The return of Autumnal weather brings forth a
time of change. Leaves transform from their healthy green to spectacular red
and yellow, the drop-in temperature sees the rush for comfortable jumpers,
while the return
of pumpkin spice lattes is rejoiced by a certain demographic up and
down the country.
This return is only going to further support
the excellent growth seen by the UK coffee market.
Growth
There are two metrics which clearly outline
the UK’s obsession with coffee. The last five years have seen the UK coffee
market grow by 77% from £5.4 billion in 2012 to £9.6
billion in 2017.
While the sheer number of actual coffee
establishments in the UK has seen impressive growth, from less than 10,000 ten
years ago, to an estimated 23,000 coffee outlets in the UK.
This number is expected to continue to grow further with marketing research company Allegra predicting that there will be as many as 32,000 coffee outlets by 2025 and will outnumber pubs by 2030.
This number is expected to continue to grow further with marketing research company Allegra predicting that there will be as many as 32,000 coffee outlets by 2025 and will outnumber pubs by 2030.
Why?
There are two major factors which are pushing
this growth, changes in social trends and the younger generations.
The 16-34 year old demographic is less likely
to consume coffee than the older amongst us, but when they do it is
more likely to be in coffee shops. This is either to get a quick hit of
caffeine while on the move, or what is becoming increasingly more common, to
socialise or work.
In line with changing opinions and mindsets
regarding health in the UK, coffee shops are overtaking the traditional UK
local pub as the hub of activity for millennials to socialise.
And coffee shops have been quick to realise
this by offering
a large array of options to appeal to this demographic’s tastes.
Tapping into more milk-based coffee, such as cappuccino, flat whites and
aforementioned lattes to appeal to a younger demographic.
It is also not just coffee which has been
changing to appeal to millennials. Tea, the second most popular drink in the
world, which seen consumption fall over the last decade, has been taking bold
steps.
Mintel
reports that companies have been
rolling out variants of herbal and green tea to replace or rival traditional
black tea, while a raft of new tea companies have been supplying establishments
with organic and vegan wholesale tea. This
has even seen supermarket chains remove ‘ordinary’ teas in favour of new herbal
infusions.
Future
But can this coffee surge continue?
The main concern in the market is that the
impressive growth has only led to saturation. Due to the amount of revenue on
offer, specialist coffee chains have been adding locations at an extraordinary
rate and often in overlapping areas.
The revenue has also led to new chains, such
as Canadian company Tim Hortons entering the UK market, while many
non-specialist establishments such as Greggs and McDonalds have been attempting
to gain market share. Whereas independent coffee shops continue to rival their
more resourceful competitors on a local level.
This is not forgetting the secondary concern
of a change to social patterns, highlighted by the growing trend
in tea, which has seen a number of new tea shops opening in the hope
of offering an attractive alternative to a new wave of consumers.
There is no doubt that coffee and tea will
remain a profitable business due to the low cost of overheads and produce, even
with the inclusion of more expensive and artisan ingredients.
But will there simply not be enough demand to guarantee
profit for all?
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