The UK Coffee Market Report identifies consumers’ attitudes towards purchasing and consuming coffee, the impact of the cost of living crisis and future product developments 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.
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Current Landscape: UK Coffee Market
The many years of continuous volume growth in the UK coffee market sales are set to end in 2022. This is underpinned by the cost of living crisis and the end of COVID-19 restrictions, which has reduced at-home drinking occasions and increased competition from coffee shops. The high levels of inflation in the UK coffee market in 2022 have also made the category especially vulnerable to cutbacks and caused trading down within each segment, particularly in the instant coffee market.
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UK Coffee Market Share and UK Coffee Consumption: Trends and Statistics
The continued squeeze on real incomes expected throughout 2023 is set to see the volume sales for the UK coffee market decline further. A current challenge for the UK coffee market is that 39% of consumers who drink and buy coffee are trying to reduce their caffeine consumption. This is primarily driven by concerns over this ingredient’s impact on health, sleep and emotional wellbeing.
However, Mintel’s coffee market report identifies that there are opportunities in the near future for lab-grown coffee. Half of coffee drinkers under 45 say they would be interested in trying lab-grown coffee is very promising for the transition of this concept to reality.
- UK coffee market size: The instant coffee market has an estimated retail value of £903M in 2022.
- UK coffee market share: Own-label instant coffee market posted impressive volume growth of 8% and value growth of 15% in the year to July 2022.
- 38% of consumers would be willing to buy their coffee from discount stores to try and save money.
- 29% of adults have a coffee pod machine in their household.
UK Coffee Market: Future Trends
Mintel’s coffee market report indicates that product development around decaffeination will be vital to unlocking the sizeable growth potential of decaf coffee in the UK coffee market. The UK coffee consumption is changing. Given the strong demand for more choices of decaf coffee products, the heightened wellness trend, and the increased sustainability focus, now is the time to invest in the decaf segment of the market.
The UK coffee market will also benefit from the long-term shift to remote working, while sustained interest in quality will see the premiumisation trend flourish amid trading up.
To discover more about the UK Coffee Market Report 2022, read our The Future of Coffee Market Report 2022, or take a look at our extensive Coffee Market Research.
Quickly Understand
- The impact of the cost of living crisis on the UK coffee market.
- The outlook for the UK coffee market in the re-emergence from the pandemic and recovery up to 2027.
- The latest new product development trends in the instant coffee market and the wider UK coffee market.
- Covers UK coffee consumption and purchasing behaviours and how these would be affected by the need to save money.
- Consumers’ behaviours and attitudes towards coffee and caffeine.
- Explores UK coffee market share and UK coffee market size.
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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, Aldi, Lidl.
Expert Analysis from a Specialist in the UK Coffee Market
This report, written by Emma Clifford, a leading senior analyst in the Drink industry, delivers in-depth commentary and analysis to highlight current trends in the UK coffee market and add expert context to the numbers.
A reversal in the previously flourishing UK coffee market retail’s performance in 2022 is underpinned by the end of COVID-19 restrictions and cutbacks amid the cost of living crisis. Many consumers’ efforts to consume less caffeine also present a challenge. Addressing the various barriers towards decaffeinated coffee is needed to release its substantial growth potential.”
Emma Clifford
Associate Director – Food and Drink Research
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Overview
- Key issues covered in this Report
- Products covered in this Report
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Executive Summary
- The five-year outlook for the coffee market
- Figure 1: Category outlook, 2022-27
- The market
- Market size and forecast
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- Figure 2: Market forecast for the value of the UK coffee retail market, 2017-27
- All coffee segments fall into volume decline in 2022
- Figure 3: UK retail value sales of coffee, by segment, 2020-22
- High levels of inflation in coffee
- Various routes to economising on coffee
- More research into the health benefits of coffee
- Companies and brands
- Own-label is the big winner
- Figure 4: Leading brands’ value sales in the UK retail instant coffee market, 2019/20-2021/22
- Premiumisation and indulgence continues to drive NPD
- Adspend on coffee almost returns to pre-pandemic levels in 2021
- The consumer
- Financial situation influences usage; usage of coffee mixes and RTD coffee has risen
- Figure 5: Types of coffee used at home, 2019-22
- Instant coffees enjoy most frequent usage
- Figure 6: Frequency of drinking coffee, by type, 2022
- Usage of decaf ebbs in 2022
- Figure 7: Usage of standard and decaffeinated coffee, 2021-22
- Sustainability concepts resonate widely
- Figure 8: Behaviours related to coffee, 2022
