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Coffee - UK, August 2013

Published by Mintel Group Ltd 11 Pilgrim Street London EC4V 6RN tel: 020 7606 4533 fax: 020 7606 5932 Sales hotline: +44 (0)20 7606 6000 email: [email protected] © Mintel Group Limited. All rights reserved. Statistics in this report are the latest available at the time of research

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Table of Contents Coffee UK, August 2013

© Mintel Group Ltd. All rights reserved. iii

INTRODUCTION ..................................................................................................................................... 9

Definition ......................................................................................................................................... 9 Abbreviations ................................................................................................................................ 10

EXECUTIVE SUMMARY ....................................................................................................................... 11

The market .................................................................................................................................... 11 The future ...................................................................................................................................... 11

Figure 1: Retail sales and forecast of coffee, UK, by value, 2008-18 ................................................................ 12 Market factors ............................................................................................................................... 12

Growth in over-55s and C2s will support the market ......................................................................................... 12 Encouraging consumers to trade up to premium varieties will add value to the market .................................... 12 Coffee shop brands .......................................................................................................................................... 12

Companies, brands and innovation .............................................................................................. 13 Nestlé leads the market .................................................................................................................................... 13 Figure 2: Leading manufacturers’ sales and shares in the UK retail coffee (excl RTD) market, by value, 2012/13 ............................................................................................................................................................ 13 NPD continues to focus on instant coffee ......................................................................................................... 13 Nestlé and Mondelēz dominate adspend .......................................................................................................... 14

The consumer ............................................................................................................................... 14 More than eight in ten adults drink coffee ......................................................................................................... 14 Figure 3: Consumption of coffee at home, June 2013 ...................................................................................... 15 Rich taste is the leading factor, generating majority appeal .............................................................................. 15 Figure 4: Factors influencing choice of coffee, June 2013 ................................................................................ 16

Half see coffee as a way to start the day ...................................................................................... 16 Figure 5: Drivers to drinking coffee, June 2013 ................................................................................................ 17

Quality is more important than convenience ................................................................................. 17 Figure 6: Agreement with statements on coffee, June 2013 ............................................................................. 18 Coffee drinkers are price-conscious but show willingness to trade up .............................................................. 18 Figure 7: Attitudes towards coffee, June 2013 .................................................................................................. 19

What we think................................................................................................................................ 19

ISSUES IN THE MARKET .................................................................................................................... 20

What is the potential for adding value to the instant coffee segment? ......................................... 20 How can the market push the ritual or ‘treat’ angle of coffee drinking? ........................................ 20 How can coffee pod manufacturers expand their target audience? ............................................. 21 How can the coffee market engage younger users? .................................................................... 21

TREND APPLICATION ......................................................................................................................... 23

Objectify ........................................................................................................................................ 23 Mood to Order ............................................................................................................................... 23 Mintel Futures: Generation Next ................................................................................................... 24

MARKET DRIVERS .............................................................................................................................. 25

Key points ..................................................................................................................................... 25 Consumption stays the same since the 1970s ............................................................................. 25

Figure 8: Index of household purchased quantities of coffee, tea and purer fruit juices, average per person, per week, 1974-2011 ........................................................................................................................................ 25

Prices appear to be stabilising ...................................................................................................... 26 Figure 9: Retail Price Index for tea, coffee & other hot drinks and soft drinks, January 2006-May 2013 ........... 26 Figure 10: Monthly weighted average price of coffee beans on world markets, by coffee bean type, January 2010-May 2013................................................................................................................................................. 27

Coffee shops remain a popular destination .................................................................................. 27 Figure 11: Market size and forecast of UK coffee shops, 2006-16 .................................................................... 28

Demographic changes .................................................................................................................. 29 Growth in number of over-55s bodes well for the market .................................................................................. 29 Figure 12: Trends in the age structure of the UK population, 2008-13 and 2013-18 ......................................... 29 Decline in ABs could threaten premiumisation in the market ............................................................................ 29 Figure 13: Forecast adult population trends, by socio-economic group, 2008-18 ............................................. 30

