Sales of quality coffee defy the recession in the UK

By Guy Montague-Jones

- Last updated on GMT

Related tags: Coffee

British consumers are starting to wake up to the smell of good coffee as sales of more expensive varieties continue to grow in the recession, according to Mintel.

Between 2005 and 2009, Mintel said the UK market for in-home coffee grew 17 per cent in value terms to £782m. Looking ahead, the research firm expects even more impressive growth of as much as 25 per cent by 2014.

Driving the development of the coffee market is the move towards premium, as Brits lose interest in basic instant coffee. Between 2004 and 2009, sales of regular granules fell 36 per cent to £140m and were overtaken by roast or ground coffee sales, which grew 49 per cent over the same five year period.

While roast or ground coffee has gained significant ground, instant coffee still dominates the British coffee break.

Instant growth

Accounting for 80 per cent of value coffee sales in 2009, sales of instant products grew 12 per cent between 2005 and 2009. Within this market it is the higher quality varieties that are booming. Valued at £201 million in 2009, sales of premium (freeze dried) coffee rose 44 per cent between 2005 and 2009.

The recession has done little to depress the coffee market or dissuade consumers from buying more expensive products. Indeed, Mintel suggests that the current economic situation has benefited the in-home coffee market in the UK.

Ben Perkins, head of food and drink research at Mintel said: “Economic turbulence in the UK has contributed to a shift in the way that consumers drink their coffee, which has largely been to the benefit of the in-home coffee market.

“As coffee shops have felt the effects of consumer belt tightening, the in-home market has witnessed a good deal of trading up, as consumers endeavour to replicate the coffee shop experience at an in-home price.”

Next generation?

Although the coffee market in the UK is in good shape, Mintel said there is some concern that younger consumers are not big coffee drinkers. Its research indicates that a total 33 per cent of those aged 16 to 24 and 57 per cent of those aged 25 to 34 drink coffee at home, compared to three quarters of those aged 35 to 44 years old.

Perkins said: “The issue with the younger end of the market is that these consumers don’t drink instant coffee, which is the largest part of the market, so the big brands need to tap into this age group. Indeed, long term growth in the market will very much depend upon how coffee brands can make coffee drinking appealing to a younger audience.”

Related topics: Tea and Coffee, Markets

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