Sat 16th Apr 2016 - Mintel – sales in UK coffee shops set to top £3bn in 2016 Mintel – sales in UK coffee shops set to top £3bn in 2016: Sales in UK coffee shops are set to reach a record high as the market tops £3bn in 2016, new research has revealed. The findings by consumer research group Mintel said sales are expected to reach £3.1bn with the market forecast to increase a further 26% between 2015 and 2020 to reach £3.7bn. The market enjoyed an estimated growth of 6% in 2015. Over the past five years, the market has shot up 28% from £2.3bn in 2010 to £2.7bn in 2015. The research found as many as three quarters of Brits (74%) buy hot drinks out-of-home with just over a quarter (27%) using independent coffee shops, cafes, or fast food chains and 14% from restaurants, pubs and hotels. The purchases peak among millennials before declining with age. Those aged 16 to 34 are more likely than most to buy any hot drink out-of-home with 81% doing so, compared with 67% of those aged over 65. Of those aged 45 to 64 who buy hot drinks out of the home, three in five (60%) said high quality coffee was an important influence when choosing where to buy their beverages, compared with just 50% of those aged 16 to 34. Coffee is the most widely bought hot drink at specialist coffee shops (71%) ahead of hot chocolate (27%) and tea (26%). Meanwhile, one in five (20%) Brits said 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. Away from traditional offerings, interest in craft beer at coffee shops stands at 12% on average and rises to 19% among men, whilst 10% are interested in seeing cocktails on coffee shop menus, rising to 19% among those aged 18 to 24. Interest in wine at coffee shops stands at 13% on average. Mintel global drinks analyst Jonny Forsyth said: “The nation’s appetite for coffee shops shows no signs of abating. The coffee shop boom has been remarkably recession-resistant in the past decade, which illustrates just how important a part of UK culture the fresh, specialty coffee habit has become. However, 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. 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. They also face increased competition from smaller specialists, often at the forefront of innovation, which are attracting funding for expansion. Representing considerable competition to specialist coffee shop brands, independent stores are likely to grow significantly as coffee drinkers seek a more unique, artisanal, high quality and ‘third wave’ coffee experience. In reaction to this increasing threat, larger specialists are exploring new revenue streams, for example, by trialling alcohol, evening hot food and by teaming up with third party fresh food brands. The low level of interest in cold brew may be because of lack of education as to what cold brew coffee actually is or what it tastes like and consumers failing to understand how it is different from iced coffee or coffee that has gone cold. That draught coffee is typically made from cold brew coffee suggests that offering draught coffee could be an effective way to encourage the trial of cold brew coffee. Explaining what cold brew is and its benefits above standard coffee served hot will be key.”