STRENGTHS AND WEAKNESSES ..................................................................................................... 31


© Mintel Group Ltd. All rights reserved. iv

Strengths ....................................................................................................................................... 31 Weaknesses.................................................................................................................................. 31

WHO’S INNOVATING? ......................................................................................................................... 32

Key points ..................................................................................................................................... 32 Premiumisation remains a focus for instant coffee NPD .............................................................. 32

Figure 14: Product launches within the UK coffee market, by main format types, 2009-13 ............................... 32 Ground and pods fight back .............................................................................................................................. 34

Detailed origin resonates with a niche audience of affluent buyers.............................................. 34 RTD formats see an increase in NPD ........................................................................................... 35 Targeting under-25s through innovation on flavour and ‘need states’ ......................................... 35

MARKET SIZE AND FORECAST ......................................................................................................... 37

Key points ..................................................................................................................................... 37 Robust performance in value and volume sales ........................................................................... 37

Figure 15: UK retail value sales of coffee, 2008-18 .......................................................................................... 38 The future ...................................................................................................................................... 38

Figure 16: Retail sales and forecast of coffee, UK, by value, 2008-18 .............................................................. 39 Figure 17: Retail sales and forecast of coffee, UK, by volume, 2008-18 ........................................................... 39

Methodology.................................................................................................................................. 40

SEGMENT PERFORMANCE ................................................................................................................ 41

Key points ..................................................................................................................................... 41 Instant coffee continues to dominate ............................................................................................ 41

Figure 18: Segment performance, by coffee type (take-home), 2010-12 .......................................................... 41 Ground coffee/coffee beans slowly gain market share ..................................................................................... 42 Coffee pods perform well .................................................................................................................................. 42

MARKET SHARE .................................................................................................................................. 43

Key points ..................................................................................................................................... 43 Nestlé is the leading manufacturer in the coffee market .............................................................. 43

Figure 19: Leading manufacturers’ sales and shares in the UK retail coffee (excl RTD) market, by value and volume, 2011/12 and 2012/13 .......................................................................................................................... 43

Nescafé Gold underperforms its other Nescafé stablemates ....................................................... 44 Figure 20: Leading brands’ sales and shares in the UK retail coffee (excl RTD) market, by value and volume, 2011/12 and 2012/13 .......................................................................................................................... 44

Starbucks leads the RTD coffee market ....................................................................................... 45 Figure 21: Leading brands’ performance in the UK retail RTD chilled coffee market, by value and volume, 2011/12 and 2012/13 ........................................................................................................................................ 45

COMPANIES AND PRODUCTS ........................................................................................................... 47

Cafédirect ...................................................................................................................................... 47 Mondelēz International .................................................................................................................. 48 Douwe Egberts (D.E Master Blenders) ......................................................................................... 49 Lavazza UK ................................................................................................................................... 50 Nestlé ............................................................................................................................................ 51

COFFEE SHOP BRANDS ........................................................................................................................ 52 Costa ............................................................................................................................................. 52 Starbucks ...................................................................................................................................... 52

BRAND RESEARCH............................................................................................................................. 54

Brand map..................................................................................................................................... 54 Figure 22: Attitudes towards and usage of brands in the coffee sector, May 2013 ........................................... 54 Correspondence analysis ................................................................................................................................. 55

Brand attitudes .............................................................................................................................. 56 Figure 23: Attitudes, by coffee brand, May 2013............................................................................................... 56

Brand personality .......................................................................................................................... 57 Figure 24: Coffee brand personality – macro image, May 2013 ........................................................................ 57 Figure 25: Coffee brand personality – micro image, May 2013 ......................................................................... 58

Brand experience .......................................................................................................................... 59


