2021
9
UK Coffee Market Report 2021
2021-10-06T04:10:35+01:00
OX1050045
2195
143160
[{"name":"Coffee","url":"https:\/\/store.mintel.com\/industries\/drinks\/coffee"}]
Report
en_GB
“COVID-19 prompted many to trade up between coffee formats, as they sought to recreate the coffee shop experience at home. More remote working going forward will continue to provide support…

UK Coffee Market Report 2021

£ 2,195 (Excl.Tax)

Description

The UK Coffee Market Report identifies consumers’ attitudes towards purchasing and consuming coffee, the impact of COVID-19 and future innovations in the UK coffee market. This report covers the UK coffee market size, market forecast, market segmentation and industry trends in the UK coffee market.

 

Current Landscape of the UK Coffee Market

The COVID-19 pandemic saw many consumers trading up to more expensive coffee formats and investing in coffee makers as people sought to recreate coffee shop experiences at home. While out-of-home occasions will begin to play a bigger role once more in consumers’ lifestyles, this trading up for at-home coffee is likely to remain permanent, with the pandemic accelerating the long-term decline of instant coffee within the UK coffee market according to the instant coffee market’s statistics.

UK Coffee Market Share and UK Coffee Consumption: Trends and Statistics

Further lockdowns and continued working from home for many have continued to support the instant coffee market. Whilst competition from foodservice has reignited as restrictions have eased, investment in coffee-making equipment will for some have made making coffee at home instead of buying it out a long-term switch.

  • UK coffee market size: The instant coffee maket has a retail value of £891M (2021).
  • UK coffee market share: Nescafe (Nestle) are the leading brand in the UK instant coffee market, with a 49% share.
  • 44% of coffee drinkers and buyers agree that standard coffee tastes just as good as premium coffee.
  • 58% of coffee drinkers agree that they would rather drink less coffee than switch to decaffeinated coffee.

Future Trends: UK Coffee Consumption

Mintel’s coffee market analysis indicates that as normal life resumes, people will have less ability to make coffee using the more time-consuming formats at home. The appeal of returning to pre-pandemic habits and out-of-home purchases will become stronger once more. However, the UK coffee market will benefit from more people working from home, as well as sustained interest in quality.

To discover more about the UK Coffee Market Report 2021, read our The Future of Coffee Market Report 2022or take a look at our extensive Coffee Market Research.

Quickly Understand

  • The impact of COVID-19 on the retail UK coffee market.
  • Key trends in recent launch activity to book and opportunities going forward.
  • Explores UK coffee consumption, and where consumers purchase coffee.
  • Consumer behaviours and attitudes related to UK coffee consumption.
  • Explores the coffee market share and UK coffee market size.

Covered in this Report

Products: Instant coffee, roast and ground coffee, coffee pods and decaffeinated coffee.

Brands: Nescafé / Nestlé (Nescafé Gold, Nescafé Original, Nescafé Azera, Nescafé Speciality, Starbucks), Jacobs Douwe Egberts (Kenco Millicano, Douwe Egberts, L’Or, Tassimo), Lavazza (Luigi Lavazza, Lavazza Premium Coffees, Taylors of Harrogate, Cafédirect, Illycaffé, CafePod, Sainsbury’s, Marks & Spencer, Waitrose, Aldi, Tesco, Asda, Pret A Manger, Caffé Nero, Leon, Ueshima Coffee Company, Volcano Coffee, Sendero Speciality Coffee, Rombouts, Little Brazil, Booths.

Expert Analysis from a Specialist in the UK Coffee Market

This report, written by Alice Pilkington, a leading analyst in the Food and Drink sector, delivers in-depth commentary and analysis to highlight current trends in the UK Coffee Market and add expert context to the numbers.

COVID-19 prompted many to trade up between coffee formats, as they sought to recreate the coffee shop experience at home. More remote working going forward will continue to provide support to the UK coffee market. Bringing ethical certifications to the fore of brand messaging will be crucial given how COVID-19 has accelerated a sustainability focus, whilst interest in coffee with functional benefits holds considerable opportunities.

