The cost of living crisis benefited the UK coffee market at the expense of foodservice venues, and boosted usage of instant coffee. A significant threat to the coffee market comes from widespread and growing efforts to reduce caffeine intake among UK consumers.
The cost of living crisis and rapid inflation have benefited the retail coffee market, also driving trading down in this category, both within and between segments. Although the squeeze is easing, this behaviour has continued into 2024. The feelgood factor linked to savvy choices will ensure value remains key even as consumer confidence improves, and will continue to favour retail over coffee shops.
Widespread and growing efforts to reduce caffeine intake present a significant threat to the coffee market. While these should be a boon for decaffeinated coffee, this segment is so far failing to capitalise on this trend, and coffee drinking occasions are being lost. Concerns over the decaffeination process – heightened by the spotlight on UPFs – need to be addressed in marketing. Decaf should also be a bigger focus for NPD, given the appetite for more choice in this segment.
Supermarkets are doing this much-loved category a disservice by not better leaning into many consumers’ connoisseur spirit for coffee in-store. Through, for example, POS features that help coffee lovers enhance their knowledge of coffee, or in-store coffee grinders, supermarkets can create an engaging environment that also encourages trading up.
For the purposes of this report, Mintel has used the following definitions:
This report covers coffee consumption in the retail market only. Therefore, it excludes coffee shops or other outlets where coffee is purchased and drunk outside the home. Sales through vending machines and self-serve coffee outlets are also excluded.
The following broad segments make up the coffee retail market:
Separate to the above, the report also includes discussion of and data for RTD coffee drinks in retail.
The market definition includes decaffeinated coffee.
This report was written by Emma Clifford, Mintel’s Associate Director – Food and Drink. Emma joined the Food and Drink team in June 2012 and is responsible for researching and writing food reports. Before joining Mintel, Emma worked as a marketing information analyst at Marketforce and gained retail experience from her time working as a fashion distributor at Debenhams head office.
Focus on decaf coffee and enliven supermarkets’ coffee aisles to offset volume losses to foodservice. Functionality and regenerative farming also offer potential.
Emma Clifford
Associate Director – Food and Drink
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