© Mintel Group Ltd. All rights reserved. v

Figure 26: Coffee brand usage, May 2013 ........................................................................................................ 59 Figure 27: Satisfaction with various coffee brands, May 2013 .......................................................................... 60 Figure 28: Consideration of coffee brands, May 2013 ...................................................................................... 61 Figure 29: Consumer perceptions of current coffee brand performance, May 2013.......................................... 62 Figure 30: Coffee brand recommendation – Net Promoter Score, May 2013 .................................................... 63

Brand index ................................................................................................................................... 64 Figure 31: Coffee brand index, May 2013 ......................................................................................................... 64 Figure 32: Coffee brand index vs. recommendation, May 2013 ........................................................................ 65

Target group analysis ................................................................................................................... 66 Figure 33: Target groups, May 2013 ................................................................................................................. 66 Figure 34: Coffee brand usage, by target groups, May 2013 ............................................................................ 67 Group One – Conformists ................................................................................................................................. 67 Group Two – Simply the Best ........................................................................................................................... 68 Group Three – Shelf Stalkers ........................................................................................................................... 68 Group Four – Habitual Shoppers ...................................................................................................................... 68 Group Five – Individualists ............................................................................................................................... 69

BRAND COMMUNICATION AND PROMOTION ................................................................................. 70

Key points ..................................................................................................................................... 70 Total adspend on coffee rises in 2012 .......................................................................................... 70

Figure 35: Above-the-line media advertising spend for the total coffee market (inc iced coffee), 2010-13 ........ 70 Nestlé invests over half of category adspend to protect its market leadership ............................ 71

Figure 36: Above-the-line media advertising spend on coffee, by advertiser, 2010-13 ..................................... 71 Figure 37: Above-the-line media advertising spend on coffee, by top five brands, 2012 ................................... 72

Mondelēz remains second highest advertiser, focusing on Kenco Millicano ............................... 72 TV spend falls in 2012, while outdoor and cinema gets a boost .................................................. 73

Figure 38: Above-the-line media advertising spend on coffee, by media type, 2010-13 ................................... 73

CHANNELS TO MARKET .................................................................................................................... 74

Key points ..................................................................................................................................... 74 Supermarkets dominate distribution ............................................................................................. 74

Figure 39: UK retail sales of coffee, by type of outlet, 2010-12 ......................................................................... 74

CONSUMER – USAGE ......................................................................................................................... 75

Key points ..................................................................................................................................... 75 More than eight in ten adults drink coffee ..................................................................................... 75

Figure 40: Consumption of coffee at home, June 2013 .................................................................................... 76 Potential for decaffeinated coffee to grow usage throughout the day ................................................................ 77

Three in five drink coffee at least once a day ............................................................................... 77 Figure 41: Consumption of coffee, by frequency, June 2013 ............................................................................ 78

Usage increases in line with age .................................................................................................. 78 Figure 42: Consumption of coffee (any type), by frequency, by age, June 2013 ............................................... 79 16-24s opt for convenient formats .................................................................................................................... 79 Figure 43: Consumption of instant cappuccinos/latte/mocha coffee (eg Kenco 3-in-1, Starbucks Via, etc.), chilled ready-to-drink coffee (eg Starbucks Frappuccino, Illy Iced Coffee, etc.) and coffee pods (eg Nespresso), by age June 2013 ......................................................................................................................... 80

Pods and micro-ground instant coffee attract a similar (and discerning) user base ..................... 80 Almost half drink three types of coffee or less .............................................................................. 81

Figure 44: Repertoire of types ofcoffee drunk, June 2013 ................................................................................ 81

CONSUMER – FACTORS INFLUENCING CHOICE ........................................................................... 82

Key points ..................................................................................................................................... 82 Rich taste generates majority appeal ........................................................................................... 82

Figure 45: Factors influencing choice of coffee, June 2013 .............................................................................. 82 16-24s rate flavours and ethical issues ........................................................................................ 83

Figure 46: Factors influencing choice of coffee, by age, June 2013 .................................................................. 83 Potential for premium brands ........................................................................................................ 83

Figure 47: Those for whom ‘a premium brand (eg Nespresso)’ is an important attribute when choosing to buy one in-home coffee brand over another, by region and gross annual household income, June 2013 ........ 84

