With the coffee category now worth over £1.6 billion (Kantar) and more than 24 million households in the UK buying coffee (Kantar), retailers can continue to benefit from the growing opportunities within this category.
Coffee plays an essential role in shoppers’ routines as one of the most difficult beverages to go without.
With consumers increasingly looking for more evolved coffee shop-style drinks that deliver on taste and quality, it remains vital for retailers to offer an exciting and diverse coffee range to maximise the potential of this category.
Edward Watts, UK&I Sales Director, Jacobs Douwe Egberts, comments: “JDE continues to be a household staple, and we are constantly evolving our portfolio to ensure we have a great option for every coffee drinker, giving people the chance to customise their coffee to their preferences. For example, we recently expanded our popular Kenco Millicano range, including three rich and creamy drinks: Creamy Cappuccino, Smooth Latte, and Cadbury Mocha. For those wanting to create more coffee-shop experiences at home, we expanded our range of Tassimo pods with the launch of the Tassimo Costa Skinny Latte and Tassimo Cadbury Caramel Hot Chocolate pods.”
Consumer demand for indulgent, coffee shop-style experiences at home shows no sign of slowing down. Consumers are trading up on their weekly shop with products that allow them to easily recreate their favourite coffee shop experiences.
This trend is evident in the immense growth within the specialities and mixes segment. The in-home frothy coffee category has had another strong year, with sales up 17%, much of which is led by Kenco (Nielsen), which has seen growth of 47% within its specialties range (Nielsen). Moreover, these products are also key to recruiting younger shoppers and expanding the coffee category’s popularity.
Coffee shop-branded products, like JDE’s Tassimo Costa range, continue to be incredibly popular, that’s why the range was expanded earlier this year, with the new Tassimo Costa Skinny Latte pods.
This builds on the success of Tassimo’s number one SKU – the Tassimo Costa Latte. Tapping into the growing trend of health and well-being considerations that impact consumer choices, the Tassimo Costa Skinny Latte contains 46% less sugar and 20% less fat than the standard milk option. With semi-skimmed milk being the number one milk choice in coffee shops annually (57.7%, Allegra), Tassimo now brings this option to consumers at home.
Tapping into the market trend for coffee-shop-worthy beverages, Kenco Cappuccino and Latte sachets allow consumers to recreate that great tasting, frothy coffee without the need for a coffee machine.
“Longing for a latte, craving a cappuccino or in the mood for a mocha? Every coffee drinker has their preference. Coffee used to be regarded largely as a simple morning beverage, but now consumers increasingly see it as a lifestyle product that can be tailored to their preferences and enjoyed in a variety of contexts throughout the day,” adds Watts.
“So, we’ve developed a portfolio that gives people the chance to customise their coffee to meet their needs, including products such as our new Kenco Millicano barista-style coffee tins which we launched in July.” One of JDE’s biggest sellers over the past year is Kenco Iced/Hot, an instant latte that can be served hot or cold. Creating even more consumption occasions and providing a great opportunity for retailers to maximise their rate of sale throughout the entire year – with iced lattes perfect for the summer and hot lattes ideal for the winter.
As well as offering choice in different formats, consumers are also looking for flavoured coffee, which now makes up over 39% of the speciality sector (NIQ). In fact, the top flavours amongst shoppers are caramel and vanilla, which account for over half of the flavoured specialities segment (NIQ). Retailers should consider stocking best-sellers, such as Kenco Iced/Hot in Salted Caramel and Vanilla to meet demand and offer choice for shoppers.
Kenco’s Iced/Hot Lattes Salted Caramel and Vanilla achieved over £6.5m in value sales in the last year (NIQ), showcasing the opportunity for retailers to drive growth with indulgent options.
David Balderstone, Clipper Teas Brand Manager at Ecotone UK, comments: “We’ve launched a new range of organic infusions blends, comprised of naturally bold flavours. All four flavours target key need states, with Turmeric & Orange to put a lively spring in your step, Blackcurrant & Blueberry to lift your mood, and Chamomile & Peach for unwinding. This is part of a wider redesign across our full infusions range where we’ve put a real focus on the flavours harnessed in each blend, coupled with a focus on bright colours and joyful artwork synonymous with the brand.”
Clipper is witnessing a stellar 2024, outperforming the category in Black Tea as the fastest-growing infusions brand, with value growth up 18% over the past year (IRI).
The continued success of Clipper’s infusions and black tea demonstrates that it is making organic tea accessible to increasing numbers of consumers. The brand partly accredits its strong and sustained growth to its successful GOOD Tea 360 campaign that launched at the start of the year, which helped consumers learn about what makes a ‘good’ cuppa underpinned by the strapline, ‘There’s Tea, Then There’s GOOD Tea’.” Twinings has launched its new ready-to-drink range of Twinings Sparkling Tea.
Fortified with multiple vitamins and minerals, including antioxidant Vitamin C to support general wellbeing, Twinings Sparkling Tea responds to an evolving consumer demand for an afternoon treat that also makes you feel good and is good for you.
