Table of Contents
Overview
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- What you need to know
- Products covered in this Report
- Excluded
Executive Summary
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- The market
- Coffee pods lift volumes while inflation boosts values
- Modest volume growth ahead, with inflation set to continue
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- Figure 1: Forecast of UK retail value sales of coffee*, 2013-23
- Dominant instant coffee segment bolstered by inflation
- Value growth slows for coffee pods
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- Figure 2: UK retail value sales of coffee, by segment, 2016-18
- Uncertainty around the future of the UK economy
- Growth in pod machine ownership stagnates
- Companies and brands
- Nestlé returns to growth in instant coffee
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- Figure 3: Leading brands’ share of value sales in the UK retail instant coffee market, 2017/18*
- Taylors maintains lead in ground coffee and coffee beans
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- Figure 4: Leading brands’ share of value sales in the UK retail ground coffee/coffee beans market (excluding coffee pods), 2017/18*
- Coffee pods attracts most NPD
- Uptick in coffee mix launches
- RTD coffee is a hotbed of launch activity
- Above-the-line adspend falls
- Social aspects of coffee drinking celebrated in campaigns
- L’OR and Taylors campaigns emphasise flavour and expertise
- Nescafé’s lead is rooted in a strong positive image
- The consumer
- Four in five Brits drink coffee
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- Figure 5: Types of coffee drunk, June 2018
- Figure 6: Drinking of standard and decaffeinated coffee, June 2018
- Instant coffee remains dominant
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- Figure 7: Frequency of drinking coffee, by type, June 2018
- Milk/cream is the most common coffee addition
- Half of coffee drinkers sweeten their brew
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- Figure 8: Coffee additions, June 2018
- The wider environmental impact of packaging warrants discussion
- Home-brewing cold brew garners interest
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- Figure 9: Behaviours relating to coffee, June 2018
- More guidance is needed on caffeine
- Reusable coffee pods could help tackle environmental concerns
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- Figure 10: Attitudes towards coffee, June 2018
- Low usage underpins weak perceptions of RTD coffee
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- Figure 11: Qualities associated with chilled ready-to-drink coffee, June 2018
- What we think
Issues and Insights
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- Green credentials of packaging warrant attention also in the coffee category
- The facts
- The implications
- Cold brewing can open new usage occasions for coffee
- The facts
- The implications
- Reusable pods could polish green credentials of pod machines
- The facts
- The implications
The Market – What You Need to Know
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- Coffee pods lift volumes while inflation boosts values
- Modest volume growth ahead, with inflation set to continue
- Dominant instant coffee segment bolstered by inflation
- Value growth slows for coffee pods
- Uncertainty around the future of the UK economy
- Growth in pod machine ownership stagnates
Market Size and Forecast
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- Inflation sees values grow ahead of volumes
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- Figure 12: UK retail value and volume sales of coffee*, 2013-23
- The future
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- Figure 13: Forecast of UK retail value sales of coffee*, 2013-23
- Figure 14: Forecast of UK retail volume sales of coffee*, 2013-23
- Forecast methodology
Market Segmentation
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- Inflation boosts value growth for instant coffee
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- Figure 15: UK retail value and volume sales of coffee, by segment, 2016-18
- Ground coffee and beans remain a growth area
- Strong but slowing value growth continues for coffee pods
Market Drivers
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- Future of the UK economy remains uncertain
- Income squeeze eases
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- Figure 16: Annual percentage change in CPI and AWE (regular pay), monthly basis, January 2012-April 2018
- Competition from coffee shops remains strong
- Coffee retail sales should be supported by aging population
- Coffee drinking is now on par with tea
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- Figure 17: UK household purchase volumes of tea and coffee, 2000-16/17
- Ownership of pod machines plateaus
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- Figure 18: Coffee pod machine ownership, June 2018
Companies and Brands – What You Need to Know
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- Nestlé returns to growth in instant coffee