Coffee deemed convenient ........................................................................................................... 84 Figure 48: Correspondence analysis of qualities associated with selected hot drinks, February 2013 .............. 85


© Mintel Group Ltd. All rights reserved. vi

CONSUMER – DRIVERS TO DRINKING COFFEE ............................................................................. 86

Key points ..................................................................................................................................... 86 Half see coffee as a way to start the day ...................................................................................... 86

Figure 49: Drivers to drinking coffee, June 2013............................................................................................... 86 ‘Treat’ aspect offers a tangible marketing opportunity ....................................................................................... 87

Providing a pick-me-up to consumers .......................................................................................... 87 Figure 50: Agreement with the statements ‘Coffee helps me to stay alert’ and ‘Coffee gives me an energy boost’, by age, June 2013 ................................................................................................................................. 88

Flavourings mask the bitter taste for 16-24s ................................................................................. 88 Figure 51: Agreement with the statements ‘I am sometimes put off by the bitter taste of coffee’ and ‘I tend to add flavourings (eg syrup) to my coffee to disguise the bitter taste’, by age, June 2013 ................................... 89

CONSUMER – ATTITUDES TOWARDS DRINKING COFFEE ........................................................... 90

Key points ..................................................................................................................................... 90 Quality is more important than convenience ................................................................................. 90

Figure 52: Agreement with statements on coffee, June 2013 ........................................................................... 91 Instant coffee delivers on caffeine and taste ..................................................................................................... 92

16-24s say it’s hard to recreate coffee shop style drinks at home................................................ 92 Figure 53: Agreement with the statements ‘It’s hard to recreate coffee shop style drinks at home’ and ‘I would like to recreate coffee shop flavours (eg eggnog at Christmas) at home’, by age, June 2013 ................ 93

CONSUMER – ATTITUDES TOWARDS COFFEE .............................................................................. 94

Key points ..................................................................................................................................... 94 Coffee drinkers are price-conscious but show willingness to trade up ......................................... 94

Figure 54: Attitudes towards coffee, June 2013 ................................................................................................ 94 Social occasions pose potential for trading up .................................................................................................. 95

Proving taste credentials will be key to premiumisation ............................................................... 95 Figure 55: Agreement with the statement ‘I would be more likely to buy a premium version of one of my favourite brands than switch to a new premium brand’, by age, June 2013 ...................................................... 96 Premium instant versions are helping to add value ........................................................................................... 96

Packaging should balance freshness with convenience .............................................................. 97 Little call for smaller formats ............................................................................................................................. 97

The majority remained unconvinced whether coffee pods represent value for money ................ 97

APPENDIX – MARKET DRIVERS ........................................................................................................ 98

Figure 56: GDP, PDI, consumer expenditure and savings, at current prices, 2008-18 ..................................... 98

APPENDIX – MARKET SIZE AND FORECAST .................................................................................. 99

Figure 57: Best- and worst-case forecasts for retail sales of coffee, by value, 2013-18 .................................... 99 Figure 58: Best- and worst-case forecasts for retail sales of coffee, by volume, 2013-18 ................................. 99

APPENDIX – BRAND RESEARCH .................................................................................................... 100

Figure 59: Brand usage, May 2013 ................................................................................................................. 100 Figure 60: Brand commitment, May 2013 ....................................................................................................... 100 Figure 61: Brand momentum, May 2013......................................................................................................... 101 Figure 62: Brand diversity, May 2013 ............................................................................................................. 101 Figure 63: Brand satisfaction, May 2013......................................................................................................... 102 Figure 64: Brand recommendation, May 2013 ................................................................................................ 102 Figure 65: Brand attitude, May 2013 ............................................................................................................... 102 Figure 66: Brand image – macro image, May 2013 ........................................................................................ 103 Figure 67: Brand image – micro image, May 2013 ......................................................................................... 103 Figure 68: Target groups, by demographics, May 2013 .................................................................................. 104 Figure 69: Psychographic segmentation, by target groups, May 2013 ............................................................ 106 Figure 70: Brand usage, by target groups, May 2013 ..................................................................................... 108

