866-997-4948(US-Canada Toll Free)

Coffee - UK - August 2014

Published By :

Mintel

Published Date : Sep 2014

Category :

Beverages

No. of Pages : 195 Pages

While tea has long been regarded as the nation’s favourite hot drink, the UK is equally a nation of coffee drinkers. While usage remains biased towards standard instant, a greater focus on the convenience and quality of micro-ground can support trading up.
Table of Content

Introduction

Definition
Excluded
Abbreviations

Executive Summary

The market
Figure 1: UK retail sales and forecast of coffee, by value, 2009-19
Figure 2: UK retail sales of coffee, by coffee type, 2011-13
An ageing population brings opportunities and challenges
Companies, brands and innovation
Nestlé’s longstanding brands are struggling
Figure 3: Leading brands’ sales and shares in the UK retail coffee market, by value, 2013/14*
Coffee is second only to CSDs in terms of adspend among non-alcoholic drinks
Private label and pods fuel coffee NPD
The consumer
There are now as many people drinking coffee in the UK as tea
Figure 4: Frequency of drinking coffee at home, by type, April 2014
Micro-ground instant is successfully carving out an image of indulgence and quality
Dessert-flavoured coffee offers real potential
Figure 5: Selected attitudes towards coffee, April 2014
Pod machines continue to find their way into UK homes
Figure 6: Ownership of coffee pod machines, April 2014
For those who don’t want to buy a machine, hassle and space constraints are key reasons
Figure 7: Reasons for not purchasing a coffee pod machine, April 2014
What we think

Issues and Insights

The UK is a nation of coffee drinkers – The challenge is getting them to trade up
The facts
The implications
Falling prices should fuel growth in the coffee pod market
The facts
The implications
Coffee can borrow from bakery and other indulgent categories
The facts
The implications

Trend Application

Fauxthenticity
Life Hacking
Generation Next

Market Drivers

Key points
The market will benefit from an ageing population, but certain formats face challenges
Figure 8: Trends in the age structure of the UK population, 2009-14 and 2014-19
Drought in Brazil drives wholesale price of beans up
Figure 9: Monthly average cost of coffee beans in Europe, by bean type, January 2012-May 2014
Figure 10: UK retail price index for tea, coffee & other hot drinks, and soft drinks, January 2009-April 2014
Rising consumer confidence brings opportunities and challenges for coffee
Figure 11: Financial health index, January 2009-June 2014

Strengths and Weaknesses

Strengths
Weaknesses

Who’s Innovating?

Key points
New entrants set to weaken Nespresso’s grip on pods
Figure 12: New product launches in the UK coffee market, by format, 2011-13
Ground coffee launches have been driven by private label
Figure 13: New product launches in the UK ground coffee market, by private label v branded, 2009-13
Micro-ground offers scope to halt the decline of instant coffee
The UK coffee market lacks flavour innovation
Innovation themes from around the world
European retailers introduce Nespresso-compatible own-brand capsules
Innovative approaches to convenience in ground coffee
Functional coffee is niche, but it may have a role to play

Market Size and Forecast

Key points
Coffee market value growth is expected to slow
Figure 14: UK retail sales of coffee, by value and volume 2009-19
Volume sales set for more moderate growth than over 2009-14
Figure 15: UK retail sales of coffee, by value, 2009-19
Figure 16: UK retail sales of coffee, by volume, 2009-19
Forecast methodology

Segment Performance

Key points
Weak performance of instant and ground segments slows overall coffee market growth in 2013
Figure 17: UK retail sales of coffee, by coffee type, 2011-13
Pods continue to shine, but still account for less than 10% of value sales
Premium proves successful

Market Share

Key points
Nestlé’s core brands struggle while its other brands perform well
Figure 18: Leading manufacturers’ sales and shares in the UK retail coffee market, by value and volume, 2012/13 and 2013/14
Figure 19: Leading brands’ sales and shares in the UK retail coffee market, by value and volume, 2012/13 and 2013/14
Carte Noire helps Mondelēz avoid losing further market share
Own-label is the biggest loser
DE Master Blender and MondelÄ“z merger set to pose a serious threat to Nestlé, EU approval permitting

Companies and Products

Mondelēz
Background
Recent activity
Product range and innovation
Marketing and promotion
Nestlé
Background
Recent activity
Product range and innovation
Marketing and promotion
Lavazza
Background
Recent activity
Product range and innovation
Marketing and promotion
Douwe Egberts (DE Master Blenders)
Background
Product range and innovation
Marketing and promotion
Taylors of Harrogate
Background
Product range and innovation
Marketing and promotion