- Taylors maintains lead in ground coffee and coffee beans
- Coffee pods attracts most NPD
- Uptick in coffee mix launches
- RTD coffee is a hotbed of launch activity
- Above-the-line adspend falls
- Social aspects of coffee drinking celebrated in campaigns
- L’OR and Taylors campaigns emphasise flavour and expertise
- Nescafé’s lead is rooted in a strong positive image
Market Share
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- Nestlé reverses its fortunes
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- Figure 19: Leading brands’ sales and shares in the UK retail instant coffee market, by value and volume, 2016/17 and 2017/18
- JDE sees mixed performances from its brands
- Carte Noire sales fall ahead of its licence moving over to Lavazza
- Taylors maintains lead in ground coffee and coffee beans
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- Figure 20: Leading brands’ sales and shares in the UK retail ground coffee/coffee beans market (excluding coffee pods), by value and volume, 2016/17 and 2017/18
- Own-label continues to gain share
Launch Activity and Innovation
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- Coffee pods continue to attract NPD
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- Figure 21: Share of new product launches in the UK retail coffee market, by format, 2014-18
- Nestlé relaunches Nescafé Gold range
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- Figure 22: Relaunched Nescafé Gold range, 2017
- Figure 23: Share of new product launches in the UK retail coffee market, by top 10 companies (sorted by 2017), 2014-18
- JDE launches luxury brand L’OR in the UK
- Kenco range is extended
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- Figure 24: JDE launched in the coffee market, 2017 and 2018
- Lavazza reintroduces Carte Noire instant coffee
- CaféPod unveils bold new identity and goes beyond pods
- Organic and Fairtrade coffees launched by Rombouts
- Change Please gains listings in Sainsbury’s
- Tassimo and Nespresso ramp up the treat factor
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- Figure 25: Indulgent launches in the UK coffee market, 2017
- New brands dip their toes into coffee
- RTD coffee is a hotbed of launch activity
- Nescafé unveils Azera Nitro
- Kenco launches RTD and iced coffee mixes
- Alpro enters RTD chilled coffee category, coffee soda launched by Sandows
Advertising and Marketing Activity
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- Above-the-line spend continues to decline
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- Figure 26: Total above-the-line, online display, and direct mail advertising expenditure on coffee, 2014-18
- Nestlé cuts spend but continues support across coffee portfolio
- Lavazza and Nescafé Gold celebrate the social aspects of coffee drinking
- Lavazza sings an ‘Ode to Coffee’ for its ‘Born Social’ campaign
- Nescafé Gold spotlights on the “moments that matter”
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- Figure 27: Total above-the-line, online display, and direct mail advertising expenditure on coffee, by top four advertisers, 2014-18
- The morning remains at the centre of Nescafé Original campaigns
- Flavour and expertise at the centre of L’OR and Taylors campaigns
- JDE shifts spend to ‘gold standard’ L’OR
- Kenco plays up its expertise with the ‘Cofficionado’
- Patrick Stewart narrates Taylors of Harrogate’s journey into flavour
- Nespresso transform aromas into melodies
- Nespresso shifts focus onto its farmers and sustainability
- Lavazza invites four young people on a journey to discover sustainable coffee
- Percol opens “the world’s most sustainable coffee shop” pop-up
- Nielsen Ad Intel coverage
Brand Research
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- Brand map
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- Figure 28: Attitudes towards and usage of selected brands, June 2018
- Key brand metrics
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- Figure 29: Key metrics for selected brands, June 2018
- Brand attitudes: Nescafé excels on trust and value
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- Figure 30: Attitudes, by brand, June 2018
- Brand personality: Tassimo stands out as fun
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- Figure 31: Brand personality – macro image, June 2018
- Taylors of Harrogate and Lavazza lead on connoisseur
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- Figure 32: Brand personality – micro image, June 2018
- Brand analysis
- Taylors of Harrogate has the strongest premium image
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- Figure 33: User profile of Taylors of Harrogate, June 2018
- Nescafé’s lead is rooted in a strong positive image
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- Figure 34: User profile of Nescafé, June 2018
- Low usage limits strength of views on Nespresso
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- Figure 35: User profile of Nespresso, June 2018
- Kenco is seen as the most ethical brand
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- Figure 36: User profile of Kenco, June 2018
