Coffee Shops - UK - February 2011

ISSUES IN THE MARKET
Main issues
Definition
Abbreviations
FUTURE OPPORTUNITIES
Love your coffeehouse
Coffee to go-go
MARKET IN BRIEF
Coffee shop usage
Where?
What consumers order in coffee shops
Drinks
Food
Enticements for visiting coffee shops
Market size and share
Modernisation plans
An increasingly competitive marketplace
INTERNAL MARKET ENVIRONMENT
Key points
Trends in the price of coffee
Figure 1: Trends in the price of coffee, January 2008-January 2011
UK’s coffee consumption
Figure 2: Per capita consumption of coffee in selected countries, 2005 and 2009
Coffee/tea drinking habits
Figure 3: Usage of instant coffee, 2010
Figure 4: Usage of fresh ground coffee, 2010
Figure 5: Usage of tea, 2010
Ethical issues
Figure 6: Sales of fair trade hot beverages in the UK (both in and out of home), 2005-09
Customer service and training
BROADER MARKET ENVIRONMENT
Key points
The economic situation
Figure 7: GDP quarterly percentage change, Q1 2004-Q4 2010
Figure 8: GfK NOP Consumer Confidence Index, January 1988-December 2010
Consumer spending priorities
Figure 9: Consumer spending priorities, December 2009 and December 2010
Taking account of demographic differences
Figure 10: Forecast adult population trends, by lifestage, 2005-15
COMPETITIVE CONTEXT
Key points
 IN-HOME
Coffee machines
Figure 11: Trends in ownership of filter coffee makers and espresso machines, 2007-10
In-home innovations
Foodservice brands – retail products
Trends in hot chocolate innovations
Speciality teas
Children’s menus
Price differences
 OUT-OF-HOME
Greggs
JD Wetherspoon
McDonald’s
PizzaExpress’s Living Lab
Pret A Manger
Sainsbury’s ‘Fresh Kitchen’
Hotels
Motorway services and garage forecourts
Wild Bean Café
Coffee Nation
Coffee shop chains fighting back
WHO’S INNOVATING?
Key points
 VENUES
New concepts/old brands
Cross-collaborations
Pubs
Roadside catering/MSAs
New entrants to the market
 NEW PRODUCT LAUNCHES
The flat white
 OTHER DEVELOPMENTS
Technological advances
MARKET SIZE AND FORECAST
Key points
Figure 12: Market size and forecast of coffee shops, at current and 2010 prices, 2005-15
Examples of financial performance
Going forward
Figure 13: Market size and forecast of coffee shops, best and worst case scenarios, 2005-15
Methodology
MARKET SHARE
Key points
Figure 14: Leading operators in the UK coffee shop market, 2010
Administrations
Expansion plans
COMPANIES AND PRODUCTS
 THE BIG THREE
Costa Coffee
Financial performance and strategy
Figure 15: Financial performance of Costa Limited, 2009 and 2010
Recent menu changes
Recent advertising campaigns
Other new developments
Future intentions
Starbucks
Background information
Financial performance
Figure 16: Financial performance of Starbucks Coffee Company UK, 2008 and 2009
Recent menu changes
Other developments
Caffè Nero
Financial performance
Figure 17: Financial performance of Caffè Nero Group Limited, 2008 and 2009
Future intentions
 OTHER MAJOR PLAYERS
AMT Coffee
Financial performance
Figure 18: Financial performance of AMT Coffee Limited, 2008 and 2009
Recent price promotions and advertising campaigns
Other market developments/new developments
BB’s Coffee & Muffins
Financial performance
Coffee Republic
Recent price promotions and advertising campaigns
Recent menu changes
Other market developments/new developments
Caffè Ritazza
Recent price promotions and advertising campaigns
Recent menu changes
Other market developments/new developments
Puccino’s Worldwide
Recent menu changes
 SMALLER PLAYERS
Boston Tea Party
Café Thorntons
Caffè Fratelli
Esquires Coffee Houses
Love Coffee
Monmouth
Muffin Break
SOHO Coffee Co.
