Stay ahead of the curve and secure future growth for your business with Mintel’s UK Coffee Market Report 2023. Our full report is packed with consumer-led market intelligence, the latest trends and consumer behaviours affecting the UK coffee industry. Get a 360° view of the market including market size, share and forecasted growth over the next five years.
A selection of key insights and core topics covered in the report are detailed below.
Key Issues Covered in this Report
- The impact of the income squeeze on the market and the outlook for the next five years.
- Key new product development trends in the category and future opportunities.
- Usage of coffee and key demographics.
- Main reasons for drinking coffee, including to enjoy the taste and for energy.
- Selected attitudes and behaviours related to coffee, including those linked to drinks recipes and caffeine.
UK Coffee Market – Current Landscape
The ongoing income squeeze has hit volume sales of coffee, however rising inflation has driven retail value sales of coffee. This is despite consumers trading down, with own-label instant coffee seeing an almost 20% increase in value sales for 2022/23. Market growth is likely to be sluggish in 2024, but value sales are expected to pick up pace after that.
UK Coffee Market – Consumer Trends
Enjoying the taste is the top reason consumers gave for drinking coffee, with almost two-thirds agreeing. However, Mintel’s market research also found that less than half of coffee drinkers under the age of 35 do not drink coffee for the taste. Flavoured coffees continue to warrant NPD in light of this. Recipe ideas also hold potential for brands to reach drinkers less keen on the taste of coffee, as many find experimenting with new coffee recipes appealing.
Caffeine is a source of concern for many, two in five coffee drinkers are trying to cut down on it. This is a substantial threat to the UK coffee market, especially as decaf is failing to win over many of those concerned. However, interest in information about caffeine levels and products offering varied levels of it suggest potential for retaining usage.
Mintel’s full report features even more analysis of the UK coffee market, alongside the latest innovation and marketing activity, and recommendations for future growth in the industry. Readers of this report may also be interested in Mintel’s UK Cafes and Coffee Shops Market Report 2023.
More About this Report
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:
- Instant coffee – through various processes, coffee is dehydrated into the form of powder or granules for sale and prepared by adding these to hot water.
- Roast and ground – when coffee is sold in the form of coffee beans or when the coffee beans are sold ready-ground.
- Coffee pods feature pre-packaged ground beans sold in their own filter to make the coffee-making process easier. Included in this category are products for open and closed coffee systems, such as those that take a cartridge or pod.
Expert Analysis from a Drinks Industry Specialist
This report, written by Kiti Soininen, a leading Food & Drink Industry analyst, delivers in-depth commentary and analysis to highlight current trends in the UK Coffee market and add expert context to the numbers.
Its intrinsic caffeine content is both a key strength and a significant weakness for coffee. More variety of, and information on, caffeine levels is keenly needed.
Kiti Soininen
Head of UK Food and Drink Research
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Executive Summary
- Opportunities for the coffee retail market
- Market dynamics and outlook
- What consumers want and why
- Innovation and marketing
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Market Size
- Graph 7: retail value sales of coffee, 2018-23
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Market Forecast
- Sluggish 2024, growth to pick up later
- Growth to pick up with rising real incomes
- Graph 8: value and volume retail coffee sales annual change, 2010-14
- Less extensive scope for trading up from instant
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Market Segmentation
- Graph 9: retail value sales of coffee, by segment, 2021-23
- Income squeeze fuels trading down
- Graph 10: retail value and volume sales of RTD coffee, 2019-23
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Market Share
- Graph 11: leading brands’ value sales in the retail instant coffee market, 2020/21-2022/23
- Trading down takes its toll on many leading brands
- CCL’s entry will heat up the competition
- Graph 12: leading brands’ value sales in the retail ground coffee (excl pods) and coffee beans market, 2020/21-2022/23
- Graph 13: leading brands’ value sales in the retail coffee pods market, 2020/21-2022/23
- Own label, Starbucks and Kenco gain ground in pods
- Graph 14: leading brands’ value sales in retail RTD coffee market, 2020/21-2022/23
- Affordability underpins growth of star performers
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Macroeconomic Factors
- Graph 15: GDP, 2021-23