- Lavazza is seen most widely as sophisticated, stylish, and authentic
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- Figure 37: User profile of Lavazza, June 2018
- Tassimo is seen as the most innovative, fun brand
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- Figure 38: User profile of Tassimo, June 2018
The Consumer – What You Need to Know
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- Four in five Brits drink coffee
- Instant coffee remains dominant
- Milk/cream is the most common coffee addition
- Half of coffee drinkers sweeten their brew
- The wider environmental impact of packaging warrants discussion
- Home-brewing cold brew garners interest
- More guidance is needed on caffeine
- Reusable coffee pods could help tackle environmental concerns
- Low usage underpins weak perceptions of RTD coffee
Coffee Drinking at Home
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- Four in five Brits drink coffee
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- Figure 39: Types of coffee drunk, June 2018
- Instant coffee remains dominant
- Affluent consumers are most likely to use ground coffee and beans
- Coffee mixes and RTD coffees most popular among the young
- Coffee from pods is drunk by 15%
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- Figure 40: Frequency of drinking coffee, by type, June 2018
- One in five drink decaf coffee
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- Figure 41: Drinking of standard and decaffeinated coffee, June 2018
What Brits Add to Their Coffee
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- Most people drink their coffee with additions
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- Figure 42: Coffee additions, June 2018
- Milk/cream is the most common coffee addition
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- Figure 43: Examples of coffee products highlighting suitability with milk, 2017/18
- Figure 44: Examples of milk and cream marketed for coffee drinks, 2016-17
- Half of coffee drinkers sweeten their drink
- Opportunities for less bitter coffees to highlight their credentials
Coffee Behaviours
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- Packaging waste draws attention also in the coffee category
- The wider environmental impact of packaging warrants discussion
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- Figure 45: Refill instant coffee products highlighting green packaging credentials, 2017-18
- UK plastic collection system poses a challenge to recycling
- Compostable packaging explored internationally
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- Figure 46: Examples of US coffee products with compostable packaging, 2018
- Figure 47: Behaviours relating to coffee, June 2018
- Interest in home-brewing cold brew opens new occasions for ground coffee
- US offers inspiration for cold brew focused NPD
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- Figure 48: Launches of cold brew coffee products in the US market, 2017-18
Attitudes towards Coffee
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- More guidance is needed on caffeine
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- Figure 49: Attitudes towards coffee, June 2018
- Coffee pods’ green credentials spark widespread concern
- Reusable coffee pods garner interest
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- Figure 50: Bluecup refillable Nespresso-compatible capsules, 2018
Qualities Associated with Chilled RTD Coffee
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- Low usage dilutes perceptions of RTD coffee
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- Figure 51: Qualities associated with chilled ready-to-drink coffee, June 2018
- Positive associations are strongest, but not overarching
Appendix – Data Sources, Abbreviations, and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Forecast methodology
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- Figure 52: Total UK retail value sales of coffee*, best- and worst-case forecast, 2018-23
- Figure 53: Total UK retail volume sales of coffee*, best- and worst-case forecast, 2018-23
Appendix – Market Share
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- Figure 54: Leading manufacturers’ sales and shares in the UK retail instant coffee market, by value and volume, 2016/17 and 2017/18
- Figure 55: Leading manufacturers’ sales and shares in the UK retail ground coffee/coffee beans market (excluding coffee pods), by value and volume, 2016/17 and 2017/18
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Appendix – Launch Activity and Innovation
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- Figure 56: Share of new product launches in the UK retail coffee market, by branded vs private label, 2014-18
- Figure 57: Share of new product launches in the UK retail coffee market, by launch type, 2014-18
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- Figure 58: Share of new product launches in the UK retail coffee market, by top 10 claims, 2014-18
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