Alice Pilkington
Food and Drink Analyst

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • COVID-19: market context
    • Economic and other assumptions
    • Products covered in this Report
    • Excluded
  2. Executive Summary

    • Impact of COVID-19 on coffee
      • Figure 1: Short, medium and long-term impact of COVID-19 on coffee, 2021
    • The market
    • Volume sales boom for coffee due to COVID-19 in 2020
    • 2021 sales set to fall as COVID-19 boost wanes
    • Market expected to return to slight growth in 2022
      • Figure 2: COVID-19 scenario value forecasts for coffee 2016-26
    • Ground coffee and coffee pods continue to chip away at instant coffee’s lead
      • Figure 3: UK retail value sales of coffee, by segment, 2019-21
    • UN report declares climate change is ‘code red for humanity’
    • Companies and brands
    • Nescafé remains leader in instant coffee sales
      • Figure 4: Leading brands’ shares in the UK instant coffee market, by value, 2019/20* and 2020/21**
    • Taylors and Cafédirect are big winners in ground coffee; Starbucks and Costa continue to build foothold
      • Figure 5: Leading brands’ shares in the UK ground coffee (excluding coffee pods) and coffee beans market, by value, 2019/20* and 2020/21**
    • Nescafé leads coffee pod segment, but coffee shop brands encroach
      • Figure 6: Leading brands’ shares in the UK coffee pods market, by value, 2019/20* and 2020/21**
    • Nestlé continues to lead on launch activity in 2020
    • High street brands continue to expand into retail space
    • Nestlé continues to dominate ad spend in 2021
    • The consumer
    • Instant coffee remains the most used coffee type
      • Figure 7: Types of coffee used at home, 2019 and 2021
    • Ground/whole bean coffee sees substantial growth in frequent usage
      • Figure 8: Frequency of usage of selected coffee types, 2020* and 2021
    • Decaffeinated coffee offers huge opportunity for coffee brands
    • 44% always looking for new coffees to try
      • Figure 9: Behaviours related to coffee, 2021
    • A quarter of coffee buyers would pay more for a low carbon footprint
      • Figure 10: Factors that people would pay more for in a coffee product, 2021
    • 48% find coffee products with functional benefits appealing
      • Figure 11: Attitudes towards coffee, 2021
    • 45% agree that standard coffee tastes just as good as premium coffee
    • Grinding coffee beans at the supermarket appeals to 44%
  3. Issues and Insights

    • Ethical certifications no longer provide enough stand-out
    • 44% are always looking for new coffees to try
    • Coffee products with functional benefits appeal to 48%
  4. The Market – Key Takeaways

    • Volume sales boom for coffee due to COVID-19 in 2020
    • 2021 sales set to fall as COVID-19 boost wanes
    • Market expected to return to slight growth in 2022
    • Ground coffee and coffee pods continue to chip away at instant coffee’s lead
    • UN report declares climate change is ‘code red for humanity’
  5. Market Size and Performance

    • Impact of COVID-19 on coffee
      • Figure 12: Short, medium and long-term impact of COVID-19 on coffee, 2021
    • Volume sales boom for coffee due to COVID-19 in 2020
      • Figure 13: UK retail value and volume sales of coffee, 2016-21
  6. Market Forecast

    • 2021 sales set to fall as COVID-19 boost wanes
    • Market expected to return to slight growth in 2022
      • Figure 14: Market forecast for the value of the UK coffee market, at current prices, 2021-26
      • Figure 15: Market forecast for the volume of the UK coffee market, at current prices, 2021-26
    • Market drivers and assumptions
      • Figure 16: Key drivers affecting Mintel’s market forecast, 2015-25 (prepared on 5 March 2021)
    • Forecast methodology
  7. COVID-19 Scenario Performance

    • Mintel’s approach to predicting the impact of COVID-19
    • Fundamental differences in how COVID-19 is affecting consumer markets
    • The risk of vaccine-resistant strains of COVID-19 adds uncertainty
      • Figure 17: COVID-19 scenario value forecasts for coffee, 2016-26
      • Figure 18: COVID-19 scenario volume forecasts for coffee, 2016-26
    • A small sales difference between Mintel’s rapid COVID recovery and extended COVID disruption scenarios in 2021
    • A setback to the vaccination programme could extend social distancing into 2022
    • Mintel’s rapid recovery scenario indicates a near return to pre-pandemic sales by 2022
    • COVID-19 market disruption: risks and outcomes
      • Figure 19: Summary of Mintel scenario expectations and the impact on the foodservice market, 2021
  8. Market Segmentation

