Coffee in the United Kingdom

PROSPECTS

Slowdown for fresh ground coffee pods

Although fresh ground coffee pods has witnessed continuous double-digit growth over the review period, retail volume sales slowed down in 2019. This is the first time in years that fresh ground coffee pods experienced such decelerated growth, as the subcategory was traditionally supported by heavy marketing investments from key coffee producers and broader range extensions in recent years.

Instant coffee still impacted by premiumisation trend

In 2019, instant coffee continues to decline in retail volume terms as shoppers trade up for a higher quality coffee. The premiumisation of coffee continues to impact volume sales of instant, as there is today a growing number of higher quality formats of coffee available to consumers.

Innovations blossom across the coffee landscape

Despite coffee volume sales slowdown in 2019, innovations continue to arise in the coffee landscape, with consumers having a greater choice of coffee formats at their disposal. Feel Good Coffee launched its green coffee, a new type of coffee that aims to retain healthy antioxidants.

COMPETITIVE LANDSCAPE

Costa jumps on the at-home occasion

In 2019, Costa Coffee continued to expand its offering with its new At Home range launching via Tesco stores, following successful availability in Asda and Iceland stores across the nation and online retailer Ocado. The coffee pods are compatible with both Dolce Gusto and Nespresso coffee machines.

Nestlé continues its penetration strategy and highlights sustainability focus

After the announcement of a partnership between Nestlé and Starbucks in 2018 to sell Starbucks-branded coffee across retail channels, Nestlé launched its first Starbucks Nespresso coffee pods in 2019. This was the first time the Swiss company launched an aluminium coffee capsule outside its Nespresso spectrum, further accelerating its coffee business and consolidating its leadership.

Amazon-exclusive brands make move in coffee landscape

Online retailing giant Amazon continues to expand its private label products, investing in coffee options for British shoppers. Amazon brands Solimo and Consuelo coffee offer both ground coffee and coffee pods, compatible with the Nespresso system, at a lower price point than competing brands.

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