Brand index ................................................................................................................................. 109 Figure 71: Brand index, May 2013 .................................................................................................................. 109

APPENDIX – CONSUMER – USAGE ................................................................................................ 110

Figure 72: Consumption of coffee, June 2013 ................................................................................................ 110 Figure 73: Consumption of coffee, June 2013 ................................................................................................ 110 Figure 74: Most popular consumption of coffee-any coffee, by demographics, June 2013 ............................. 111 Figure 75: Next most popular consumption of coffee-any coffee, by demographics, June 2013 ..................... 113


© Mintel Group Ltd. All rights reserved. vii

Figure 76: Most popular consumption of coffee-any instant, by demographics, June 2013 ............................ 115 Figure 77: Next most popular consumption of coffee-any instant, by demographics, June 2013 .................... 117 Figure 78: Most popular consumption of coffee-any fresh, by demographics, June 2013 ............................... 119 Figure 79: Next most popular consumption of coffee-any fresh, by demographics, June 2013 ....................... 121 Figure 80: Most popular consumption of coffee-standard instant coffee (eg Nescafé), by demographics, June 2013 ....................................................................................................................................................... 123 Figure 81: Next most popular consumption of coffee-standard instant coffee (eg Nescafé), by demographics, June 2013 .............................................................................................................................. 125 Figure 82: Most popular consumption of coffee-ground coffee (eg carte noire), by demographics, June 2013 ............................................................................................................................................................... 127 Figure 83: Next most popular consumption of coffee-ground coffee (eg carte noire), by demographics, June 2013 ............................................................................................................................................................... 129 Figure 84: Most popular consumption of coffee-instant cappuccinos/latte/mocha coffee (ie Kenco 3-in-1, Starbucks Via, etc), by demographics, June 2013 .......................................................................................... 131 Figure 85: Next most popular consumption of coffee-instant cappuccinos/latte/mocha coffee (ie Kenco 3-in-1, Starbucks Via, etc), by demographics, June 2013 ...................................................................................... 133 Figure 86: Most popular consumption of coffee-decaffeinated coffee (any type), by demographics, June 2013 ....................................................................................................................................................... 135 Figure 87: Next most popular consumption of coffee-decaffeinated coffee (any type), by demographics, June 2013 ....................................................................................................................................................... 137 Figure 88: Most popular consumption of coffee-whole bean or micro-ground instant coffee (eg Kenco Millicano, Nescafé Azera), by demographics, June 2013................................................................................ 139 Figure 89: Next most popular consumption of coffee-whole bean or micro-ground instant coffee (eg Kenco Millicano, Nescafé Azera), by demographics, June 2013................................................................................ 141 Figure 90: Most popular consumption of coffee – coffee made using whole beans that I grind at home, by demographics, June 2013 .............................................................................................................................. 144 Figure 91: Next most popular consumption of coffee – coffee made using whole beans that I grind at home, by demographics, June 2013 .......................................................................................................................... 146 Figure 92: Most popular consumption of coffee-chilled ready-to-drink coffee (ie Starbucks frappuccino, Illy iced coffee, etc), by demographics, June 2013 ............................................................................................... 148 Figure 93: Next most popular consumption of coffee-chilled ready-to-drink coffee (ie Starbucks frappuccino, Iily iced coffee, etc), by demographics, June 2013 ......................................................................................... 150 Figure 94: Most popular consumption of coffee-coffee pods (eg Nespresso), by demographics, June 2013 .. 152 Figure 95: Next most popular consumption of coffee-coffee pods (eg nespresso), by demographics, June 2013 ............................................................................................................................................................... 155 Figure 96: Most popular consumption of coffee-other coffee types (eg one-cup coffee filter bags), by demographics, June 2013 .............................................................................................................................. 157 Figure 97: Next most popular consumption of coffee-other coffee types (eg one-cup coffee filter bags), by demographics, June 2013 .............................................................................................................................. 159

