 2013-28 June 2014
- Kenco
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- Figure 40: Topic cloud around mentions of Kenco, 30 June 2013-28 June 2014
- Douwe Egberts
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- Figure 41: Topic cloud around mentions of Douwe Egberts, 30 June 2013-28 June 2014
- Nescafé Azera
The Consumer – Usage of Coffee
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- Key points
- Coffee becomes the UK’s hot drink of choice
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- Figure 42: Frequency of drinking coffee at home, by type, April 2014
- Micro-ground is appealing to both standard instant drinkers and those drinking more expensive coffee types
- While usage of coffee pods is increasing, they remain far from an everyday choice
The Consumer – Perceptions of Different Types of Coffee
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- Key points
- Quality and indulgence are key attributes seen to differentiate micro-ground from standard instant
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- Figure 43: Qualities associated with different types of coffee, April 2014
- Perceived lack of convenience may be hampering micro-ground and pods
- Coffee beans/ground coffee has succeeded in becoming the ‘aspirational’ format
The Consumer – Attitudes Towards Coffee
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- Key points
- The ‘Waffogato’ may be a novelty, but dessert-inspired coffee sparks real interest
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- Figure 44: Attitudes towards coffee, April 2014
- The UK may be a nation of coffee drinkers, but few come across as connoisseurs
- The coffee shop experience built the Starbucks and Costa brands, but that doesn’t automatically translate to packaged coffee
The Consumer – Ownership of Coffee Pod Machines
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- Key points
- Almost half of coffee drinkers have or are interested in a coffee pod machine
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- Figure 45: Ownership of coffee pod machines, April 2014
- Cost of pods is a barrier at all income levels, but cost of machines matters less for high earners
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- Figure 46: Reasons for not purchasing a coffee pod machine, April 2014
- Perceived lack of convenience is a key barrier for marketers to address
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- Figure 47: Reasons for lack of interest in coffee pod machines, April 2014
Appendix – Market Size and Forecast
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- Figure 48: Best- and worst-case forecasts for retail sales of coffee, by value, 2014-19
- Figure 49: Best- and worst-case forecasts for retail sales of coffee, by volume, 2014-19
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Appendix – Brand Advertising, Perceptions and Social Media
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- Figure 50: Brand usage, May 2014
- Figure 51: Brand commitment, May 2014
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- Figure 52: Brand diversity, May 2014
- Figure 53: Brand satisfaction, May 2014
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- Figure 54: Brand recommendation, May 2014
- Figure 55: Brand attitude, May 2014
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- Figure 56: Brand image – Macro image, May 2014
- Figure 57: Brand image – Micro image, May 2014
- Figure 58: Share of conversation of selected coffee brands, by week, 30 June 2013-28 June 2014
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- Figure 59: Topics of discussion around generic coffee, 30 June 2013-28 June 2014
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Appendix – The Consumer – Usage of Coffee
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- Figure 60: Type of coffee drunk at home, by frequency, April 2014
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- Figure 61: Frequency of drinking standard instant coffee at home, by demographics, April 2014
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- Figure 62: Frequency of drinking ground coffee at home, by demographics, April 2014
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- Figure 63: Frequency of drinking coffee made using whole beans that I grind at home, by demographics, April 2014
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- Figure 64: Frequency of drinking coffee made with coffee pods at home, by demographics, April 2014
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- Figure 65: Frequency of drinking chilled ready-to-drink coffee at home, by demographics, April 2014
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- Figure 66: Frequency of drinking decaffeinated coffee at home, by demographics, April 2014
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- Figure 67: Frequency of drinking instant cappuccinos/latte/mocha coffee at home, by demographics, April 2014
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- Figure 68: Frequency of drinking micro-ground instant coffee at home, by demographics, April 2014
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- Figure 69: Frequency of drinking other coffee types at home, by demographics, April 2014
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Appendix – The Consumer – Attributes Associated with Different Types of Coffee
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- Figure 70: Attributes associated with different types of coffee, April 2014
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- Figure 71: Most popular attributes associated with standard instant coffee, by demographics, April 2014
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- Figure 72: Next most popular attributes associated with standard instant coffee, by demographics, April 2014
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- Figure 73: Other attributes associated with standard instant coffee, by demographics, April 2014