 VENDING MACHINES
Coffee Nation
Financial performance
Figure 19: Financial performance of Coffee Nation Limited, 2009 and 2010
Recent price promotions and advertising campaigns
Recent menu changes
Other market developments/new developments
BRAND COMMUNICATION AND PROMOTION
Key points
Embracing mainstream media
Figure 20: Advertising expenditure on selected coffee shop brands, 2006-09
Figure 21: Advertising expenditure on selected coffee shop brands, by media type, 2009
ATM price promotions
Online marketing/advertising
Website usage
Figure 22: Total unique visitors for selected coffee shop brands, November 2008-November 2010
Figure 23: Average minutes per visit for selected coffee shop brands, November 2008-November 2010
Facebook campaigns
Location-based mobile promotions
BRAND ELEMENTS
Brand map
Figure 24: Attitudes towards and visits to coffee shop brands, December 2010
Brand attitudes
Figure 25: Attitudes, by coffee shop brands, December 2010
Brand personality
Figure 26: Coffee shop brand personality – macro image, December 2010
Figure 27: Coffee shop brand personality – micro image, December 2010
Correspondence analysis
Brand experience
Figure 28: Coffee shop brand visitation, December 2010
Figure 29: Satisfaction with various coffee shop brands, December 2010
Figure 30: Consideration of coffee shop brands, December 2010
Figure 31: Consumer perceptions of current coffee shop brand performance, December 2010
Figure 32: Coffee shop brand recommendation – Net Promoter Score, December 2010
Brand index
Figure 33: Coffee shop brand index, December 2010
Figure 34: Coffee shop brand index vs. recommendation, December 2010
 TARGET GROUP ANALYSIS
Figure 35: Target groups, December 2010
Figure 36: Coffee shop brand usage, by target groups, December 2010
Group One – The Conformists
Group Two – Simply the Best
Group Three – Shelf Stalkers
Group Four – Habitual Shoppers
Group Five – The Individualists
HOW OFTEN DO PEOPLE USE COFFEE SHOPS?
Key points
Sit-in versus takeaway
Figure 37: Trends in visiting coffee shops, 2006-10
Frequency of visiting coffee shops
Figure 38: Frequency of visiting coffee shops, 2007-10
WHO USES COFFEE SHOPS AND WHERE DO THEY GO?
Key points
Figure 39: Coffee shops visited, December 2010
Tapping into demographic differences
Figure 40: The ‘Big Three’ coffee shops visited, by gender, socio-economic group and lifestage, December 2010
Lapsed and non-users
Repertoire of coffee shops visited
Figure 41: Repertoire of coffee shops visited, December 2010
FOOD/DRINK ORDERED IN COFFEE SHOPS
Key points
Figure 42: Food/drink ordered in coffee shops, December 2010
Speciality/herbal teas
Signature drinks
Capitalising on the popularity of seasonal food/drink
Food
Figure 43: Where people buy sandwiches, November 2009
ENTICEMENTS FOR VISITING COFFEE SHOPS
Key points
Figure 44: Enticements for visiting coffee shops, December 2010
Getting back to basics
Wi-Fi
Figure 45: Availability of Wi-Fi at coffee shops and selected competitors, 2011
Repertoire of enticements for visiting coffee shops
Figure 46: Repertoire of enticements for visiting coffee shops, December 2010
APPENDIX – INTERNAL MARKET ENVIRONMENT
Figure 47: Trends in usage of instant coffee, 2006-09
Figure 48: Selected attitudes towards drinking coffee in the home, by detailed demographics, December 2009
APPENDIX – BROADER MARKET ENVIRONMENT
Figure 49: Consumer spending priorities, by detailed demographics, August 2010
APPENDIX – COMPETITIVE CONTEXT
Figure 50: Ownership of filter coffee maker and espresso machine, by detailed demographics, 2010
APPENDIX – MARKET SIZE AND FORECAST
Figure 51: Coffee shops market size and forecast, by worst and best case scenario, 2010-15
APPENDIX – HOW OFTEN DO PEOPLE USE COFFEE SHOPS?
