Coffee shop sales to top £3 billion in 2016

SAN FRANCISCO, CA - AUGUST 26:  A barista at Sightglass Coffee makes a coffee drink on August 26, 2011 in San Francisco, California. Coffee shops across the country are being faced with the decision to raise retail coffee prices as wholesale coffee bean prices are surging. According to the International Coffee Organization, the daily average composite price of coffee beans has gone up nearly every day over the last 12 days.  (Photo by Justin Sullivan/Getty Images)

New research from Mintel predicts that coffee shop sales are set to reach a record new high of £3 billion this year.

Last year the UK coffee shop market enjoyed an estimated growth of 6%, while over the past five years it has shot up an impressive 28% from £2.3 billion to £2.9 billion.

This year coffee shop sales are expected to reach £3.1 billion with the market forecast to increase a further 26% between 2015 and 2020 to reach £3.7 billion.

Jonny Forsyth, global drinks analyst at Mintel, says the coffee shop boom has been remarkably recession-resistant in the past decade, illustrating just how important a part of UK culture the fresh, specialty coffee habit has become.

“In 2015, the UK market was also helped by the increase in real incomes and consumer confidence seen during the year, which has led to more spend per visit. Large coffee shop chains continue to expand aggressively which is helping to boost the market,” he said.

Today, as many as three quarters of Brits (74%) buy hot drinks out-of-home, with just over one quarter (27%) using independent coffee shops or cafes, 27% using fast food chains and a significant minority (14%) of consumers buying hot drinks from restaurants, pubs and hotels.

Purchase of hot drinks out of the home peaks among Millennials before declining with age. Those aged 16-34 are more likely than most to buy any hot drink out-of-home with 81% doing so, compared to 67% of those aged over 65.

However, it seems that it is the older consumers who are most likely to be coffee connoisseurs with respect to quality.

Of those aged 45-64 who buy hot drinks out of the home, three in five (60%) say that high quality coffee was an important influence when choosing where to buy their beverages, compared to just 50% of those aged 16-34.

“The large specialist coffee chains face increasing competition from non-specialists such as pubs and fast food restaurants, which continue to improve and upgrade their hot drinks offers,” observed Forsyth. “They also face increased competition from smaller specialists, often at the forefront of innovation, which are attracting funding for expansion.”

In terms of fresh coffee shop product concepts, one in five (20%) Brits say they would be interested in coffee made using non-dairy milk for example almond or coconut, while the same number (20%) are interested in draught or “nitro” coffee, a brew method that is slowly creeping into UK coffee shops and infuses small nitrogen bubbles into cold brew coffee to create a creamier and smoother taste.

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