Developed by Twinings Master Blenders and expert herbalists, Twinings Sparkling Tea infuses tea and botanicals with sparkling water and fruit juice, fortified with essential vitamins and minerals to create the perfect, refreshing pick-me-up to help combat the mid-afternoon slump.
Twinings new Sparkling Tea comes in three fruit flavours, each with unique properties to encourage positive wellbeing.
Defence is a Zesty Orange with Passionfruit and Elderberry infused with Chinese green tea leaves and fortified with Zinc and Vitamins C and D to support your immune system.
Refresh is Juicy Raspberry Lemonade with Hibiscus infused with Chinese white tea leaves and fortified with Magnesium, Niacin and Vitamin C to lift mind and spirit.
Boost is Zingy Lemon with Ginger and Lemon Balm infused with Indian black tea leaves and fortified with Vitamins B6, B12 and C to energise your day.
The Sparkling Teas are rich in antioxidant vitamin C and contain a range of vitamins and minerals, that nourish body and mind. The range is also free of any artificial sweeteners or colours, created with no added sugar and less than 50 calories in each can.
Twinings’ latest innovation responds to consumer demand for a fresh, new way to enjoy tea. Consumer testing of the Sparkling Tea found that 9 out of 10 who sampled it said they would recommend the product to a friend after trying, commenting that it far exceeded their expectations.
Harnessing 300 years of expertise, Sparkling Tea is the latest innovation at Twinings, expanding its range of cold products following the launch of Coolers last month.
Gill Close, Marketing Director for UK & Ireland at Twinings, said: “After years of research and development, we are thrilled to finally be able to share Twinings Sparkling Tea. At Twinings, we are passionate about crafting the highest-quality teas and infusions to create refreshing moments for our consumers – and our new ready-to-drink product means they can enjoy the feel-good taste of Twinings wherever they are.
“Available in three delicious flavours, Twinings Sparkling Tea is the perfect pick-me-up to help combat the mid-afternoon slump; a treat to put a spring in your step while feeling good about yourself. Our ambition is to empower people to get the most from life, enabling them to make small changes by making positive health and wellbeing enjoyable and more accessible.”
Hot chocolate has traditionally been a winter staple, but recent data reveals that it is fast becoming an all year-round favourite.
Over the past four weeks, the food beverage category has shown growth of 13.6% when compared to the same period last year (Kantar).
Sales of the range from Mars Chocolate Drinks and Treats, which includes Galaxy Hot Chocolate, has grown even more significantly, with sales up 62%, when compared to the same period in 2023 (Kantar). Michelle Frost, General Manager at Mars Chocolate Drinks and Treats, states: “We believe that investing in various formats and packaging has broadened the range’s appeal, driving growth during the spring and summer months.
“The Galaxy brand contributes £23.1 million to the category, with our flagship product, Galaxy Instant, remaining a consumer favourite for 25 years.
“The iconic taste of Galaxy continues to be a staple for loyal customers, while different formats like our Galaxy Sticks provide new shoppers with more choice.”
Adam Hacking, Head Of Beverages at Arla, comments: “Chilled coffee remains a comparatively new concept for much of the UK population, however, there is consistent momentum around more people buying into the sub-category, with greater frequency and in greater weight. It has reached a significant scale quickly and as a sub-category, ready to drink (RTD) chilled coffee is now worth £280m (Nielsen), with brands and products on offer that deliver particularly strong cash ROS.”
Consumers like variety when it comes to chilled coffee, so Starbucks® recommends stocking a range of flavours to reach the broadest audience possible.
Starbucks® Protein Drink with Coffee launched on 13th June. This is Starbucks’ debut protein and offers the delicious flavour you’d expect from the UK’s number one RTD chilled coffee brand, with the added benefit of being a convenient, high-protein beverage, the innovation can be enjoyed on-the-go to support active lifestyles.
Crafted from a smooth blend of Starbucks® Arabica Coffee, with 20g protein per bottle (330ml), creamy low-fat milk, and no added sugar (contains naturally occurring sugars), Starbucks® Protein Drink with Coffee is available in three iconic coffee variations: Caffe Latte, Chocolate Mocha flavour, and smooth Caramel Hazelnut flavour. The high-protein range adds strength to the protein category which has seen exponential growth, increasing in value from £46m in 2021 to £147m in 2024 (Nielsen).
Created with an active lifestyle in mind, the Starbucks® Protein Drink with Coffee is designed to be enjoyed, whenever consumers need it. The high protein content supports daily protein intake, without compromising on taste.
Starbucks’ consumers are some of protein’s biggest fans – in fact, they buy it 6.1 times per year more frequently than average protein buyers (Kantar).
Now they can enjoy it with the same great taste as Starbucks’ chilled coffee.
By appealing to existing protein drinkers as a trade-up opportunity and by tapping into the penetration opportunity for new shoppers, Starbucks® Protein Drink with Coffee will continue to drive growth in the milk-based beverage category.