Figure 52: Visiting coffee shops, by detailed demographics, 2010
Figure 53: Frequency of visiting coffee shops, by detailed demographics, 2010
APPENDIX – WHO USES COFFEE SHOPS AND WHERE DO THEY GO?
Figure 54: Most popular coffee shops visited, by detailed demographics, December 2010
Figure 55: Next most popular coffee shops visited, by detailed demographics, December 2010
Figure 56: Coffee shops visited, by most popular coffee shops visited, December 2010
Figure 57: Coffee shops visited, by next most popular coffee shops visited, December 2010
Repertoire of coffee shops visited
Figure 58: Repertoire of coffee shops visited, by detailed demographics, December 2010
Figure 59: Coffee shops visited, by repertoire of coffee shops visited, December 2010
Figure 60: Food/drink ordered in coffee shops, by repertoire of coffee shops visited, December 2010
Figure 61: Enticements for visiting coffee shops, by repertoire of coffee shops visited, December 2010
APPENDIX – FOOD/DRINK ORDERED IN COFFEE SHOPS
Figure 62: Most popular food/drink ordered in coffee shops, by detailed demographics, December 2010
Figure 63: Next most popular food/drink ordered in coffee shops, by detailed demographics, December 2010
Figure 64: Coffee shops visited, by most popular food/drink ordered in coffee shops, December 2010
Figure 65: Coffee shops visited, by next most popular food/drink ordered in coffee shops, December 2010
Figure 66: Coffee shops visited, by other food/drink ordered in coffee shops, December 2010
Figure 67: Food/drink ordered in coffee shops, by most popular coffee shops visited, December 2010
Figure 68: Food/drink ordered in coffee shops, by next most popular coffee shops visited, December 2010
Figure 69: Food/drink ordered in coffee shops, by most popular food/drink ordered in coffee shops, December 2010
Figure 70: Food/drink ordered in coffee shops, by next most popular food/drink ordered in coffee shops, December 2010
Figure 71: Food/drink ordered in coffee shops, by other food/drink ordered in coffee shops, December 2010
APPENDIX – ENTICEMENTS FOR VISITING COFFEE SHOPS
Figure 72: Most popular enticements for visiting coffee shops, by detailed demographics, December 2010
Figure 73: Next most popular enticements for visiting coffee shops, by demographics, December 2010
Figure 74: Other enticements for visiting coffee shops, by demographics, December 2010
Figure 75: Enticements for visiting coffee shops, by most popular coffee shops visited, December 2010
Figure 76: Enticements for visiting coffee shops, by next most popular coffee shops visited, December 2010
Figure 77: Enticements for visiting coffee shops, by most popular food/drink ordered in coffee shops, December 2010
Figure 78: Enticements for visiting coffee shops, by next most popular food/drink ordered in coffee shops, December 2010
Figure 79: Enticements for visiting coffee shops, by other food/drink ordered in coffee shops, December 2010
Figure 80: Enticements for visiting coffee shops, by most popular enticements for visiting coffee shops, December 2010
Figure 81: Enticements for visiting coffee shops, by next most popular enticements for visiting coffee shops, December 2010
Figure 82: Enticements for visiting coffee shops, by other enticements for visiting coffee shops, December 2010
Repertoire of enticements for visiting coffee shops
Figure 83: Repertoire of enticements for visiting coffee shops, by detailed demographics, December 2010
Figure 84: Enticements for visiting coffee shops, by repertoire of enticements for visiting coffee shops, December 2010
Figure 85: Coffee shops visited, by repertoire of enticements for visiting coffee shops, December 2010
Figure 86: Food/drink ordered in coffee shops, by repertoire of enticements for visiting coffee shops, December 2010