Coffee - UK - January 2004

INTRODUCTION AND ABBREVIATIONS
Definitions
Consumer research
ACORN
 ABBREVIATIONS
EXECUTIVE SUMMARY
World stage
Lower prices, lower value for suppliers
Lower prices, more choice for consumers
Selling to the young and the bold
Maturing tastes
Instant coffee – a British thing
Trading up expected to continue
Market growth depends on increasing levels of consumption
MARKET DRIVERS
Price of raw materials
Figure 1: Composite indicator price of green coffee beans, 1989-2003
Figure 2: Indexed sales of green coffee beans, 1989-2003
The social dimension – fair trade
New initiatives
Health issues
The effects of weather
Economy – PDI and consumer expenditure
Figure 3: PDI and consumer expenditure, at current and constant 1998 prices, 1998-2007
Demographics – main consumers aged 35+
Figure 4: Trends and projections in UK population, by age group, 1998-2007
Youth market
Figure 5: UK retail market for soft drinks, by volume, 1998-2002
Figure 6: Consumption of coffee and other non-alcoholic drinks in GB – all adults and coffee drinkers, 2003
Figure 7: Consumption of other non-alcoholic drinks, by age and gender, 2003
Café culture/work habits
Figure 8: Ownership of electric kettles and elctric filter coffee machines in GB, by age and gender, 2003
MARKET SIZE AND TRENDS
Volume remains stable
Figure 9: UK retail sales of coffee, by volume, 1998-2003
Value reliant on world price of coffee beans
Figure 10: UK retail sales of coffee, by value, 1998-2003
Value sales of coffee – instant versus ground
Figure 11: UK retail sales of coffee, by sector, by value, 1999-2003
Fair trade coffee
Figure 12: UK retail sales of Fair Trade coffee, by value, 1998-2003
MARKET SEGMENTATION
 INSTANT COFFEE
Figure 13: UK retail sales of instant coffee, by value, 1998-2003
Instant by category
Figure 14: UK retail sales of instant coffee, by sector, by value, 1999-2003
Figure 15: UK retail sales of instant coffee, by sector, by value, 2003
Regular
Figure 16: UK retail sales of regular instant coffee, by value, 1998-2003
Premium
Figure 17: UK retail sales of premium instant coffee, by value, 1998-2003
Super-premium
Figure 18: UK retail sales of super-premium instant coffee, by value, 1998-2003
Decaffeinated
Figure 19: UK retail sales of decaffeinated instant coffee, by value, 1998-2003
Speciality
Figure 20: UK retail sales of speciality instant coffee, by value, 1998-2003
Powders
Figure 21: UK retail sales of instant coffee powders, by value, 1998-2003
Other instant coffee
Figure 22: UK retail sales of other instant coffee, by value, 1998-2003
Comparative performance, sector by sector
Figure 23: Indexed UK retail sales of instant coffee, at current prices, by sector, 1998-2003
Figure 24: Indexed UK retail sales of instant coffee, at constant 1998 prices, by sector, 1998-2003
 COFFEE BEANS/GROUND COFFEE
Figure 25: UK retail sales of ground coffee/coffee beans, by value, 1998-2003
Figure 26: Indexed UK retail sales of instant coffee and ground coffee/coffee beans, at current prices, 1998-2003
THE SUPPLY STRUCTURE
 FOREIGN TRADE
Figure 27: Production levels of main coffee-exporting countries, by volume, 1998-2002
 MANUFACTURER AND BRAND SHARES
Instant coffee
By producer
Figure 28: Market share of instant coffee, by producer, by value, 1999-2003
By brand
Figure 29: Market share for instant coffee, by leading brand, by value, 1999-2003
Fresh/ground coffee
Figure 30: Market share for ground/fresh coffee, by producer, by value, 1999-2003
 COMPANIES AND BRANDS
Nestlé
Kraft
Douwe Egberts
Cafédirect
Food Brands
Gala Coffee and Tea
Lavazza
RGB – Rombouts
Bettys & Taylors of Harrogate
Illy Caffe
Boaters
NEW PRODUCT BRIEFS
January 2004
December 2003
November 2003
