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Coffee - UK - October 2019

“Britain today is a nation of coffee drinkers as much as tea lovers, usage of each standing at four out of five adults. The industry stalwarts, however, face a challenge in that the younger age groups are noticeably less brand-loyal than older coffee lovers. Compelling storytelling can win them over, but this is a sphere in which craft brands have taken the lead.”

– Kiti Soininen, Category Director, UK Food & Drink Research

This report examines the following issues:

  • Storytelling has potential to engage the young
  • Tangibility is needed for brands to capitalise on their ethical endeavours
  • Coffee in the style of different countries interests half of users

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
        • Excluded
        • Executive Summary

            • The market
              • Falling prices see coffee volumes grow ahead of values in 2018 and 2019
                • Figure 1: UK retail value sales of coffee, 2014-24
              • Further modest volume growth expected going forward
                • Instant coffee remains dominant
                  • 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
                      • 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
                                  • 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
                                  • Figure 5: Factors considered most important in coffee, June 2019
                                • One in three are interested in coffee to help them relax
                                  • Figure 6: Interest in product concepts in coffee, June 2019
                                • Coffee in the style of different countries interests half of users
                                  • Figure 7: Behaviours relating to coffee, June 2019
                                • What we think
                                • Issues and Insights

                                  • 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

                                                    • 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

                                                            • Falling coffee prices see volumes grow ahead of values in 2018
                                                              • Figure 8: UK retail value and volume sales of coffee, 2014-24
                                                            • Further modest volume growth expected going forward
                                                              • Figure 9: Forecast of UK retail value sales of coffee, 2014-24
                                                              • Figure 10: Forecast of UK retail volume sales of coffee, 2014-24
                                                            • Forecast methodology
                                                            • Market Segmentation

                                                              • Instant coffee remains dominant
                                                                • 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

                                                                  • Ageing population will support retail coffee sales
                                                                    • 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
                                                                          • 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

                                                                        • 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

                                                                                    • Nescafé’s sales dip
                                                                                      • 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
                                                                                          • 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

                                                                                        • Pods/bags continue to garner the most NPD activity
                                                                                          • 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
                                                                                            • 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
                                                                                                  • Figure 18: Selected coffee launches by Nestlé, 2019
                                                                                                • Nespresso showcases rare coffees with “Reviving Origins”
                                                                                                  • Nescafé Azera revamps packaging
                                                                                                    • 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
                                                                                                        • Figure 20: Share of UK coffee launches featuring ethical claims, 2015-19
                                                                                                      • Lavazza launches compostable coffee pods
                                                                                                        • Smaller brands explore sugarcane and lignin
                                                                                                          • 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
                                                                                                              • 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
                                                                                                                  • Figure 23: Selected iced coffee launches, 2019
                                                                                                              • Advertising and Marketing Activity

                                                                                                                • Rise in above-the-line spending
                                                                                                                  • 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

                                                                                                                            • 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

                                                                                                                                          • Four in five adults drink coffee
                                                                                                                                            • Instant leads, other formats are making headway among younger groups
                                                                                                                                              • Figure 26: Types of coffee drunk at home in the last month, June 2019
                                                                                                                                            • Decaf gains modest ground
                                                                                                                                              • Figure 27: Drinking of standard and decaffeinated coffee, June 2019
                                                                                                                                          • Factors Most Important in Coffee

                                                                                                                                            • Favourite brand matters to half of coffee drinkers
                                                                                                                                              • Figure 28: Factors considered most important in coffee, June 2019
                                                                                                                                            • Storytelling holds potential to engage the young
                                                                                                                                              • Figure 29: Coffee launches spotlighting the brand story, 2018-19
                                                                                                                                            • The ‘technical’ details of coffee spark limited interest
                                                                                                                                              • 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
                                                                                                                                                • Figure 31: Source Climate Change Coffee and Arvid Nordquist Giusto Espresso highlight sustainability, 2019
                                                                                                                                            • Interest in Innovation in Coffee

                                                                                                                                              • One in three are interested in coffee to help them relax
                                                                                                                                                • Figure 32: Interest in product concepts in coffee, June 2019
                                                                                                                                              • Marketing holds potential to help align coffee brands with relaxation
                                                                                                                                                • 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
                                                                                                                                                  • Figure 34: Examples of international coffee products linking with digestive benefits, 2018-19
                                                                                                                                                • Pesticide-free farming chimes with 28%
                                                                                                                                                  • Figure 35: Cafédirect Organic Peruvian Reserve and CRU Kafe Organic Espresso Blend, 2018-19
                                                                                                                                              • Behaviours Relating to Coffee

                                                                                                                                                • Flavour descriptions leave coffee drinkers wanting
                                                                                                                                                  • 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

                                                                                                                                                          • Abbreviations
                                                                                                                                                            • Consumer research methodology
                                                                                                                                                            • Appendix – Market Size and Forecast

                                                                                                                                                              • Forecast methodology
                                                                                                                                                                  • 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

                                                                                                                                                                  • 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

                                                                                                                                                              Coffee - UK - October 2019

                                                                                                                                                              £1,995.00 (Excl.Tax)