2025
9
UK Coffee and Tea in Foodservice Market Report 2025
2026-01-26T14:01:42+00:00
REP07E58A83_9DF6_4C6C_BB3A_215ED94B64EA
2995
190631
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Report
en_GB
Despite rising costs and stricter health policies, the UK café and coffee shop market is expected to grow, driven by strong demand and more OOH occasions. Operators need to improve…
UK
Foodservice
simple

UK Coffee and Tea in Foodservice Market Report 2025

"Despite rising costs, OOH drinks will grow by offering health-led options, low-risk experimental drinks, and loyalty-driven experiences to boost repeat visits and sustain spend in a competitive market."

Trish Caddy, Associate Principal - Foodservice

Trish Caddy, Associate Principal - Foodservice

Market Intelligence ReportsFoodserviceUK

UK Cafés and Coffee Shops Market – Trends and Insights

  • Despite rising costs and stricter health policies, the UK café and coffee shop market is expected to grow, driven by strong demand and more OOH occasions. Operators need to improve pricing and menu transparency, manage menu price inflation thoughtfully, and preserve value in an increasingly price-sensitive market.
  • While national chains use their scale to grow, maintaining brand loyalty is difficult, as consumers buy coffee shop-style drinks across multiple formats, including fast food and restaurants. In fact, 62% of consumers buy these drinks from food-led venues which is just as common as from coffee chains. To stand out in this competitive market, operators must focus on offering premium products, wellness-focused menus, and a strong brand personality.
  • Coffee remains the market leader, but tea, juice, and cold drinks show significant growth potential, particularly among younger consumers seeking variety and indulgence.
  • Treat-seeking drives most drink purchases, but generational gaps are clear. Younger consumers prioritise wellness, visual appeal, and ethics, while older drinkers value routine and familiarity. Faced with rising costs, customers prefer affordable alternatives, such as batch filter coffee, rather than being subjected to “shrinkflation” and smaller portion sizes.

This Report Looks at the Following Areas:

  • Analysis of market performance: the UK cafés and coffee shops market exceeds £10bn in 2025 and continues to expand, despite sustained inflation and tightening health policy reshaping pricing, reformulation and transparency requirements
  • Where and how consumers buy OOH drinks: Costa leads market penetration, but most people buy drinks across multiple formats
  • Drink choices and generational demand shifts: coffee remains dominant, but hot chocolate, iced drinks, juice and tea drive incremental growth, with cold formats acting as a core frequency lever among under-35s
  • Choice drivers, value and innovation strategies: health, sustainability, social media and experience shape younger consumers’ expectations, while value clarity, loyalty and premium add-ons outperform shrinkflation, guiding operators’ innovation, marketing and format decisions
  • Analysis of operator strategies: SpendMapper data shows coffee shop brands compete within a broader OOH market shaped by QSR and delivery platforms

Collapse All

  1. EXECUTIVE SUMMARY

    • What you need to know
    • Outlook for UK coffee and tea in foodservice
    • Opportunities
    • Younger consumers crave experimental drinks, but familiarity drives core purchases, creating low-risk innovation opportunities for OOH operators
    • Health-led reformulation and transparency allow OOH operators to premiumise menus and win younger drinkers, despite tighter regulation
    • Targeted promotions and optional add-ons convert engagement into OOH revenue

  2. THE MARKET

    • Snapshot – market size and forecast
    • UK restaurant and café spend surges past pre-pandemic levels, reflecting recovery, higher transactions, and growing OOH occasions
    • Graph 1: household expenditure on cafes etc CP SA, 1985-2025
    • UK restaurant and café prices rise steadily, with inflation accelerating post-2021, shaping costs and consumer behaviour in OOH drinks
    • Graph 2: CPI restaurants & cafes, 2020-25
    • UK health policy tightening raises nutrition-linked costs and marketing limits for OOH drinks, pushing reformulation and transparency
    • Environmental pressures drive the UK OOH drinks market toward waste reduction, recycling, and climate-resilient sourcing
    • Market size and forecast
    • UK café market value climbs from £10.6bn in 2025 to £13.7bn by 2030
    • Graph 3: market forecast for total value of cafés and coffee shops, 2019-30
    • UK coffee & bakery brands show a clear split between high-reach chains and premium players trading scale for higher-value visits
    • Graph 4: customer numbers, spend per transaction and total spend for leading coffee and bakery brands, 2024-26
    • Costa Coffee customers spread their OOH spend widely, with major fast-food brands and delivery platforms taking the largest share
    • Graph 5: % share of Costa Coffee’s spend in OOH, by merchant, 2024-26

