Hot Drinks in Western Europe

Delivery

This report comes in PPT.

Key findings

Inflationary environment resulting in increasing polarisation

There was increasing polarisation in a number of the bigger markets in recent years as the cost-of-living crisis forced many price-sensitive consumers to trade down or reduce their consumption of hot drinks, while, at the same time, premiumisation continued to be seen as other consumer segments looked for more interesting or exotic flavours as well as healthier or more sustainable options.

Private label share tops 26% in Spain in 2023

The inflationary environment in Spain has helped increase the retail value share of private label from less than 24% in 2021 to more than 26% in 2023, thanks to the popular lines from retailers like Mercadona and Carrefour. These products generally have lower unit prices than their branded counterparts, which attracts consumers looking to save money.

E-commerce here to stay

E-commerce was accounting for 8% of retail value sales in Western European hot drinks in 2023, with a regional high of almost 23% in the UK. Although shoppers have been enjoying a return to visiting physical stores post-pandemic, internet retailing has become an engrained habit with many, with increasing numbers of consumers doing the weekly shop from the comfort of their homes, taking advantage of the doorstep delivery service.

Fresh coffee beans expected to continue outperforming the market

Coupled with the success of grinding machines with accessible prices, fresh coffee beans are expected to continue being one of the better performers over the forecast period, as they are seen as offering more taste, and more authentic and less expensive coffee: once the initial investment of the machine is absorbed, it is the cheapest coffee (other than instant coffee).