    • Ground coffee and coffee pods continue to chip away at instant coffee’s lead
      • Figure 20: UK retail value and volume sales of coffee, by segment, 2019-21
  9. Market Drivers

    • Coffee prices surge due to freak weather in Brazil
    • Brexit appears to have little impact on coffee market
    • UN report declares climate change is ‘code red for humanity’
    • Drinking coffee linked to lower risk of liver disease
    • Ageing population will lend long-term support to instant coffee
  10. Companies and Brands – Key Takeaways

    • Nescafé remains leader in instant coffee sales
    • Taylors and Cafédirect are big winners in ground coffee; Starbucks and Costa continue to secure foothold
    • Nescafé leads coffee pod segment, but coffee shop brands encroach
    • Nestlé continues to lead on launch activity in 2020
    • High street brands continue to expand into retail space
    • Nestlé continues to dominate ad spend in 2021
  11. Market Share

    • Nescafé remains leader in instant coffee sales
    • Nescafé Gold continues to build on 2020 boost
      • Figure 21: Leading brands’ sales and share in the UK instant coffee market, by value and volume, 2018/19-2020/21
      • Figure 22: Leading manufacturers’ sales and share in the UK instant coffee market, by value and volume, 2018/19-2020/21
    • Taylors of Harrogate and Cafédirect are big winners in thriving ground coffee segment
    • Continued growth of Starbucks and Costa points to enduring desire to recreate coffee shop experience at home
      • Figure 23: Leading brands’ sales and share in the UK ground coffee (excluding coffee pods) and coffee beans market, by value and volume, 2018/19-2020/21
    • Nescafé leads coffee pod segment; coffee shop brands encroach on its share
      • Figure 24: Leading brands’ sales and share in the UK coffee pods market, by value and volume, 2018/19-2020/21
  12. Launch Activity and Innovation

    • Nestlé continues to lead on launch activity in 2020
      • Figure 25: New product launches in the UK coffee market, by top 10 companies, 2017-21 (sorted by 2020)
    • 2021 sees Nestlé channel artisan coffee trend in new launches
      • Figure 26: Nescafé’s new artisan-style launches, 2021
      • Figure 27: Nescafé Azera My Way Latte Instant Coffee Beverage, 2021
    • Nescafé Gold Iced range launched for Summer 2021
    • Nescafé Original relaunches with an improved recipe
      • Figure 28: Nescafé Original relaunches with smoother recipe, 2021
    • Supermarket and discounter activity in 2020 driven by range extensions and relaunches
    • Taylors of Harrogate aims to ‘combat coffee confusion’ with new range
    • Taylors core range sees packaging refresh
      • Figure 29: Recent NPD and new packaging designs from Taylors of Harrogate, 2020-1
    • High street brands continue to expand into retail space
    • Pret, Caffè Nero and Leon explore new retail channels
      • Figure 30: Recent examples of high street brands entering the retail coffee space, 2020-21
    • Nestlé launches Starbucks seasonal favourites
      • Figure 31: Nestlé launches seasonal Starbucks variants and extends Nespresso and Dolce Gusto offerings, 2020-21
    • Japanese Ueshima Coffee Company enters UK market for the first time
      • Figure 32: Ueshima Coffee Company enters into UK coffee market, 2021
    • Ethical claims remain dominant in launches but provide little stand-out
      • Figure 33: New product launches in the UK coffee market, by top 10 claims, 2017-21 (sorted by 2020)
    • Bags and pods continue to attract the most launches in 2020
      • Figure 34: New product launches in the UK coffee market, by format, 2017-21
    • Waitrose claims supermarket first with launch of compostable pods…
      • Figure 35: Recent examples of compostable coffee pods, 2020-21
      • Figure 36: Lavazza Eco Caps Espresso Dek Cremoso Capsules explaining the compostable chain, 2021
    • …while Rombouts unveils a world first with home compostable filters
      • Figure 37: Rombouts Decaf One Cup Filter Coffee giving details on what its home compostable filters are made of 2021
    • Nestlé launches the first-ever plant-based coffee pod
      • Figure 38: Examples of Nescafé Dolce Gusto’s new plant-based pod range, 2021
    • Decaffeinated coffee made up 8% of launches in 2020
      • Figure 39: Recent examples of decaffeinated products calling out preservation of flavour and naturalness, 2020
  13. Advertising and Marketing Activity