Starbucks® chilled coffee remains the leading player within the Ready to Drink (RTD) category (within the dairy sector), worth £145m within a total category worth £297m (Kantar/Nielsen). The brand has continued to grow with an 18% value and 25% volume increase in the last 12 months (Kantar/Nielsen). Gaining a 3.3% value market share in the past year (Kantar/Nielsen), which is more than any other brand in the category, Starbucks® chilled coffee is larger than the next four brands and own-label combined.
Amy Burgess, Senior Trade Communications Manager at Coca-Cola Europacific Partners (CCEP), comments: “The ready-to-drink (RTD) chilled coffee sector is becoming an increasingly popular choice in people’s morning routines, whether that is at home or on-the-go. In fact, more than a quarter of UK households now purchase RTD coffee, and that’s continuing to grow (Nielsen).”
Costa Coffee’s RTD range is up 24% in value in convenience over the past year (Nielsen). This success can be put down to the widespread popularity of the Costa Coffee brand, the nation’s favourite coffee shop for the last 14 years (Allegra). It is also one of the only full ranges in the segment to be 100% HFSS-compliant.
RTD chilled coffee is incredibly diverse. Featuring Lattes, Flat Whites and Frappés, Costa’s range caters to a broad variety of different tastes and occasions, offering shoppers a choice of low, medium and high intensity caffeine options as well as different coffee flavours and levels of sweetness.
At the beginning of the year, CCEP launched PMP versions of the Costa Coffee Latte and Caramel Latte RTD ranges, offering a unique selling point exclusive to retailers to help enhance their competitive edge when it comes to the RTD chilled coffee segment.
And this summer CCEP launched a new on-pack promotion across the Costa Coffee RTD chilled coffee range, giving consumers the chance to win tickets to some of the UK’s biggest music festivals, including Cornwall’s own surf and music festival, Boardmasters – which Costa Coffee is partnering with for 2024.
In March, Jimmy’s Iced Coffee helped retailers answer consumer demand for on-the-go protein beverages, with the launch of its brand-new collaboration with Myprotein. Available in Original and Caramel flavours, Jimmy’s Myprotein Iced Coffee contains protein enriched milk and boasts 5.6g of protein per 100ml, as well as being HFSS-compliant.
The launch helps retailers tap into the UK protein market, which is estimated to reach over £438m in 2024 (Mordor Intelligence). In fact, the Global Ready-to-Drink (RTD) Protein Beverages market was valued at $1.56 billion in 2023 (Evolve Business Intelligence), meaning there is significant opportunity for retailers to drive footfall in store and maximise sales with a RTD protein drink solution.
Ben Parker, Britvic’s Retail Commercial Director in Great Britain, comments: “We know that shoppers have been on the hunt for on-the-go protein beverages for a while now. So, collaborating with Myprotein to bring together the rising protein trend and the popularity of RTD coffee is set to tick numerous boxes for consumers. The Jimmy’s Myprotein Iced Coffee will appeal to those looking to incorporate more protein into their diet. The collaboration presents a huge opportunity for retailers to expand their RTD iced coffee range, appeal to new shoppers and increase basket spend.”
Available across the Grocery, Convenience and Wholesale channels, the original flavour rolled out in a 4 x 250ml SlimCan multipack suited to drive on-to-go consumption. A 380ml BottleCan and the Caramel variant also rolled out in April. The launch will be supported by fitness and sport brand giveaways, influencer activity and product sampling to drive awareness.
Stuart Wilson, Founder of speciality coffee brand, Lost Sheep Coffee, comments: “With Gen Z consumers more likely to drink RTD coffee than hot coffee (Mintel), this is an exciting space to be in right now. Fuelled by 24/7 lifestyles, shoppers are looking for new ways to drink great coffee on the go, and the category is buzzing.
“However, it’s not just Gen Z’s fuelling the growth; Millennials and Gen X’s are also drinking RTD coffee for a natural energy boost at any time of the day. Its brilliance is its convenience, you can just pop it into your bag and drink it when you need it.
“Having made over 1 million cups of speciality coffee to date, we know what people want and how to craft a true speciality barista drink. Our point of difference focuses on the absolute quality of our product and the utilising of our industry leading speciality coffee expertise!”
The new iced coffee range is brewed exclusively using award-winning speciality coffee ‘Get To The Hopper’ blend, which is expertly hand roasted by Lost Sheep Coffee at a dedicated roastery in Kent. Because Lost Sheep Coffee roasts the coffee that is used in every one of its RTD cans, it can trace the coffee used in each can from the coffee farm to the can on the shelf.
This level of traceability and expertise is unique in the UK RTD coffee market, the vast majority of RTD coffee cans currently consumed in the UK market are made using instant coffee, which results in a below average taste experience at a high price point. This positions the brand perfectly to make positive change to the UK RTD market with fully traceable, hand roasted, speciality grade iced coffee cans that are completely new, whilst being cost competitive on the shelf.
For retailers looking to tap into the 74% of coffee drinkers who currently don’t buy RTD coffee because the options available don’t replicate coffee shop coffee (YouGov), this offers a considerable profit opportunity.
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