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
- Topline growth masks mixed segment performances
- Inflation to support value growth
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- Figure 1: Forecast of UK retail value sales of coffee*, 2012-22
- Instant coffee remains under pressure
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- Figure 2: UK retail value sales of coffee, by segment, 2012 and 2017
- Growth of ground and beans continues
- Pods’ value growth slows on stalling volumes
- Ageing population should underpin coffee sales
- Commodity prices on the rise, incomes set to be squeezed
- Companies and brands
- Instant coffee market remains under Nestlé’s stronghold
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- Figure 3: Leading manufacturers’ value shares in the UK retail instant coffee market, 2016/17*
- Leading ground/beans brand Taylors loses share as sales fall
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- Figure 4: Leading manufacturers’ value shares in the UK retail ground coffee/coffee beans market (excluding coffee pods), 2016/17*
- Private label grows its share of NPD
- Operators explore premium coffee
- Adspend falls in 2016
- The consumer
- Instant coffee is the most commonly drunk type
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- Figure 5: Types of coffee drunk, June 2017
- Coffee pod machine ownership remains stable
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- Figure 6: Ownership of coffee pod machines, June 2017
- Large supermarkets the most common purchase location
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- Figure 7: Purchase channels for coffee, by type of coffee, June 2017
- Strong interest in variety packs of coffee
- Subscriptions with a free machine could foster pod growth
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- Figure 8: Interest in coffee product concepts, June 2017
- Majority of coffee drinkers are adventurous
- A sizeable 24% consider themselves a coffee connoisseur
- Most coffee drinkers pay attention to flavour descriptions
- Origin details denote quality
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- Figure 9: Behaviours relating to coffee, June 2017
- What we think
Issues and Insights
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- Scope for instant coffee to capitalise on users' adventurousness
- The facts
- The implications
- Subscription models could overcome price barrier to pod machine purchase
- The facts
- The implications
- Scope to reposition decaffeinated coffee as an evening drink
- The facts
- The implications
The Market – What You Need to Know
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- Topline growth masks mixed segment performances
- Inflation to support value growth
- Instant coffee remains under pressure
- Growth of ground and beans continues
- Pods’ value growth slows on stalling volumes
- Ageing population should underpin coffee sales
- Commodity prices on the rise, incomes set to be squeezed
Market Size and Forecast
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- Topline growth masks mixed segment performances
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- Figure 10: UK retail value and volume sales of coffee*, 2012-22
- Inflation to support value growth
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- Figure 11: Forecast of UK retail value sales of coffee*, 2012-22
- Figure 12: Forecast of UK retail volume sales of coffee*, 2012-22
- Forecast methodology
Market Segmentation
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- Instant coffee remains under pressure
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- Figure 13: UK retail value and volume sales of instant coffee, 2012-22
- Figure 14: Forecast of UK retail value sales of instant coffee, 2012-22
- Growth of ground and beans continues
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- Figure 15: UK retail value and volume sales of ground coffee/coffee beans, 2012-22
- Figure 16: Forecast of UK retail value sales of ground coffee/coffee beans, 2012-22
- Pods’ value growth slows on stalling volumes
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- Figure 17: UK retail value and volume sales of coffee pods, 2012-22
- Figure 18: Forecast of UK retail value sales of coffee pods, 2012-22
Market Drivers
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- Ageing population should underpin coffee sales
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- Figure 19: Trends in the age structure of the UK population, 2012-17 and 2017-22
- Coffee shops offer competition and inspiration
- Growth in hot beverage appliances slows
- Weakened Pound points to rising retail prices
- Household incomes set to be squeezed
Companies and Brands – What You Need to Know
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- Instant coffee market remains under Nestlé’s stronghold
- Leading ground/beans brand Taylors loses share as sales fall
- Private label grows its share of NPD
- Operators explore premium coffee
- Adspend falls in 2016
Market Share
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- Nestlé retains stronghold on instant coffee market
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- Figure 20: Leading manufacturers’ sales and shares in the UK retail instant coffee market, by value and volume, 2015/16 and 2016/17
- Micro-ground buoys sales for Nescafé and Kenco
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- Figure 21: Leading brands’ value sales and shares in the UK retail instant coffee market, 2015/16 and 2016/17
- Figure 22: Leading brands’ volume sales and shares in the UK retail instant coffee market, 2015/16 and 2016/17
- Own-label posts growth across the board
- Leading ground/beans brand Taylors loses share as sales fall
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- Figure 23: Leading brands’ sales and shares in the UK retail ground coffee/coffee beans market (excluding coffee pods), by value and volume, 2015/16 and 2016/17
Launch Activity and Innovation
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- New products grew in 2016
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- Figure 24: Share of new product launches in the UK coffee market, by format, 2013-17
- Nestlé retains its position as top in NPD
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- Figure 25: Share of new product launches in the UK coffee market, by company (sorted by 2016), 2013-17
- JDE introduces luxury brand L’OR to the UK market
- Taylors unveils single-origin range
- Caffè Nero makes first foray into retail
- Compostable pod launches look to tackle waste
- Ethical claims grow
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- Figure 26: Share of new product launches in the UK coffee market, by top 10 claims, 2013-17
Advertising and Marketing Activity
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- Adspend falls in 2016
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- Figure 27: Above-the-line, online display and direct mail advertising expenditure on coffee, 2013-17
- Nestlé ups adspend
- Nescafé targets Millennials in 2016 ad campaign…
- …and on social media
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- Figure 28: Above-the-line, online display and direct mail advertising expenditure on coffee, by top 4 advertisers, 2013-17
- Nespresso spend doubles in 2016
- Lavazza supports Prontissimo!
