Coffee Nation

Out-of-home coffee consumption is big in the United Kingdom.

August 01, 2016

Each month in NACS Magazine, “Global Trends” brings readers retail trends, innovations and case studies in overseas markets. The July 2016 issue shared how U.K. coffee consumption is rocketing, and how retailers are responding with new and improved offers.

The U.K. is fast becoming a powerhouse for coffee consumption in Europe, according to The NPD Group. While the country currently ranks third among the big five European markets, behind Italy (with a coffee consumption of 4.78 billion cups) and France (2.27 billion cups)—but ahead of Germany (1.93 billion cups) and Spain (1.77 billion)—it is the only market where coffee consumption away from home has grown in the five years since year-end 2011.

High Street bakery chain Greggs has been investing in its coffee range since February 2014, when it launched an improved coffee blend. In nationwide blind testing, four out of five customers judged it as good as or better than their favorite coffee brand.

In 2015, the company introduced more coffee machines to meet rising demand. This year it followed up with an extended coffee menu launched in March, featuring espresso, Americanos, lattes, cappuccinos and an improved mocha, plus the on-trend flat white. “The introduction of our flat white coffee in 2016 is helping to continue our delivery of double-digit growth in sales of hot drinks,” reports a spokesperson for Greggs.

At Pret a Manger, which sells 1.5 million cups of coffee a week globally, flat whites are the driving force in coffee—growing faster than the category as a whole. Customers are reported to be moving toward smaller coffees too; while sales of Americano and espresso are also growing for the company. “Strong and natural” are considered a big focus for consumers in the future according to Pret’s coffee team.

Costa Coffee is backing the trend for smaller caffeine shots with the launch of its cortardo—a short rich extraction of “Mocha Italia” coffee served with a little smooth, textured milk. Costa claims to be the fastest growing coffee shop business in the U.K., with more than 2,000 coffee shops and more than 1,240 additional locations in 31 overseas markets. The company also operates the Costa Express format, offering touchscreen machines for a quick and easy way to grab a Costa coffee on-the-go. There are 3,400 Costa Express self-serve coffee bars located across the U.K., including forecourts—a growing market for coffee consumption, according to NPD. The information company’s research shows Britons managed to down nearly 17 million cups of coffee at gas stations in 2015, up by 5 million since 2012.

Euro Garages, which partners with Starbucks at its forecourt locations in the U.K. and has plans to open 150 roadside coffee shops by 2020 across the United Kingdom, is enjoying the sales uplift. Since July 2014, Euro Garages recorded double-digit growth at Starbucks. Increasingly, customers choose the Starbucks drive-thru locations to hold business and other meetings, reports Ilyas Munshi, commercial director at Euro Garages, who likens coffee shops to “New Age pubs,” highlighting their growing and universal customer appeal.

At Applegreen’s new M1 Lisburn site in Northern Ireland, the retailer has teamed up with Lavazza to create a coffee bar with plush soft furnishings, soft lighting and intimate seating areas. The product offer is said to be in keeping with the premium brand and nods toward the indulgent.

Maxol has partnered with the Insomnia Café at its new Mulhuddart service station northwest of Dublin to offer a more expansive coffee shop range, while Topaz has developed a full barista bean-to-cup coffee offer at its new Re.Store format.

Once a nation of tea drinkers, U.K. consumers have a firm grip on their coffee cup right now. But as the trend for flat whites and smaller cup sizes demonstrates, tastes evolve rapidly, so don’t discount tea—just yet.

Fiona Briggs is a retail business journalist. She can be reached at fionalbriggs@gmail.com.

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