Brand Advertising, Perceptions and Social Media

Key points
Coffee adspend bucks the trend in the wider non-alcoholic drinks market
Campaigns from Douwe Egberts and Taylors of Harrogate in 2014 are reducing market’s reliance on Nestlé and MondelÄ“z
Figure 20: Above-the-line advertising spend on coffee, by advertiser, 2011-14
Nestlé and MondelÄ“z continued their head to head in micro-ground instant
Figure 21: Above-the-line advertising spend on coffee, by brand, 2011-14
Brand perceptions
Key brand metrics
Figure 22: Key brand metrics, May 2014
Brand map
Figure 23: Attitudes towards and usage of brands in the coffee sector, May 2014
Correspondence analysis
Brand attitudes
Figure 24: Attitudes, by coffee brand, May 2014
Brand personality
Figure 25: Coffee brand personality – Macro image, May 2014
Figure 26: Coffee brand personality – Micro image, May 2014
Brand usage
Figure 27: Coffee brand usage, May 2014
Brand experience
Figure 28: Coffee brand experience, May 2014
Social media and online buzz
Social media metrics
Figure 29: Social media metrics of selected coffee brands, July 2014
Coffee brand mentions are low
General coffee discussion is significantly higher
Online giveaways are important
Online mentions
Figure 30: Share of conversation of selected coffee brands, by week, 30 June 2013-28 June 2014
Online giveaways make impact
Nescafé’s wider usage inspires greater natural conversation
Topics of discussion
Figure 31: Topics of discussion around coffee, 30 June 2013-28 June 2014
Different topics spoken about in different places
Type of coffee is most spoken about topic
Figure 32: Share of conversation, by type of coffee, 30 June 2013-28 June 2014
Brazil is most spoken about country of origin
Figure 33: Top five countries spoken about in reference to coffee origin, 30 June 2013-28 June 2014
Conversation proportion remains static
Figure 34: Percentage of coffee conversation around selected topics, by week, 30 June 2013-28 June 2014
Where people talk about coffee
Figure 35: Where generic coffee conversation happens, by type of website, 30 June 2013-28 June 2014
Figure 36: Percentage of brand conversation on different categories of internet site, 30 June 2013-28 June 2014
Analysis by brand
Carte Noire
Figure 37: Topic cloud around mentions of Carte Noire, 30 June 2013-28 June 2014
Nescafé
Figure 38: Topic cloud around mentions of Nescafé, 30 June 2013-28 June 2014
Figure 39: Online mentions, discounting competitions and giveaways, 30 June 2013-28 June 2014
Kenco
Figure 40: Topic cloud around mentions of Kenco, 30 June 2013-28 June 2014
Douwe Egberts
Figure 41: Topic cloud around mentions of Douwe Egberts, 30 June 2013-28 June 2014
Nescafé Azera

The Consumer – Usage of Coffee

Key points
Coffee becomes the UK’s hot drink of choice
Figure 42: Frequency of drinking coffee at home, by type, April 2014
Micro-ground is appealing to both standard instant drinkers and those drinking more expensive coffee types
While usage of coffee pods is increasing, they remain far from an everyday choice

The Consumer – Perceptions of Different Types of Coffee

Key points
Quality and indulgence are key attributes seen to differentiate micro-ground from standard instant
Figure 43: Qualities associated with different types of coffee, April 2014
Perceived lack of convenience may be hampering micro-ground and pods
Coffee beans/ground coffee has succeeded in becoming the ‘aspirational’ format

The Consumer – Attitudes Towards Coffee

Key points
The ‘Waffogato’ may be a novelty, but dessert-inspired coffee sparks real interest
Figure 44: Attitudes towards coffee, April 2014
The UK may be a nation of coffee drinkers, but few come across as connoisseurs
The coffee shop experience built the Starbucks and Costa brands, but that doesn’t automatically translate to packaged coffee

The Consumer – Ownership of Coffee Pod Machines

Key points
Almost half of coffee drinkers have or are interested in a coffee pod machine
Figure 45: Ownership of coffee pod machines, April 2014
Cost of pods is a barrier at all income levels, but cost of machines matters less for high earners
Figure 46: Reasons for not purchasing a coffee pod machine, April 2014
Perceived lack of convenience is a key barrier for marketers to address
Figure 47: Reasons for lack of interest in coffee pod machines, April 2014

Appendix – Market Size and Forecast

Figure 48: Best- and worst-case forecasts for retail sales of coffee, by value, 2014-19
Figure 49: Best- and worst-case forecasts for retail sales of coffee, by volume, 2014-19

Appendix – Brand Advertising, Perceptions and Social Media

Figure 50: Brand usage, May 2014
Figure 51: Brand commitment, May 2014
Figure 52: Brand diversity, May 2014
Figure 53: Brand satisfaction, May 2014
Figure 54: Brand recommendation, May 2014
Figure 55: Brand attitude, May 2014
Figure 56: Brand image – Macro image, May 2014
Figure 57: Brand image – Micro image, May 2014
Figure 58: Share of conversation of selected coffee brands, by week, 30 June 2013-28 June 2014
Figure 59: Topics of discussion around generic coffee, 30 June 2013-28 June 2014