    • Nestlé continues to dominate ad spend in 2021
      • Figure 40: Total above-the-line, online display and direct mail advertising expenditure on coffee, by leading advertisers, 2019-21 (sorted by 2020)
    • Nescafé Gold Blend Roastery focuses on the expertise behind it
      • Figure 41: Total above-the-line, online display and direct mail advertising expenditure on coffee, by leading brands, 2019-21 (sorted by 2020)
    • Nescafé Gold Blend helps to make moments matter…
    • …while Nescafé Original focuses on the morning routine
    • Azera My Way Latte and Craft Coffee launches supported by new campaigns
    • Taylors of Harrogate wonders what the world would be like if everything was so simple
    • Lavazza updates its ‘More than Italian’ campaign emphasises its Italian origins in Christmas campaign
    • Cafédirect returns to TV screens after a 10-year hiatus
    • Nielsen Ad Intel coverage
  14. Brand Research

    • Brand map
      • Figure 42: Attitudes towards and usage of selected brands, 2021
    • Key brand metrics
      • Figure 43: Key metrics for selected brands, 2021
    • Nescafé Gold Blend leads on consistently high-quality perceptions
      • Figure 44: Attitudes, by brand, 2021
    • Taylors of Harrogate is seen as the most exclusive brand
      • Figure 45: Brand personality – Macro image, 2021
    • Nescafé Gold Blend and Kenco share top spot for deliciousness
      • Figure 46: Brand personality – Micro image, 2021
    • Brand analysis
    • Taylors of Harrogate leads on being a special brand
      • Figure 47: User profile of Taylors of Harrogate, 2021
    • Tassimo matches Nespresso on innovation
      • Figure 48: User profile of Tassimo, 2021
    • Nespresso is seen as the most stylish brand
      • Figure 49: User profile of Nespresso, 2021
    • Nescafé Gold Blend is the most trusted brand
      • Figure 50: User profile of Nescafé Gold Blend, 2021
    • Lavazza is seen as an authentic brand by 23%
      • Figure 51: User profile of Lavazza, 2021
    • Kenco matches Nescafé Gold Blend in terms of positive endorsement
      • Figure 52: User profile of Kenco, 2021
    • Reading word clouds
  15. The Consumer – Key Takeaways

    • Ongoing lockdowns in first half of 2021 continue to provide boost to retail coffee
    • Long-term focus on sustainability predicted
    • Ground/whole bean coffee sees significant growth in frequent usage
    • Decaffeinated coffee offers huge opportunity for coffee brands
    • 44% always looking for new coffees to try
    • A quarter of coffee buyers would pay more for a low carbon footprint
    • 48% find coffee products with functional benefits appealing
  16. Impact of COVID-19 on Consumer Behaviour

    • Ongoing lockdowns in first half of 2021 continue to provide boost to retail coffee
    • COVID-19 prompts some to make meal and beverage occasions more of an event
    • Easing of restrictions will have seen some shift back to out-of-home consumption
    • Increased working from home predicted to be long-term consequence of COVID-19
    • Pandemic sees significant changes in grocery shopping habits
    • Long-term focus on sustainability predicted
    • COVID-19 worries affect people’s sleep
  17. Usage of Coffee

    • Instant coffee retains top position…
    • …but ground/whole bean coffee sees significant growth in frequent usage
      • Figure 53: Types of coffee used at home, 2019 and 2021
    • Coffee pod usage remains steady
      • Figure 54: Frequency of usage of coffee, by type, 2020* and 2021
  18. Ownership of Coffee Systems

    • Coffee pod machines see boost in 2021…
      • Figure 55: Types of coffee systems in the household, 2020 and 2021
    • …as do espresso/cappuccino and bean to cup machines
  19. Where Coffee is Bought

    • Supermarkets are the most popular in-store location to buy coffee
    • 22% buy their coffee at discounters
      • Figure 56: Where coffee is bought, 2021
    • 27% bought coffee from online supermarkets
    • Increased penetration of online shopping predicted going forward
  20. Behaviours Related to Coffee

