Democratic Coffee: New Approaches to Coffee Away From Home

Strategy Briefing

About This Report

Oct 2017

Specialist coffee shops was one of the fastest growing foodservice channels globally in 2016. The format can be credited for growing the market for out-of-home coffee consumption, but innovation at the bottom of the ladder is making better-quality coffee more accessible than ever. Quality coffee is democratising, which means the unique selling point of specialist coffee shops is changing. Chained players are embracing format diversification and digital channels to remain competitive.

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Democratic Coffee: New Approaches to Coffee Away From Home

Specialist coffee shops is one of the fastest growing food service formats globally

Specialist coffee shops have had an impact on consumer preferences towards the coffee itself. Consumers now have more options, they are better informed, and are more confident in what they want.

Quality coffee is democratising.

Channel diversification and innovation at the bottom of the ladder is making quality coffee more accessible and accessibility is making it cheaper.

Democratisation is squeezing mid-tier specialist coffee shops.

Chained players are adopting new strategies to compete with channel diversity, developing new formats which are more accessible and more convenient.

Digital adoption is critical in being more accessible and more convenient to consumers.

Effective digital strategies should include rewards programmes, mobile ordering and in-store payment functionality in order to keep the customer engaged.

The Democratisation of Quality Coffee

Key findings
Coffee is better than ever, and it is getting cheaper
Expectations are changing in developed markets
Strong growth in out-of-home coffee consumption
Story-less coffee a driver of traffic to quick-service chains
Chained c-stores are disrupting specialist coffee shops in Japan
Innovative quick-service chains offer higher quality at extreme value
Costa Coffee vending competes with democratisation
Roadside coffee is improving, keeping true to ultra-low prices
A coffee shop experience, without the coffee
Starbucks evolves to compete with democratisation
Digital engagement is a unique selling point
Opportunities for chained specialist coffee shops
What this means for the chained players moving forward