- Address concerns over the decaffeination process; appetite for more choice of decaf coffee
- Figure 9: Behaviours related to caffeine, 2022
- Look to low-caffeine options; educate consumers about cold brew coffee
- Figure 10: Attitudes towards coffee, 2022
- The five-year outlook for the coffee market
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Issues and Insights
- Investing in decaf and low-caffeine coffee NPD will reap rewards
- Address concerns over the decaffeination process
- Big potential in lab-grown coffee
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Market Size and Performance
- Sales edged up in 2021, following the 2020 boom
- Volumes set to fall by 3% in 2022
- Figure 11: UK retail value and volume sales of coffee, 2017-22
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Market Forecast
- The five-year outlook for the coffee market
- Figure 12: Category outlook, 2022-27
- Further volume decline expected for 2023, before a return to growth
- Figure 13: Market forecast for the volume of the UK coffee retail market, 2017-27
- Value sales to return to strong growth
- Figure 14: Market forecast for the value of the UK coffee retail market, 2017-27
- Learnings from the last income squeeze
- Forecast methodology
- The five-year outlook for the coffee market
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Market Segmentation
- All coffee segments fall into decline in 2022
- Figure 15: UK retail value and volume sales of coffee, by segment, 2020-22
- The RTD market has exploded
- Figure 16: UK retail value and volume sales of RTD coffee, by segment, 2019-22
- All coffee segments fall into decline in 2022
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Market Drivers
- High levels of inflation in coffee
- Figure 17: CPI annual rate, coffee and food, 2019-September 2022
- Inflation is the key concern for consumers and brands…
- …and despite government support, energy prices are still a major concern
- Rising interest rates mean that the pressure will move up to middle- and higher-income households
- High inflation and rising interest rates will weigh down the post-COVID recovery
- Consumer spending power will be curbed
- Consumers’ financial wellbeing has fallen from the highs of 2021…
- Figure 18: Household financial wellbeing index, 2016-22
- …and most people are feeling the effects of price rises
- Various routes to economising on coffee
- Figure 19: Most appealing ways to save money on coffee at home, 2022
- Ownership of coffee systems plateaus in 2022
- Figure 20: Types of coffee systems in the household, 2020-22
- More research into the health benefits of coffee
- HFSS food and drink store location restrictions come into place in 2022
- RTD coffee and coffee mixes fall within the scope of regulations
- New rules on the advertising of HFSS food and drink delayed to 2024
- Widespread problems around stress and sleep
- High levels of inflation in coffee
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Market Share
- Own-label is the big winner in instant coffee
- Figure 21: Leading brands’ sales and share in the UK retail instant coffee market, by value and volume, 2019/20-2021/22
- Mixed performances in ground coffee
- Market leader Taylors loses share
- Café Direct and Costa post strong growth
- Figure 22: Leading brands’ sales and share in the UK retail ground coffee (excluding coffee pods) and coffee beans market, by value and volume, 2019/20-2021/22
- Nespresso extends its lead in coffee pods
- Figure 23: Leading brands’ sales and share in the UK retail coffee pods market, by value and volume, 2019/20-2021/22
- Starbucks’ strong leadership in RTD coffee slips in 2021/22
- Figure 24: Leading brands’ sales and share in the UK retail RTD coffee market, by value and volume, 2019/20-2021/22
- Own-label is the big winner in instant coffee
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Launch Activity and Innovation
- Premiumisation continues to drive NPD
- Nescafé Azera introduces its second craft coffee collaboration
- L’Or unveils new premium Artiste brand
- Figure 25: Premium instant coffee launches, UK, 2022
- More activity from coffee shop and roaster brands
- Indulgent flavours continue to attract brands’ attention
- Brands add flavoured coffee pods
- Figure 26: L’Or Espresso Flavours Collection Ground Coffee, Caramel and Vanilla flavours, UK, 2022
- A rise in launches of coffee mixes
- Figure 27: New product launches in the UK coffee market, by format, 2018-212
- Brands continue to invest in seasonal NPD
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- Figure 28: Whittard Medium Roast Let Love Brew Ground Single Origin Coffee, UK, 2022
- Coffee bags attract attention from own-label
- Figure 29: Coffee bag launches, UK, 2022
- Brands expand their decaf offering
- Lavazza launches ¡Tierra! Wellness brand
- Figure 30: Lavazza ¡Tierra! Wellness Dewaxed Coffee, UK, 2022
- Steps forward in sustainability
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- Figure 31: New product launches in the UK coffee market, by ethical and environmental claims, 2018-22
- Lavazza launches carbon neutral aluminium capsules
- Nescafé Gold Blend rolls out carbon reduction on-pack messaging
- Figure 32: New packaging for Nescafé Gold Blend Alta Rica, 2022
- A surge in ready-to-drink coffee NPD in 2022
- Figure 33: New product launches in the UK coffee and RTD coffee market, by product type, 2017-22
- Starbucks launches multiserve format
- Figure 34: Starbucks multiserve RTD coffee launches, UK, 2022
- Califia Farms expands its range of cold brew coffees
