Table of Contents
Executive Summary
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- The market
- Falling prices see coffee volumes grow ahead of values in 2018 and 2019
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- Figure 1: UK retail value sales of coffee, 2014-24
- Further modest volume growth expected going forward
- Instant coffee remains dominant
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- Figure 2: UK retail value sales of coffee, by segment, 2017-19
- Household incomes are up but future remains uncertain
- Companies and brands
- Nescafé’s sales dip, Kenco grows
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- Figure 3: Leading brands’ sales and shares in the UK retail instant coffee market, by value, 2017/18 and 2018/19
- Taylors retains top position by value in ground coffee/coffee beans
- Environmentally friendly claims rise further
- Nestlé moves into coffee bags, organic and plant-based
- Rise in above-the-line spending in 2018
- 2019 themes range from curiosity to authenticity and coffee bags
- The consumer
- Four in five adults drink coffee
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- Figure 4: Types of coffee drunk at home in the last month, June 2019
- Favourite brand matters to half of coffee drinkers, ethical to one in four
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- Figure 5: Factors considered most important in coffee, June 2019
- One in three are interested in coffee to help them relax
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- Figure 6: Interest in product concepts in coffee, June 2019
- Coffee in the style of different countries interests half of users
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- Figure 7: Behaviours relating to coffee, June 2019
- What we think
Issues and Insights
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- Storytelling has potential to engage the young
- The facts
- The implications
- Tangibility is needed for brands to capitalise on their ethical endeavours
- The facts
- The implications
- Coffee in the style of different countries interests half of users
- The facts
- The implications
The Market – What You Need to Know
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- Falling prices see coffee volumes grow ahead of values in 2018 and 2019
- Further modest volume growth expected going forward
- Instant coffee remains dominant
- Household incomes are up but future remains uncertain
Market Size and Forecast
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- Falling coffee prices see volumes grow ahead of values in 2018
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- Figure 8: UK retail value and volume sales of coffee, 2014-24
- Further modest volume growth expected going forward
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- Figure 9: Forecast of UK retail value sales of coffee, 2014-24
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- Figure 10: Forecast of UK retail volume sales of coffee, 2014-24
- Forecast methodology
Market Segmentation
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- Instant coffee remains dominant
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- Figure 11: UK retail value and volume sales of coffee, by segment, 2017-19
- Ground coffee and beans continue to grow
- Coffee pods remain stagnant in volume
Market Drivers
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- Ageing population will support retail coffee sales
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- Figure 12: Trends in the age structure of the UK population, 2014-19 and 2019-24
- Coffee shops pose competition to retail coffee, but continue to inspire NPD
- Public spotlight on packaging waste
- BCA announces sustainability goals for coffee category
- Household incomes are up but future remains uncertain
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- Figure 13: Annual percentage change in CPI and AWE (regular pay), monthly basis, January 2013-Aril 2019
Companies and Brands – What You Need to Know
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- Nescafé’s sales dip, Kenco grows
- Taylors retains top position by value in ground coffee/coffee beans
- Environmentally friendly claims rise further
- Nestlé moves into coffee bags, organic and plant-based
- Rise in above-the-line spending in 2018
- 2019 themes range from curiosity to authenticity and coffee bags
Market Share
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- Nescafé’s sales dip
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- Figure 14: Leading brands’ sales and shares in the UK retail instant coffee market, by value and volume, 2017/18 and 2018/19
- JDE sees growth for most of its brands
- Carte Noire back in growth under Lavazza
- Taylors retains top position by value in ground coffee/coffee beans
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- Figure 15: Leading brands’ sales and shares in the UK retail ground coffee/coffee beans market (excluding coffee pods), by value and volume, 2017/18 and 2018/19
Launch Activity and Innovation
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- Pods/bags continue to garner the most NPD activity
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- Figure 16: Share of new product launches in the UK retail coffee market, by format, 2015-19
- Nescafé moves into coffee bags…
- …in a step needed to engage younger coffee lovers
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- Figure 17: Selected coffee bag launches, 2019
- Nestlé expands its offering
- Starbucks-branded launches roll out in 2019
- Nescafé Gold moves into organic…
- … and embraces plant-based trend
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- Figure 18: Selected coffee launches by Nestlé, 2019