    • Decaffeinated coffee offers huge opportunity for coffee brands
      • Figure 57: Behaviours related to coffee, 2021
    • Providing reassurance around flavour remains pertinent for decaffeinated variants
      • Figure 58: Recent examples of coffee brands providing taste reassurance on-pack in decaffeinated variants, 2021
    • Targeting the evening occasion could help decaffeinated coffee gain a new role
      • Figure 59: Recent examples of herbal tea with a night-time positioning, 2021
    • Building associations between coffee and relaxation is possible
      • Figure 60: Wildcrafter Spiritual Chill Decaffeinated Organic Ground Coffee – US, 2020
    • Other unlikely categories targeting sleep and relaxation can offer inspiration
      • Figure 61: Recent examples of unexpected categories targeting sleep and relaxation, 2019-21
    • 44% always looking for new coffees to try
    • Supermarkets could look to a ‘Coffee of the Month’ and providing more on-shelf knowledge
      • Figure 62: Sainsbury’s world of coffee display, 2021
    • Smaller packs and variety bundles can help encourage experimentation
    • Coffee subscription services and online stores can also offer cues
  21. Factors that People Would Pay More For in Coffee

    • Deforestation and fair wages are the most influential to pay more
      • Figure 63: Factors that people would pay more for in a coffee product, 2021
    • Putting tangible numbers on what brands pay workers can help consumers differentiate
      • Figure 64: Cafédirect No.3 Smooth Freeze Dried Instant Coffee calling out going above and beyond Fairtrade on back-of-pack, 2021
    • More clarification is needed on Rainforest Alliance coffee helping to prevent deforestation
    • Brands can also look to making reforestation and conservation more centre-stage in messaging
      • Figure 65: Recent examples of US coffee variants making reforestation more prominent in messaging, 2021
    • A quarter of coffee buyers would pay more for a low carbon footprint
      • Figure 66: Recent examples of UK coffee brands calling out carbon neutral accreditations, 2020
    • Providing tangible details also chimes in relation to carbon footprint
      • Figure 67: The Meatless Farm Co. Meat free mince calling out water and carbon reductions, 2018
  22. Attitudes towards Coffee

    • 48% find coffee products with functional benefits appealing
      • Figure 68: Attitudes towards coffee, 2021
    • Boosting energy is key area of interest for consumers
    • Coffee brands can push the natural properties of caffeine more
      • Figure 69: Recent example of a coffee product with more caffeine, 2020
    • B vitamins can also tap into interest in energy
      • Figure 70: Recent examples of fruit juice and smoothies which make energy-related claims, 2020
    • Ginseng also holds potential
      • Figure 71: Recent examples of coffee products in Italy containing ginseng, 2019-21
    • 45% agree that standard coffee tastes just as good as premium coffee
    • Providing virtual tasting experiences can encourage people to notice the difference
    • Brands can utilise online supermarket data to send samples
    • Interest in personalised advice still suggests considerable openness of this cohort
    • Grinding coffee beans at the supermarket would be appealing for 44%
      • Figure 72: Waitrose Unpacked in-store coffee beans and grinder display, 2019
  23. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
  24. Appendix – Market Share

      • Figure 73: Leading manufacturer sales and share in the UK ground coffee (excluding coffee pods) and coffee beans market, by value and volume, 2018/19-2020/21
      • Figure 74: Leading manufacturer sales and share in the UK coffee pods market, by value and volume, 2018/19-2020/21
  25. Appendix – Central Forecast Methodology

    • Market forecast and prediction intervals
      • Figure 75: Market forecast and prediction intervals for UK value sales of coffee, 2021-26
      • Figure 76: Market forecast and prediction intervals for UK volume sales of coffee, 2021-26
    • Market drivers and assumptions
      • Figure 77: Key drivers affecting Mintel’s market forecast, 2021-26
    • Forecast methodology
  26. Appendix – COVID Scenario Performance Methodology and Assumptions

    • Scenario performance
      • Figure 78: Scenario performance for value retail sales of coffee, 2016-26
      • Figure 79: Scenario performance for volume retail sales of coffee, 2016-26
    • Rapid COVID recovery, central and extended COVID disruption scenarios outline
    • Scenario methodology

About the report

This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

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Mintel’s proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.

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