October 2003
September 2003
August 2003
July 2003
June 2003
April 2003
March 2003
February 2003
ADVERTISING AND PROMOTION
Above the line
Figure 31: Main monitored media advertising expenditure on coffee, 1998-2003
Figure 32: Main monitored media advertising expenditure on coffee, cumulative total by top spenders, 2000-02
Below the line
Figure 33: Selected below-the-line promotions in the coffee market, September 2003
DISTRIBUTION
Multiples dominate
Packaging – shape and size
THE CONSUMER – LEVELS OF USAGE
 PAN-EUROPEAN COMPARISON OF COFFEE CONSUMPTION
Figure 34: Consumption of instant and fresh ground coffee, by country, 2003
Tea is more popular than coffee in GB
Figure 35: Consumption of coffee and tea, by country, 2003
Figure 36: Consumption of instant coffee, by country, 2003
Figure 37: Frequency of drinking instant coffee, by country, 2003
Figure 38: Consumption of fresh ground coffee, by country, 2003
Figure 39: Consumption of fresh ground coffee, by country, 2003
Room to revive the decaffeinated sector
Figure 40: Profile of instant coffee drinkers, by type drunk: standard or decaffeinated, by country, 2003
 COFFEE CONSUMPTION
Figure 41: Frequency of consuming instant coffee in GB, 2003
Instant coffee most popular among over-34s
Figure 42: Penetration and frequency of drinking instant coffee in GB, by gender and age, 2003
Upper-middle income groups rely on instant
Figure 43: Consumption and frequency of drinking instant coffee in GB, by annual income group and working status, 2003
Londoners shun instant coffee
Figure 44: Consumption and frequency of drinking instant coffee in GB, by region, 2003
Frequency higher in households with children
Figure 45: Penetration and frequency of drinking instant coffee in GB, by presence of children and household size, 2003
Fresh ground coffee – particular bias towards over-44s
Figure 46: Penetration and frequency of drinking fresh ground coffee, by gender and age, 2003
Volumes concentrated in base of frequent users
Figure 47: Consumption and frequency of drinking fresh ground coffee, by annual income group and working status, 2003
Consumption of fresh ground low in Midlands and North
Figure 48: Penetration and frequency of drinking fresh ground coffee, by region, 2003
Consumption frequency highest in smallest households
Figure 49: Penetration and frequency of drinking fresh ground coffee, by presence of children and household size, 2003
Medium ground the most popular choice
Figure 50: Type of fresh ground coffee drunk in GB, beans or ground, 2003
Attitudinal influences – inexpensive prices not most popular factor
Figure 51: Attitudes towards shopping, brands and quality – all adults and coffee drinkers, 2003
 MINTEL EUROPEAN TARGET GROUPS
Figure 52: Consumption and frequency of drinking coffee, by GB Special Groups, 2003
Figure 53: Consumption and frequency of drinking coffee, by GB Special Groups, 2003
THE CONSUMER – TYPE OF COFFEE/ATTITUDES TOWARDS COFFEE
Branded instant coffee takes top spot
Figure 54: Types of coffee bought in the last three months, 1999-2003
Figure 55: Types of coffee bought in the last three months, 1999-2003
Consumers turn to premium instant and ground as they age
Figure 56: Types of coffee bought in the last three months, by gender, age and socio-economic status, November 2003
Pre-/no family go for instant
Figure 57: Types of coffee bought in the last three months, by lifestage, presence of children and Mintel’s Special Groups, November 2003
Married respondents opt for premium varieties
Figure 58: Types of coffee bought in the last three months, by marital status, working status, household size and tenure, November 2003
Room to expand consumer base in Scotland?