- Figure 35: Califia Farms Cold Brew RTD coffee launches, UK, 2022
- Costa Coffee adds a new indulgent Frappé range
- Figure 36: Costa Coffee Frappé launches, UK, 2022
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Advertising and Marketing Activity
- Adspend on coffee almost returns to pre-pandemic levels in 2021
- Figure 37: Total above-the line, online display and direct mail advertising expenditure on coffee, by quarter, 2019-22*
- JDE becomes biggest advertiser in 2021
- Figure 38: Total above-the line, online display and direct mail advertising expenditure on coffee, by leading advertisers (sorted by 2021), 2019-22
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- Figure 39: Total above-the line, online display and direct mail advertising expenditure on coffee, by leading brands (sorted by 2021), 2019-22
- Lavazza uses gamification to drive eco message on the metaverse…
- …and launches The Tour digital series
- Pact Coffee’s campaign is a call to action for London
- Nescafé Azera launches latest By Design campaigns
- Figure 40: Nescafé Azera limited edition packaging, UK, 2022
- Coaltown Coffee makes first foray into TV advertising
- Adspend on RTD coffee rockets in 2022
- Figure 41: Total above-the line, online display and direct mail advertising expenditure on RTD coffee, by leading advertisers (sorted by 2021), 2019-22
- Arctic Iced Coffee launches biggest ever marketing campaign
- Nielsen Ad Intel coverage
- Adspend on coffee almost returns to pre-pandemic levels in 2021
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Brand Research
- Brand map
- Figure 42: Attitudes towards and usage of selected brands, 2022
- Key brand metrics
- Low brand commitment is a challenge
- Figure 43: Key metrics for selected brands, 2022
- Brand attitudes: Kenco wins on trust and value for money
- Figure 44: Attitudes, by brand, 2022
- Brand personality: Nescafé Azera and Nespresso have the strongest fun factor
- No one brand strands out on ethics
- Figure 45: Brand personality – Macro image, 2022
- Kenco and Taylors of Harrogate have the most traditional image
- Figure 46: Brand personality – Micro image, 2022
- Brand map
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Usage of Coffee
- 80% of adults are coffee drinkers; 57% drink instant
- Usage of coffee mixes rises in 2022
- Figure 47: Types of coffee used at home, 2019-22
- Instant coffees also enjoy most frequent usage
- Figure 48: Frequency of drinking coffee, by type, 2022
- Overall coffee usage drops among those with less healthy finances
- Usage of decaf ebbs in 2022
- Figure 49: Usage of standard and decaffeinated coffee, 2021-22
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Behaviours related to Coffee
- Sustainability concepts resonate widely
- Widespread interest in coffee refill stations
- Figure 50: Behaviours related to coffee, 2022
- Address the packaging concerns that underpin this interest
- Big potential in lab-grown coffee
- Steps forward in this emerging space
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Behaviours related to Caffeine
- Widespread concerns over the impacts of caffeine
- Huge potential to grow penetration of decaf coffee
- Figure 51: Behaviours related to caffeine, 2022
- Concerns over the decaffeination process need to be addressed
- Figure 52: Raw Bean decaf, 2022
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- Figure 53: Behaviours related to caffeine, by usage of de-caffeinated coffee, 2022
- Appetite for more choice of decaf coffee
- Look to NPD that aligns with evening occasions
- Figure 54: Decaffeinated coffee, 2020-21
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Attitudes towards Coffee
- Look to low-caffeine options
- Figure 55: Attitudes towards coffee, 2022
- Limited NPD in ‘half and half’ coffees
- Figure 56: Coffee blends combining decaf coffee with standard coffee, 2021-22
- Educate consumers about cold brew coffee…
- Figure 57: Cold brew coffee concentrates, 2020-22
- …and promote cold brew serves
- Figure 58: Cold brew coffee bags, 2020-21
- Look to low-caffeine options
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Appendix – Data Sources, Abbreviations and Supporting Information
- Abbreviations
- Consumer research methodology
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Appendix – Forecast Methodology
- Market forecast and prediction intervals
- Figure 59: Market size and forecast for total retail value and volume sales of coffee, 2017-27
- Figure 60: Market forecast and prediction intervals for total retail value sales of coffee, 2022-27
- Figure 61: Market forecast and prediction intervals for total retail volume sales of coffee, 2022-27
- Market drivers and assumptions
- Forecast methodology
- Market forecast and prediction intervals
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Appendix – Market Share
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- Figure 62: Leading manufacturers’ sales and share in the UK retail instant coffee market, by value and volume, 2019/20-2021/22
- Figure 63: Leading manufacturers’ sales and share in the UK retail ground coffee (excluding coffee pods) and coffee beans market, by value and volume, 2019/20-2021/22
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- Figure 64: Leading manufacturers’ sales and share in the UK retail coffee pods, by value and volume, 2019/20-2021/22
- Figure 65: Leading manufacturers’ sales and share in the UK retail RTD coffee, by value and volume, 2019/20-2021/22
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