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- Figure 74: Most popular attributes associated with micro-ground instant coffee, by demographics, April 2014
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- Figure 75: Next most popular attributes associated with micro-ground instant coffee, by demographics, April 2014
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- Figure 76: Other attributes associated with micro-ground instant coffee, by demographics, April 2014
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- Figure 77: Most popular attributes associated with coffee beans/ground coffee, by demographics, April 2014
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- Figure 78: Next most popular attributes associated with coffee beans/ground coffee, by demographics, April 2014
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- Figure 79: Other attributes associated with coffee beans/ground coffee, by demographics, April 2014
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- Figure 80: Most popular attributes associated with coffee pods for machines, by demographics, April 2014
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- Figure 81: Next most popular attributes associated with coffee pods for machines, by demographics, April 2014
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- Figure 82: Other attributes associated with coffee pods for machines, by demographics, April 2014
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- Figure 83: Most popular attributes associated with ready-to-drink coffee, by demographics, April 2014
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- Figure 84: Next most popular attributes associated with ready-to-drink coffee, by demographics, April 2014
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- Figure 85: Other attributes associated with ready-to-drink coffee, by demographics, April 2014
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- Figure 86: Attributes associated with different types of coffee, by type of coffee drunk at home – Any coffee usage, April 2014
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- Figure 87: Attributes associated with different types of coffee, by type of coffee drunk at home – Standard instant coffee, April 2014
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- Figure 88: Attributes associated with different types of coffee, by type of coffee drunk at home – Ground coffee, April 2014
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- Figure 89: Attributes associated with different types of coffee, by type of coffee drunk at home – Coffee made using whole beans that I grind at home, April 2014
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- Figure 90: Attributes associated with different types of coffee, by type of coffee drunk at home – Coffee pods, April 2014
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- Figure 91: Attributes associated with different types of coffee, by type of coffee drunk at home – Chilled ready-to-drink coffee, April 2014
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- Figure 92: Attributes associated with different types of coffee, by type of coffee drunk at home – Decaffeinated coffee, April 2014
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- Figure 93: Attributes associated with different types of coffee, by type of coffee drunk at home – Instant cappuccinos/latte/mocha coffee, April 2014
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- Figure 94: Attributes associated with different types of coffee, by type of coffee drunk at home – Micro-ground instant coffee, April 2014
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- Figure 95: Attributes associated with different types of coffee, by type of coffee drunk at home – Other coffee types, April 2014
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Appendix – The Consumer – Attitudes Towards Coffee
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- Figure 96: Consumer attitudes towards coffee, April 2014
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- Figure 97: Most popular consumer attitudes towards coffee, by demographics, April 2014
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- Figure 98: Next most popular consumer attitudes towards coffee, by demographics, April 2014
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- Figure 99: Other consumer attitudes towards coffee, by demographics, April 2014
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Appendix – The Consumer – Ownership of Coffee Pod Machines
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- Figure 100: Ownership of coffee pod machines, April 2014
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- Figure 101: Ownership of coffee pod machines, by demographics, April 2014
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- Figure 102: Reasons for lack of interest in coffee pod machines, April 2014
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- Figure 103: Most popular reasons for lack of interest in coffee pod machines, by demographics, April 2014
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- Figure 104: Next most popular reasons for lack of interest in coffee pod machines, by demographics, April 2014
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- Figure 105: Other reasons for lack of interest in coffee pod machines, by demographics, April 2014
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- Figure 106: Reasons for not purchasing a coffee pod machine, April 2014
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- Figure 107: Most popular reasons for not purchasing a coffee pod machine, by demographics, April 2014
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- Figure 108: Next most popular reasons for not purchasing a coffee pod machine, by demographics, April 2014
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