Brits to spend £4 billion at coffee shops in 2020: study
Coffee shop sales increased by 27% between 2015 and 2019.
Brits are more than keen on having their daily dose of caffeine with spending at coffee shops set to top £4 billion this year, according to new research from Mintel.
Whilst coffee shop sales thrive, the insights company noted that annual growth has slowed from 9% in 2015 - when the market was worth £3 billion - to 3% in 2019 when it was valued at £3.9 billion.
Mintel said a quarter (26%) of Brits buy hot drinks from fast food chains such as McDonald’s, whilst one in five (22%) buy from a supermarket/store cafe such as Tesco or Ikea. One in six (16%) buy their hot drinks from traditional coffee shops.
Overall, 19% of Brits have not bought a hot drink outside of the home in the last three months to August 2019.
“Coffee shops have enjoyed robust growth in the past five years, benefitting from brands’ ability to meet consumer demand for the convenience of takeaway coffee and emergence of specialty coffee. Continued growth is being boosted by more high street coffee shop brands expanding in the retail, travel, and leisure sectors,” Mintel senior foodservice analyst Trish Caddy said.
“However, the market continues to face tough competition from non-specialists such as fast food outlets and supermarkets; a situation which is not likely to ease as non-specialists continue focusing on price and convenience. With more food outlets selling low-cost coffee, coffee shops without strong food offerings will fall behind.”
Charging for disposable coffee cups
Brits are also warming to the idea of charging for disposable coffee cups, with more than half (57%) of consumers agree that more coffee shops should charge a fee for using those types of cups.
Meanwhile, 82% of customers agree that more people should use reusable coffee cups and 67% of consumers agree that it is worth paying more for coffee from coffee shops that pay fair wages to coffee farmers.
Resurgence of out-of-home tea drinking
Whilst coffee is the most popular hot drink purchased out-of-home, Mintel suggested that tea was seeing a resurgence, with 43% of consumers who out of home drink tea compared to 39% a year ago.
By age group, some 50% of Millennials (aged 20-39) drink tea out of home, compared to 40% of Baby Boomers (aged 55-73).
“The popularity of tea (in general) amongst Millennials is likely a reflection of the growing popularity of alternatives to the traditional cuppa. Speciality black, green and fruit/herbal/spice teas are particularly popular among 16-34-year-olds. Many of the latest ingredient-focused tea-based drinks, such as matcha green tea and herbal teas that give added focus to flavour and a sense of occasion, suit young consumers. That’s not to say they’ve abandoned the classic cup of ‘builder’s tea’ as some 77% of Millennials drink standard black tea,” Caddy explained.
