With around 1.7bn cups of coffee sold each year in the UK, across more than 18,000 outlets, the coffee shop market is a substantial one which shows no sign of slowing. Indeed, predictions see it reaching 21,000 outlets by 2020, so it’s little wonder that this foodservice industry sector has its very own show – Caffè Culture – held over two days at Kensington Olympia 10-11th May. The show is targeted at groups like Costa and Nero, as well as the growing number of independent coffee shops, and indeed all those involved in the coffee market, which extends of course to the world of contract catering with operators like Compass, Sodexo, Bartlett Mitchell, etc. With 1 in 5 people in the UK visiting coffee shops in the UK, its big business for this boutique show. As your leading foodservice marketing agency, you’d expect us to be in attendance and report back, right? Too right. Here goes.
Recent research carried out by the Caffè Culture Show with over 1,600 consumers and 100 café owners found that over two thirds of café businesses saw an increase in turnover of over 10% YOY, with 51% seeing an increase in coffee sales, 42% seeing an increase in lunch sales and 26% seeing an increase in breakfast sales. A staggering 33% saw an increase in turnover of over £150,000. However, it seems the biggest challenge they face is driving healthy profits with 52% of established businesses naming this as a key issue and 41% of start-ups. Staffing is also a hot topic with 37% of established businesses identifying this as a key challenge, along with 41% of start-ups. Interestingly with so much focus on the on-the-go market Caffé Culture’s research showed that 60% of consumers choose to drink-in with only 40% opting to take-out.
As to what is driving customers through the door, well, great coffee is unsurprisingly the main driver with 81%, followed by a convenient location 45% and friendly and professional staff 30%, so get all these three right and you’ll be on to a winner. In general, 51% of consumers would like to see more independent coffee shops with 63% preferring to use an independent. They also want to see better quality coffee (42%) and more differentiation between coffee shops (35%).
In light of this insight the show’s aim is to blend business and coffee in order to help big and small operators alike find new ideas and suppliers to build a profitable business. By its very nature there is a fair amount of coffee about (as you would expect), however, with coffee shops looking to differentiate their offer and cater to the growing demand for all day dining there was far more than just coffee on offer. Incremental sales of snacks, breakfast and lunch are a big revenue driver for coffee shops, as is offering a wide and varied beverage menu with added theatre, so it was little surprise to see the likes of Twinings there wowing the gathered visitors with their masterclass on the theatre of tea (it’s not all about coffee!). Whilst new and niche soft drinks looked to catch the eye of passing buyers with Birch Water, Aloe Water, the exhibitor award winning Peanut ‘Hottie’ (a delicious peanut version of hot chocolate – is the best way I can describe it), flavoured syrups, funky furniture, innovative packaging, crazy flavours of crisps and popcorn, shiny equipment, tempting cakes and melt-in-the-mouth biscuits, were all there to be viewed and sampled. And as the leading foodservice agency, frankly it would have been rude not to try it all (all in the name of market research you understand).
With a background accompaniment from the obligatory hipster duo on guitar and box drum, the show was small but perfectly formed to appeal to the coffee shop market. The packed line-up at the business theatre and masterclass stage, not to mention the cupping zone, independent coffee roasters village and artisan food market meant there was something for everyone. So if you didn’t make it along this year and the coffee shop market is ‘your bag’ make sure you have the dates in your diary for 2017.
To find out more about the show click here.
Sources: Market stats from Allegra Strategies & insight from Cafeconomy 2016 Results