  3. THE CONSUMER

    • Where consumers bought drinks in the last 12 months
    • Costa is the top choice for OOH drinks, with fast food chains and Starbucks also popular – especially among 16-34s
    • Graph 6: locations from which consumers have bought drinks in the last 12 months, by age, 2025
    • Older drinkers show more loyalty, while younger adults prefer variety; operators should plan for both retention and trial
    • Graph 7: repertoire of locations from which consumers have bought drinks in the last 12 months, by age, 2025
    • Most people buy drinks across multiple formats, not just cafés
    • Dedicated coffee shops must prove they merit a separate, intentional visit
    • Top OOH drinks purchased in the last 12 months, and opportunities beyond coffee
    • Coffee dominates OOH drink purchases, but hot chocolate, tea and juice offer strong growth opportunities
    • Younger consumers drive demand for hot chocolate and iced formats
    • Graph 8: drinks bought out of home in the last 12 months, by age, 2025
    • Cold drinks function as a core product and frequency lever for younger adults
    • Why consumers buy OOH drinks, and how generational differences shape their expectations
    • Self-indulgence dominates OOH drink occasions…
    • …but generational contrasts shape format and service expectations
    • Graph 9: main reasons why consumers buy drinks out of home, by generation, 2025
    • Key factors influencing OOH drink choices
    • Health-driven choices outweigh indulgence, driving demand for wellness drinks
    • Graph 10: select factors that would most encourage consumers to pick one drink over another, 2025
    • Younger consumers choose drinks based on environmental and social impact
    • Social media and visual appeal are critical purchase triggers for younger drink consumers
    • Graph 11: visual appeal as a factor that would most encourage consumers to pick one drink over another, by age group, 2025
    • Operational changes consumers prefer at OOH drink locations
    • Consumers prioritise clear value and exclusive member deals over ‘shrinkflation’ and low-cost alternatives…
    • Graph 12: select operational changes that consumers would most prefer OOH locations where they buy drinks from to make due to rising costs, 2025
    • …driving targeted promotions to win price-sensitive 16-34s
    • Younger consumers are more willing than older cohots to pay for premium add-ons or accept dynamic pricing
    • Graph 13: select operational changes that consumers would most prefer OOH locations where they buy drinks from to make due to rising costs, by age group, 2025
    • Consumers show stronger tolerance for menu reduction than for lower-cost store formats
    • Graph 14: operational changes that consumers would most prefer OOH locations where they buy drinks from to make due to rising costs, 2025
    • OOH drink purchasing habits
    • Younger consumers link OOH drinks to health and experience, reinforcing the need for food pairing and immersive formats
    • Graph 15: behaviours towards buying OOH drinks, 2025
    • Younger consumers’ pride in UK brands abroad strongly aligns with their awareness of global drink trends
    • Graph 16: behaviours towards buying OOH drinks, 2025
    • Younger consumers express strong interest in experimental drinks…
    • …but purchase decisions remain anchored in familiarity
    • Graph 17: select factors that would most encourage consumers to pick one drink over another, by age groups, 2025

  4. PRODUCT, INNOVATION AND MARKETING

    • Younger consumers are driving a story of globalisation in drinks
    • UK operators accelerate global drink adoption with matcha and culturally inspired menus
    • Coffee and tea brands expand globally, with new sites in London, Amsterdam, Dubai, and Latin America during late 2025
    • QSR brands move into speciality beverages with new drink-led concepts in the US and UK
    • Trading Post Coffee Roasters achieves carbon-neutral status, aligning with rising consumer demand for ethical brands
    • UK coffee operators introduce tech-driven and grab-and-go formats to meet demand for speed and convenience
    • Premium coffee and wellness concepts launch in London, blending food pairing and experiential formats

  5. APPENDIX

    • Market definition
    • The market
    • Forecast methodology
    • Forecast methodology – fan chart
    • Market size and forecast of the cafés and coffee shops market
    • Market forecast and prediction intervals (value)
    • The consumer
    • Consumer research questions
    • Consumer research methodology
    • Repertoire analysis methodology
    • Other data source methodologies
    • Snoop SpendMapper methodology
    • Abbreviations

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