- JDE goes for gold with L’OR campaign
- Kenco continues Coffee vs Gang campaign
- Nielsen Ad Intel coverage
The Consumer – What You Need to Know
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- Instant coffee is the most commonly drunk type
- Coffee pod machine ownership remains stable
- Large supermarkets the most common purchase location
- Strong interest in variety packs of coffee
- Subscriptions with a free machine could foster pod growth
- Majority of coffee drinkers are adventurous
- A sizeable 24% consider themselves a coffee connoisseur
- Most coffee drinkers pay attention to flavour descriptions
- Origin details denote quality
Coffee Drinking at Home
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- Instant coffee is the most commonly drunk type
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- Figure 29: Types of coffee drunk, June 2017
- Over-55s most likely to drink coffee; 25-34s have the widest repertoire
- Coffee mixes and chilled RTD coffee peak among 16-24s
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- Figure 30: Frequency of drinking coffee, by type, June 2017
- Decaf drunk by just 17% of coffee drinkers
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- Figure 31: Drinking of standard and decaffeinated coffee, June 2017
Ownership of Coffee Pod Machines
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- Coffee pod machine ownership remains stable
- A quarter of Brits interested in buying a coffee pod machine
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- Figure 32: Ownership of coffee pod machines, June 2017
- Tassimo takes the pod machine crown
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- Figure 33: Type of coffee pod machine owned, June 2017
- Pod machine owners remain frequent instant coffee drinkers
Coffee Purchase Channels
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- Large supermarkets the most common purchase location
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- Figure 34: Purchase channels for coffee, by type of coffee, June 2017
- Nespresso owners most likely to use alternative purchase channels
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- Figure 35: Purchase channels for coffee pods in the last month, by type of coffee pod machine owned, June 2017
Interest in Coffee Concepts
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- Variety packs echo interest in coffee experimentation
- Strong interest in variety packs of coffee
- Assortment packs are little explored in ground and instant coffee
- Pack size poses a challenge for assortments
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- Figure 36: Interest in coffee product concepts, June 2017
- Single-serve instant coffee sachets garner interest
- Subscriptions with a free machine could foster pod growth
- Evening coffee appeals to under-45s
- A quarter of under-45s are interested in evening coffee
- Scope to reposition decaf as an evening drink
Behaviours Relating to Coffee
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- Majority of coffee drinkers are adventurous…
- Young coffee drinkers are the most adventurous
- Frequent NPD needed to cater to love of newness
- …while a sizeable 24% consider themselves a coffee connoisseur
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- Figure 37: Behaviours relating to coffee, June 2017
- Flavour descriptions and origin details important
- Most coffee drinkers pay attention to flavour descriptions
- Origin details denote quality
- Recyclable coffee pods appeal
- Cold-brew and nitro-brew coffee garners interest among the young
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 38: Total UK retail value sales of coffee*, best- and worst-case forecast, 2017-22
- Figure 39: Total UK retail volume sales of coffee, best- and worst-case forecast*, 2017-22
Appendix – Market Segmentation
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- Instant coffee segment
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- Figure 40: Forecast of UK retail volume sales of instant coffee, 2012-22
- Figure 41: Total UK retail value sales of instant coffee, best- and worst-case forecast, 2017-22
- Figure 42: Total UK retail volume sales of instant coffee, best- and worst-case forecast, 2017-22
- Ground coffee/coffee beans segment
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- Figure 43: Forecast of UK retail volume sales of ground coffee/coffee beans, 2012-22
- Figure 44: Total UK retail value sales of ground coffee/coffee beans, best- and worst-case forecast, 2017-22
- Figure 45: Total UK retail volume sales of ground coffee/coffee beans, best- and worst-case forecast, 2017-22
- Coffee pods
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- Figure 46: Forecast of UK retail volume sales of coffee pods, 2012-22
- Figure 47: Total UK retail value sales of coffee pods, best- and worst-case forecast, 2017-22
- Figure 48: Total UK retail volume sales of coffee pods, best- and worst-case forecast, 2017-22
Appendix – Market Share
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- Figure 49: Leading manufacturers’ sales and shares in the UK ground coffee/coffee beans market (excluding coffee pods), by value and volume, 2015/16 and 2016/17
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Appendix – Launch Activity and Innovation
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- Figure 50: Share of new product launches in the UK coffee market, by launch type, 2013-17
- Figure 51: Share of new product launches in the UK coffee market, by branded and private label, 2013-17
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