Coffee market continues to boom
The coffee shop market is continuing to boom with consumers drinking more and operators expanding, claims new research. Michelle Perrett reports.
Despite there being concerns that the market is becoming saturated the coffee sector shows no signs of slowing down, the latest research indicates. Figures from the British Coffee Association (BCA) show that coffee consumption across the nation is continuing to grow.
The research, conducted by the Centre for Economics and Business Research (CEBR), found that the UK’s coffee consumption has soared to 95m cups a day in 2018, up from 70m in 2008, suggesting an increase of 25m over the last 10 years.
In a survey of 2,000 adults it also found that 6% said they drank six or more cups a day, with the average person consuming around two cups a day.
Of the coffee consumed in the UK, on average 10% was being consumed in coffee shops, bars and restaurants, 65% was consumed at home and 25% was consumed at work or whilst studying.
Millennials (20 to 37 years old) were found to be drinking 0.5 cups of coffee a day but contributed to 50% of all the coffee consumed in coffee shops, bars or restaurants. This was compared to Generation X (38 to 53 years) which drank 2.1 cups of coffee a day and contributed to 25% of coffee drank out of home. Those over the age of 72 only contributed to 12%, despite drinking on average 2.2 cups a day.
Chris Stemman, executive director of the BCA, said: “It’s interesting to see the significant differences in consumption trends amongst the age groups. The research suggests that whilst Millennials are drinking slightly less coffee than the older generations, they are probably drinking more of the speciality coffee found in restaurants, bars and coffee shops, which are often higher value, and are therefore more of a treat.”
And coffee shops and tea rooms opeators are also proving to be the winners in town centres. Research compiled by the Local Data Company for PricewaterhouseCoopers looked at operators with over five outlets across the country in 500 town centres. It found that speciality coffee shops, tea rooms and cafes were bucking the downward retail trend.
In 2017 it found that there was an overall net loss of 1,772 stores disappearing from Great Britain’s town centres in 2017. However, café and tea room net numbers increased by 30 units and coffee shops by 25.
Lisa Hooker, consumer markets leader at PwC, said that coffee shops and cafes were one of the winners in the market as they service the needs of emerging consumer segments. "2017 was tough for the British retail industry, particularly the second half of the year. We saw volatility from month to month and across different sectors as wage growth failed to keep up with inflation, forcing many shoppers to think more carefully about their spending habits.”