Appendix – The Consumer – Usage of Coffee

Figure 60: Type of coffee drunk at home, by frequency, April 2014
Figure 61: Frequency of drinking standard instant coffee at home, by demographics, April 2014
Figure 62: Frequency of drinking ground coffee at home, by demographics, April 2014
Figure 63: Frequency of drinking coffee made using whole beans that I grind at home, by demographics, April 2014
Figure 64: Frequency of drinking coffee made with coffee pods at home, by demographics, April 2014
Figure 65: Frequency of drinking chilled ready-to-drink coffee at home, by demographics, April 2014
Figure 66: Frequency of drinking decaffeinated coffee at home, by demographics, April 2014
Figure 67: Frequency of drinking instant cappuccinos/latte/mocha coffee at home, by demographics, April 2014
Figure 68: Frequency of drinking micro-ground instant coffee at home, by demographics, April 2014
Figure 69: Frequency of drinking other coffee types at home, by demographics, April 2014

Appendix – The Consumer – Attributes Associated with Different Types of Coffee

Figure 70: Attributes associated with different types of coffee, April 2014
Figure 71: Most popular attributes associated with standard instant coffee, by demographics, April 2014
Figure 72: Next most popular attributes associated with standard instant coffee, by demographics, April 2014
Figure 73: Other attributes associated with standard instant coffee, by demographics, April 2014
Figure 74: Most popular attributes associated with micro-ground instant coffee, by demographics, April 2014
Figure 75: Next most popular attributes associated with micro-ground instant coffee, by demographics, April 2014
Figure 76: Other attributes associated with micro-ground instant coffee, by demographics, April 2014
Figure 77: Most popular attributes associated with coffee beans/ground coffee, by demographics, April 2014
Figure 78: Next most popular attributes associated with coffee beans/ground coffee, by demographics, April 2014
Figure 79: Other attributes associated with coffee beans/ground coffee, by demographics, April 2014
Figure 80: Most popular attributes associated with coffee pods for machines, by demographics, April 2014
Figure 81: Next most popular attributes associated with coffee pods for machines, by demographics, April 2014
Figure 82: Other attributes associated with coffee pods for machines, by demographics, April 2014
Figure 83: Most popular attributes associated with ready-to-drink coffee, by demographics, April 2014
Figure 84: Next most popular attributes associated with ready-to-drink coffee, by demographics, April 2014
Figure 85: Other attributes associated with ready-to-drink coffee, by demographics, April 2014
Figure 86: Attributes associated with different types of coffee, by type of coffee drunk at home – Any coffee usage, April 2014
Figure 87: Attributes associated with different types of coffee, by type of coffee drunk at home – Standard instant coffee, April 2014
Figure 88: Attributes associated with different types of coffee, by type of coffee drunk at home – Ground coffee, April 2014
Figure 89: Attributes associated with different types of coffee, by type of coffee drunk at home – Coffee made using whole beans that I grind at home, April 2014
Figure 90: Attributes associated with different types of coffee, by type of coffee drunk at home – Coffee pods, April 2014
Figure 91: Attributes associated with different types of coffee, by type of coffee drunk at home – Chilled ready-to-drink coffee, April 2014
Figure 92: Attributes associated with different types of coffee, by type of coffee drunk at home – Decaffeinated coffee, April 2014
Figure 93: Attributes associated with different types of coffee, by type of coffee drunk at home – Instant cappuccinos/latte/mocha coffee, April 2014
Figure 94: Attributes associated with different types of coffee, by type of coffee drunk at home – Micro-ground instant coffee, April 2014
Figure 95: Attributes associated with different types of coffee, by type of coffee drunk at home – Other coffee types, April 2014

Appendix – The Consumer – Attitudes Towards Coffee

Figure 96: Consumer attitudes towards coffee, April 2014
Figure 97: Most popular consumer attitudes towards coffee, by demographics, April 2014
Figure 98: Next most popular consumer attitudes towards coffee, by demographics, April 2014
Figure 99: Other consumer attitudes towards coffee, by demographics, April 2014

Appendix – The Consumer – Ownership of Coffee Pod Machines

Figure 100: Ownership of coffee pod machines, April 2014
Figure 101: Ownership of coffee pod machines, by demographics, April 2014
Figure 102: Reasons for lack of interest in coffee pod machines, April 2014
Figure 103: Most popular reasons for lack of interest in coffee pod machines, by demographics, April 2014
Figure 104: Next most popular reasons for lack of interest in coffee pod machines, by demographics, April 2014
Figure 105: Other reasons for lack of interest in coffee pod machines, by demographics, April 2014
Figure 106: Reasons for not purchasing a coffee pod machine, April 2014
Figure 107: Most popular reasons for not purchasing a coffee pod machine, by demographics, April 2014
Figure 108: Next most popular reasons for not purchasing a coffee pod machine, by demographics, April 2014

Make an enquiry before buying this Report

Please fill the enquiry form below.

  • Full Name *
  • Your Email *
  • Job Title
  • Company *
  • Phone No. * (Pls. Affix Country Code)
  • Message
  • Security Code *

Upcoming Reports

  • Sugar and Gum Confectionery - UK - January 2015

    Rising dental health concerns can create an opportunity for chewing gum brands. Currently much of the marketing for sugar-free gums centres around fresh breath, however, the dental health benefits, particularly for children, could warrant more focus. Though explored internationally, tooth-friendly gums tailored for children remain rare in the UK market....