APPENDIX – CONSUMER – FACTORS INFLUENCING CHOICE ................................................... 162

Figure 98: Factors influencing choice of coffee, June 2013 ............................................................................ 162 Figure 99: Most popular factors influencing choice of coffee, by demographics, June 2013 ........................... 162 Figure 100: Next most popular factors influencing choice of coffee, by demographics, June 2013 ................. 164 Figure 101: Other factors influencing choice of coffee, by demographics, June 2013 ..................................... 167 Figure 102: Words associated with coffee, tea and hot chocolate, February 2013 ......................................... 169 Figure 103: Most popular words associated with coffee, by demographics, February 2013............................ 169

APPENDIX – CONSUMER – DRIVERS TO DRINKING COFFEE .................................................... 172

Figure 104: Reasons to drink coffee, June 2013............................................................................................. 172 Figure 105: Most popular reasons to drink coffee, by demographics, June 2013............................................ 172 Figure 106: Next most popular reasons to drink coffee, by demographics, June 2013 ................................... 175

APPENDIX – CONSUMER – ATTITUDES TOWARDS DRINKING COFFEE ................................... 178

Figure 107: Agreement with statements on coffee, June 2013 ....................................................................... 178 Figure 108: Most popular agreement with statements on coffee, by demographics, June 2013 ..................... 178 Figure 109: Next most popular agreement with statements on coffee, by demographics, June 2013 ............. 181

APPENDIX – CONSUMER – ATTITUDES TOWARDS COFFEE ..................................................... 184

Figure 110: Attitudes towards coffee, June 2013 ............................................................................................ 184 Figure 111: Agreement with the statement ‘I would notice if the price of my favourite coffee rose’, by demographics, June 2013 .............................................................................................................................. 185 Figure 112: Agreement with the statement ‘I am more likely to stock up on my favourite brand when it is on promotion’, by demographics, June 2013 ....................................................................................................... 187 Figure 113: Agreement with the statement ‘It’s only worth paying more for coffee if there is an obvious difference in taste from cheaper ones’, by demographics, June 2013 ............................................................ 189


© Mintel Group Ltd. All rights reserved. viii

Figure 114: Agreement with the statement ‘It’s worth paying more for packaging that keeps coffee fresher for longer’, by demographics, June 2013 ........................................................................................................ 191 Figure 115: Agreement with the statement ‘I would be more willing to try a higher priced coffee if recommended to me (eg by friends/family/online)’, by demographics, June 2013 .......................................... 193 Figure 116: Agreement with the statement ‘I would be more likely to buy a premium version of one of my favourite brands than switch to a new premium brand’, by demographics, June 2013 .................................... 195 Figure 117: Agreement with the statement ‘I am more likely to use premium coffee when drinking with others than when drinking alone’, by demographics, June 2013 ..................................................................... 197 Figure 118: Agreement with the statement ‘Information on product origin (eg Java Volcanic Island coffee) reassures me of high quality’, by demographics, June 2013 ........................................................................... 199 Figure 119: Agreement with the statement ‘Micro-ground coffee (eg Kenco Millicano) is worth paying more for than regular instant’, by demographics, June 2013 ................................................................................... 201 Figure 120: Agreement with the statement ‘I would be more likely to buy premium coffee if they were sold in smaller formats (eg single serve sachets, 40g jars)’, by demographics, June 2013 ........................................ 203 Figure 121: Agreement with the statement ‘Coffee pod machines/pods are worth the cost for the quality you get’, by demographics, June 2013 .................................................................................................................. 205 Figure 122: Agreement with the statement ‘Coffee-shop brands (eg Starbucks Via) make better in-home coffee than brands like Nescafé and Kenco’, by demographics, June 2013 ................................................... 207

UK RESEARCH METHODOLOGY ..................................................................................................... 210

Consumer research .................................................................................................................... 210 Sampling and weighting.................................................................................................................................. 210 Definitions ....................................................................................................................................................... 212 Qualitative Research ...................................................................................................................................... 214