- Nespresso showcases rare coffees with “Reviving Origins”
- Nescafé Azera revamps packaging
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- Figure 19: Nescafé Azera previous and revamped packaging, 2018 and 2019
- Environmentally friendly claims rise further
- Environmentally friendly packaging claims rise
- Half of launches make environmentally friendly product claims
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- Figure 20: Share of UK coffee launches featuring ethical claims, 2015-19
- Lavazza launches compostable coffee pods
- Smaller brands explore sugarcane and lignin
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- Figure 21: Examples of compostable coffee launches, 2019
- Coffee looks to plants for a boost and alternatives
- Mushrooms and beetroot make their way to coffee
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- Figure 22: Mushroom and beetroot coffee launches, 2018-19
- Competition ramps up further in RTD coffee
- Leading soft drinks conglomerates enter RTD coffee
- Own-label and brands from outside coffee also heat up competition
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- Figure 23: Selected iced coffee launches, 2019
Advertising and Marketing Activity
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- Rise in above-the-line spending
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- Figure 24: Total above-the-line, online display and direct mail advertising expenditure on coffee, 2016-19
- Figure 25: Above-the-line, online display and direct mail advertising expenditure on coffee, by top advertisers, 2016-19
- Nescafé Azera focuses on curiosity in brand overhaul
- Taylors of Harrogate campaign puts the spotlight on coffee bags
- JDE continues to support L’OR and steps up spend on Kenco
- Lavazza highlights Italian origin in “More than Italian” advert
- Lavazza announces football partnerships
- Nielsen Ad Intel coverage
The Consumer – What You Need to Know
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- Four in five adults drink coffee
- Favourite brand matters to half of coffee drinkers
- Ethical factors valued by just one in four
- One in three are interested in coffee to help them relax
- Coffee that is good for digestion appeals to one in three
- Coffee in the style of different countries interests half of users
- Subscription services appeal to one in three
Types of Coffee Drunk at Home
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- Four in five adults drink coffee
- Instant leads, other formats are making headway among younger groups
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- Figure 26: Types of coffee drunk at home in the last month, June 2019
- Decaf gains modest ground
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- Figure 27: Drinking of standard and decaffeinated coffee, June 2019
Factors Most Important in Coffee
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- Favourite brand matters to half of coffee drinkers
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- Figure 28: Factors considered most important in coffee, June 2019
- Storytelling holds potential to engage the young
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- Figure 29: Coffee launches spotlighting the brand story, 2018-19
- The ‘technical’ details of coffee spark limited interest
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- Figure 30: ‘Discover a world of coffee’ map at Sainsbury’s, March 2019
- Ethical factors valued by just one in four
- Organic can fuel interest by spotlighting tangible aspects
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- Figure 31: Source Climate Change Coffee and Arvid Nordquist Giusto Espresso highlight sustainability, 2019
Interest in Innovation in Coffee
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- One in three are interested in coffee to help them relax
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- Figure 32: Interest in product concepts in coffee, June 2019
- Marketing holds potential to help align coffee brands with relaxation
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- Figure 33: Coffee launches calling out relaxation on-pack, 2018-19
- Coffee that is good for digestion interests one in three
- Calling out lows and highs to forge digestion-friendly connotations
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- Figure 34: Examples of international coffee products linking with digestive benefits, 2018-19
- Pesticide-free farming chimes with 28%
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- Figure 35: Cafédirect Organic Peruvian Reserve and CRU Kafe Organic Espresso Blend, 2018-19
Behaviours Relating to Coffee
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- Flavour descriptions leave coffee drinkers wanting
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- Figure 36: Behaviours relating to coffee, June 2019
- Coffee in the style of different countries interests half of users
- The young show the keenest interest in international coffees
- Subscription services appeal to one in three
- Numerous small brands offer subscription schemes
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 37: Total UK retail value sales of coffee, best- and worst-case forecast, 2019-24
- Figure 38: Total UK retail volume sales of coffee, best- and worst-case forecast, 2019-24
Appendix – Market Share
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- Figure 39: Leading manufacturers’ sales and shares in the UK retail instant coffee market, by value and volume, 2017/18 and 2018/19
- Figure 40: Leading manufacturers’ sales and shares in the UK retail ground coffee/coffee beans market (excluding coffee pods), 2017/18 and 2018/19
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