Abstract
About this report
With rising prices and economic downturn at play between 2008 and 2009, the
coffee market has managed to weather the storm well. Between 2005 and 2009 the
UK market for in-home coffee achieved 17% growth in value, and although some
of this is attributed to the hike in raw coffee and production costs, trading
up has still been a key feature of this market.
- In 2007 and 2008, the rising price of coffee beans helped drive sales
growth. With prices forecast to fall this year, coffee and coffee shop brands
will need to cut prices or find new ways to justify higher prices.
- Instant coffee continues to dominate the market with 90% of 27m
coffee-drinking consumers having drunk some kind of instant coffee in the last
year.
- The 16-34 year old age group is almost twice as likely to make coffee at
home using coffee beans as the average, highlighting both the lack of
penetration among affluent older consumers and the impact that coffee bars
have had in terms of promoting better quality coffee among younger drinkers.
- Even though coffee pods account for a fifth of spend in the roast and
round category, consumer data show that they are only used by 14% of
consumers, reflecting the high-spending nature of the coffee pod customer.
- Some 85% of people who drink ground coffee, beans or pods will also drink
instant coffee whereas only 61% of instant coffee drinkers will drink from the
ground category. Sizeable opportunities exist for suppliers who can persuade
instant coffee drinkers to trade up to ground, beans or pods.
- As Fairtrade becomes more commonplace coffee brands need to find new ways
to attract ethical/green consumers. One innovative new product in this sector
of the market is Nescafe Green which highlights the health and functional
benefits of coffee/coffee drinking.
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