Cold Brew – The Saviour of the Coffee Market
The essence of coffee can be traced back to the mid 1600s, in the UK, and it is said that by 1675 there were more than 3,000 coffee houses throughout England. Today, according to the 2017 Allegra World Coffee Portal, there are an estimated 24,061 outlets, generating over £9.6 billion pounds of turnover each year. So, why is the coffee market concerned?
Current Coffee Climate
Despite the coffee market growing by 5.3% last year (2017), making it 19 years of consecutive growth and emerging as one of the most successful markets in the UK economy, coffee connoisseurs are concerned. These concerns are not born out of fear for the coffee industry collapsing but the direction in which is heading.
Branded coffee shops such as Costa Coffee (2,326 outlets), Starbucks (956) and Caffè
Nero (675) remain the UK’s favourite coffee brands and have cornered 52.9% of the branded chain market. The branded coffee shop chain segment now totals 7,476 outlets, with annual growth of 7.7%. Which, on the whole, reveals lots of positives.
What’s more is that medium-sized artisan chains like Coffee#1 and Joe & the Juice , along with smaller chains in the name of Grind & Co are gaining momentum and driving comparable sales growth across the sector. Again, highlighting the increased structure and growth of the industry. So where are the concerns coming from?
Keeping up with consumers and their ever-changing habits are what are causing the most headaches within the coffee industry. Today, consumers are more discerning and empowered with choice. When it comes to coffee consumption, an expectation of quality is now embedded, thanks to the industries elite performance over the last few decades.
The issue operators are now facing is how to distinguish or differentiate themselves from the competition. They now have to consider a wider range of factors than ever before. For instance, busier, and more mobile, lifestyles demand a different type of coffee. Add to that the speed that technology is increasing and influencing product, alongside the even more knowledgeable coffee connoisseur, demanding specialist or healthier coffee, and you’re all of a sudden competing in a completely different market space.
There are, of course, other aspects which can impact upon any business, at any time. Brexit, for example, has impacted upon the British economy in an unprecedented way, and the outcomes remain unforeseen.
Although there is uncertainty, operators are mixed in their assessment of impact of Brexit. Allegra recorded industry insights from 2013-2017 which reveal how, in the short-term, trading expectations will continue to be impacted. In spite of this, Allegra predicts the total UK coffee shop market will exceed 31,400 outlets and £13 billion turnover by 2022, driven by outlet expansion by branded coffee chains and non-specialist operators.
However, are these predictions taking into consideration the fragile UK economy and the impact of consumer spending habits? With less disposable income through increased taxes and living costs, people are said to be taking advantage of the ‘coffee at home’ experience.
Coffee at Home
Premiumisation of the at-home segment continues and, ironically, it is increasingly influenced by consumer tastes developed via coffee shop visits. An estimated 12.6 million UK households now own a pod machine, with 38% using pod equipment at least once a week. Even though this statistic directly benefits the coffee industry, it weakens the rise of the coffee shops.
This is where the market concerns are evolving from. Altering consumer patterns are forcing the hand of the industry experts who strive to find solutions to keep coffee lovers engaged and in attendance of their coffee shops.
Be it brewing methods, blends, environmentally friendly factors or ‘coffee art’, the coffee shops are adapting to keep their customers coming. The latest attraction, especially in the U.S, is that of cold coffee, otherwise known as ‘cold brew’ coffee.
Cold Brew Coffee
The anticipation is that the future of the coffee shop market place will be shaped by increased consumer participation and the desire for premium quality coffee, anywhere at any time. Hence the reason why cold brew coffee has come to the fore.
It’s predicted that cold brew coffee will be a major force for the global coffee market over the next decade. It’s adaptability and scalability are why it’s been adopted by so many coffee shops, bars, restaurants and hotels already.
A key avenue for cold brew coffee is the cocktail and ‘mocktail’ sector. Establishments are learning from one another, as the coffee and cocktail cultures merge. The evening day-part is somewhat underdeveloped, and with a third of consumers aged 22-34 declaring that they want more coffee houses to serve alcohol.
It’s expected that coffee shops will emerge as social hubs, welcoming anyone, at any time, supplying all kinds of speciality coffee concoctions throughout the day and into the evening, to appease the demand for something new.
New Age Coffee
As we’ve discovered, coffee has been a staple part of UK culture for many centuries, and it doesn’t seem to be slowing down any time soon.
Cold brew coffee offers a whole new experience for coffee lovers far and wide. Creative blends, alternative brewing and roasting processes, alongside nitrogen infused pouring methods, have seen cold brew coffee offer up some extraordinary new textures and flavours.
Such processes demonstrate a hyper-professionalism and premium design, heightening the business opportunities for the entire coffee industry. This should benefit the likes of the Queen’s Lane Coffee House, (established in 1654), whom can now demonstrate both heritage and newage in their offerings, in a bid to attract consumers back to the coffee shops.