Figure 59: Types of coffee bought in the last three months, by region and ACORN category, November 2003
Heavy TV viewers drink standard instant
Figure 60: Types of coffee bought in the last three months, by media usage, TV viewing and main supermarket used, November 2003
Own-label suits all tastes and pockets
Figure 61: Types of coffee bought in the last three months, by gender, age and socio-economic status, November 2003
Raised health-awareness benefits decaffeinated coffee
Figure 62: Types of coffee bought in the last three months, by lifestage, presence of children and Mintel’s Special Groups, November 2003
One-cup portions offer convenience to one-person households
Figure 63: Types of coffee bought in the last three months, by marital status, working status, household size and tenure, November 2003
Scotland has highest level of non-buyers
Figure 64: Types of coffee bought in the last three months, by region and ACORN category, November 2003
Co-op shoppers buy own-label
Figure 65: Types of coffee bought in the last three months, by media usage, TV viewing and main supermarket used, November 2003
Coffee primarily drunk after meals
Figure 66: Attitudes towards coffee drunk at home, November 2003
Figure 67: Attitudes towards coffee drunk at home, November 2003
Room to promote coffee for breakfast and after-dinner
Figure 68: Attitudes towards coffee drunk at home, by gender, age and socio-economic status, November 2003
Brand loyalty highest among the retired
Figure 69: Attitudes towards coffee drunk at home, by lifestage, presence of children and Mintel’s Special Groups, November 2003
Older consumers least keen on coffee at breakfast time
Figure 70: Attitudes towards coffee drunk at home, by marital status, working status, household size and tenure, November 2003
Brand loyalty high in the North West
Figure 71: Attitudes towards coffee drunk at home, by region and ACORN category, November 2003
Broadsheet readers and Internet users exposed to health issues
Figure 72: Attitudes towards coffee drunk at home, by media usage, TV viewing and main supermarket used, November 2003
45-64s and ABs may favour super-premium instants
Figure 73: Attitudes towards coffee drunk at home, by gender, age and socio-economic status, November 2003
Taste is the issue
Figure 74: Attitudes towards coffee drunk at home, by lifestage, presence of children and Mintel’s Special Groups, November 2003
Smaller households choose instant over ground
Figure 75: Attitudes towards coffee drunk at home, by marital status, working status, household size and tenure, November 2003
Settling residents look for convenience
Figure 76: Attitudes towards coffee drunk at home, by region and ACORN category, November 2003
Broadsheet readers and Marks & Spencer shoppers prefer ground
Figure 77: Attitudes towards coffee drunk at home, by media usage, TV viewing and main supermarket used, November 2003
 IDENTIFYING THE PRODUCTS BY CONSUMER PREFERENCES
Ground coffee mainly drunk after dinner
Figure 78: Types of coffee bought, by attitudes towards coffee drunk at home, November 2003
Sacrificing taste for convenience
Figure 79: Cross-analysis of types of coffee bought, by attitudes towards coffee drunk at home, November 2003
 IDENTIFYING TARGETS
Ground coffee has higher consumption out of home
Figure 80: Combined responses, November 2003
Premium and ground bought by 45-64s and ABs
Figure 81: Combined responses, by gender, age and socio-economic status, November 2003
ABC1 families and third agers opt for premium
Figure 82: Combined responses, by lifestage, Mintel’s Special Groups, marital and working status, November 2003
Ground and decaffeinated most popular in London and the South
Figure 83: Combined responses, by region and ACORN category, November 2003
Shelf allocation will vary store to store
Figure 84: Combined responses, by media usage, TV viewing and main supermarket visited, November 2003
 SCOPE FOR ENCOURAGING A RANGE OF PRODUCTS
Importance of 45-54s
Figure 85: Number of different types of coffee bought in the last three months, November 2003
Repertoire linked to affluence
Figure 86: Number of different types of coffee bought in the last three months, by gender, age and socio-economic status, November 2003
North/South divide
Figure 87: Number of different types of coffee bought in the last three months, by lifestage and Mintel’s Special Groups, November 2003
Figure 88: Number of different types of coffee bought in the last three months, by region and ACORN category, November 2003
Light TV viewers drink more coffee types
Figure 89: Number of different types of coffee bought in the last three months, by media usage, TV viewing and main supermarket visited, November 2003
 SPOTTING POTENTIAL IN SIMILAR CUSTOMER PROFILES
Figure 90: Comparison of coffee combination buyers and grocery retailer consumer profiles, November 2003
Figure 91: Comparison of Coffee repertoire buyers and grocery retailer consumer profiles, November 2003
THE FUTURE
New initiatives
Supply
Demand
Fair trade
UK-specific factors
Attracting youth
Affordability
Market growth depends on increasing levels of consumption
FORECAST
Revitalising the market
Figure 92: Forecast of retail sales of coffee, by volume and value, 2003-07
Marked improvement in performance
Trading up is key to market development
Diversifying from the after-dinner association
Take-up among young consumers important to growth
Factors used in the forecast