Bizdaq Blog

2016 Cafe Industry Report

From a coffee consumption point of view, Britain has come a long way in the last 20 years or so! As the bland cafes of old – with their reliance on instant granules – have gradually given way to a more vibrant and exciting coffee culture that has more in common with our continental neighbours.

A growth business

There are around 16,000 outlets in the UK, including the brand giants like Costa and Starbucks that seem to populate every high street, with the sector as a whole turning over around £6bn per annum*. That’s a lot of coffee. Costa is still the biggest brand in the country with 1400+ stores, but there’s also a growing number of artisan coffee houses enjoying popularity with customers looking for an authentic coffee experience. In fact the market for independent, boutique cafes offering great brews, stylish interiors and free wi-fi, has never been stronger.

Emerging trends

The trend seems to be very much towards convenience of location – as evidenced by the number of coffee shops often located in quite a small geographical area. Consumers don’t want to have to travel out of their way for coffee and – if they’re buying takeout – don’t want to have to wait too long to get it, either! That said, punters are increasingly aware not only of the quality of the drink but also how ethically the beans are sourced and how much care goes into the roasting process. There’s a big rise in cafes roasting their own blends in house.

Customers are also looking for the personal touch and value the interaction that independents are so good at providing. Starbucks may have increased sales by personalising coffee cups with customers’ names but independents can offer even better service.

A daily habit

Not only are we buying more coffee than ever before, but it seems as if it’s also becoming a daily habit for some: one in five coffee shop regulars now visits a coffee shop every day, compared with just one in nine just a handful of years ago. Which all adds up to around 1.7bn cups of coffee shop beverages consumed each year!

It’s a trend that seems likely to continue over the next few years; coffee shop research specialist Allegra Strategies forecasts a whopping £8.7 billion from 20,000+ outlets by 2018. Some of this will be down to the expansion of branded stores but there’s plenty of potential for ambitious independents, too.

How the future looks

How coffee shops will look and what they’ll sell will largely be consumer-driven. As customers become increasingly savvy about the provenance of beans and the quality of the brew, it’s likely we’ll see the establishment of a really strong artisan culture in some towns and cities, as well as improved provision across the whole sector – and maybe the emergence of new-style outlets.

It’s a good time to get into the market, especially if you can pre-empt consumer demand and deliver a popular and profitable solution in your chosen location. It’s important to carry out as much research as you can, so you can ensure your offering chimes with the local zeitgeist. Get it right, and you could be at the start of an incredible journey.

*Figures courtesy Allegra Strategies http://www.worldcoffeeportal.com/Home.aspx

 

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