- Graph 16: CPI inflation rate, 2021-23
- Interest rates will rise in importance over the remainder of 2023 and into 2024
- Graph 17: “Have you been affected by any of these issues over the last two months? Please select all that apply.”, 2023
- Graph 18: CPI annual rate, coffee and all food, 2019-23
- Graph 19: the financial wellbeing index, 2016-23
- Graph 20: the financial confidence index, 2016-23
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Social, Environmental and Legal Factors
- Government measures on HFSS food and drink slow to roll out
- RTDs and coffee powders with added sugar come under HFSS
- HFSS is defined by nutrient profile
- Stress and sleep issues affect most consumers
- Interest in sustainability expected to rebound
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Usage of Coffee
- Four in five drink coffee at home
- Graph 21: types of coffee used at home, 2020-23
- Instant coffee continues to lead on usage…
- Graph 22: types of coffee drunk, by age, 2023
- Instant/micro-ground instant/coffee mixes enjoy most frequent usage
- Graph 23: frequency of drinking coffee, by type, 2023
- Graph 24: usage of standard and decaffeinated coffee, 2021-23
- A pressing need to combat taste concerns
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Reasons For Drinking Coffee
- Graph 25: reasons for drinking coffee, 2023
- Cater to youngsters not drinking coffee for its taste
- Graph 26: drinking coffee to enjoy the taste and drinking coffee mixes and RTDs, by age, 2023
- Flavoured NPD is firmly warranted
- Flavoured variants feature to a limited extent in black coffee
- Graph 27: reasons for drinking coffee, by age, 2023
- Graph 28: taste/indulgence and focus/energy/performance as reasons to drink coffee, by age, 2023
- Graph 29: interest in healthier coffees, by age, 2023
- …through fortification or messaging Opportunities
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Behaviours Related To Coffee
- The income squeeze opens up opportunities for affordable segments
- Graph 30: behaviours related to coffee, 2023
- Drinks recipes offer scope for instant coffees to capitalise on disrupted habits
- Graph 31: making cold coffee at home, switching to cheaper coffee and interest in new recipes, by age, 2023
- …including by leaning into the cold drink opportunity
- Graph 32: instant coffee drinkers’ attitudes and behaviours linked to making coffee drinks, 2023
- Untapped potential in recipe ideas
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Attitudes Towards Coffee
- Graph 33: attitudes towards coffee, 2023
- High interest in caffeine information and variety
- Graph 34: interest in more information about caffeine in different coffee and in coffees with different caffeine levels, by age, 2023
- RTD and international launches offer cues on caffeine
- RTD and international brands call out their high caffeine content
- …and spotlight links between low caffeine content and times of day
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Launch Activity and Innovation
- Graph 35: new product launches in the coffee market, by launch type, 2019-23
- Packaging updates look to dial up quality, value and standout
- Graph 36: new product launches in the coffee market, by ethical claim, 2019-23
- Coffee pouches look to improve recycling…
- …as do coffee pods
- Three in five launches reference environmental schemes or efforts
- Smaller players highlight forecast conservation and impact of Fairtrade
- Graph 37: share of flavoured (non-plain) launches in the coffee market, 2019-23
- …across milky and non-milky coffees
- A handful of launches look to offer health benefits
- Brand extensions continue
- Multiserves attract launches in RTDs…
- …as do indulgent flavours and acquisitions
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Advertising and Marketing Activity
- Graph 38: total above-the-line, online display and direct mail advertising on coffee products, 2020-23
- Taste continues to feature in recent campaigns
- Jacobs Douwe Egberts supports Kenco and L’Or
- Kenco marks centenary with “Made to Uplift”
- Nescafé puts sustainability to the fore in recent campaigns
- Nescafé’s “Expect More From Every Cup” campaign
- Lavazza spotlights sustainability
- Lavazza and Nespresso continue to work with brand ambassadors
- RTD coffee continues to attract sizeable adspend
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Brand Research
- Key brand metrics
- Leading coffee brands enjoy near-universal awareness
- Graph 39: attitudes towards selected brands in the coffee market, 2023
- Graph 40: brand personality – macro image, selected brands in the coffee market, 2023
- Graph 41: brand personality – micro image, selected brands in the coffee market, 2023
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APPENDIX
- Supplementary data: market share
- Supplementary data: advertising and marketing activity
- Market forecast data and methodology
- Report scope and definitions
- Methodology
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