Trade research ............................................................................................................................ 214 Informal .......................................................................................................................................................... 214 Formal ............................................................................................................................................................ 214 Desk research ................................................................................................................................................ 214

Statistical Forecasting ................................................................................................................. 215 European Research Methodology .............................................................................................. 218

Introduction Coffee UK, August 2013

© Mintel Group Ltd. All rights reserved. 9

Introduction Coffee continues to enjoy high levels of popularity, with three in ten users drinking coffee at least

daily. Market sales are estimated to reach £1.1 billion and 61 million kg in 2013, with forecast growth

of 22% to £1.4 billion and by 15% to reach 70 million kg in volumes by 2018.

Instant coffee continues to dominate the market, accounting for almost 80p in every £1 spent on coffee

bought for home consumption. Manufacturers are looking to premiumise everyday instant formats

(through the introduction of wholebean instant formats) as a means of diversifying and staving off

competition from fresh ground/pod coffee – which is now drunk by over half of UK consumers (56%).

Coffee is associated with providing a morning pick-me-up, with half of consumers seeing coffee as a

great way to start the day and more than a third saying it helps to keep them alert and gives them an

energy boost, both tangible attributes for the market to build upon.

Continuing investment in NPD and above-the-line support from major players such as Nestlé

(Nescafé) and Mondelēz (Kenco) will play a key role in keeping the category front of mind with the

consumer going forward, driving premiumisation and maintaining engagement.

Definition

This report covers coffee consumption for the in-home market only. Therefore, it does not include

coffee shops or other outlets where coffee is purchased and drunk outside the home, including vending

machines or self-serve coffee outlets.

The majority of in-home coffee is sold in supermarkets, but a small proportion of sales also takes place

through newsagents, convenience stores and specialist shops.

There are three broad groups of coffee in the take-home market:

Instant coffee – this is the largest sector accounting just over 80% of the market. This is where,

through various processes, the coffee is dehydrated into the form of powder and granules for sale,

usually in jars.

Roast and ground – this is when coffee is sold in the form of coffee beans or when the coffee beans

are sold ready-ground.

This sector includes coffee pods which are pre-packaged ground beans sold in their own filter to make

the coffee-making process easier. Included in this category are products for open and closed coffee

systems, such as those that take a cartridge or pod.

Ready-to-drink coffee – this is chilled ready-to-drink (RTD) coffee drinks such as Starbucks

Frappuccino. These currently make up a very small segment of the market and Mintel’s market size

figures exclude this segment. The Market Share section of this report does however provide sales data

on this segment and reference is made throughout.

The market definition includes decaffeinated coffee.

Value sales throughout this report are at retail selling prices (RSP). Market sizes at constant 2013

prices are devised using Mintel’s drink deflator. Crown copyright material is reproduced with the

permission of the Controller of HMSO and the Queen’s Printer for Scotland.

Introduction Coffee UK, August 2013


Excluded

Coffee sold in coffee shops, other on-trade outlets such as cafés, restaurants, pubs, etc, even if this

coffee is bought there and drunk at home.

Sales of coffee machines are excluded.

Abbreviations

GAD Government Actuary’s Department

GNPD Global New Products Database. For further details, please contact Mintel

on 020 7606 4533

ICO International Coffee Organization

Nielsen Media Research For further information, please contact

[email protected]

NPD New Product Development

NPS Net Promoter Score

ONS Office for National Statistics

PDI Personal Disposable Income

RPI Retail Price Index

RTD Ready-to-drink

Executive Summary Coffee UK, August 2013


Executive Summary “The ongoing path to premiumisation for instant coffee, the increasing accessibility of coffee

pods, and the emerging RTD chilled sector offer opportunities for real growth in this market, as

coffee brands use NPD to encourage consumers to develop wider and more added value

product repertoires.”

– Amy Price, Senior Food & Drink Analyst

The market

With an estimated size of 61 million kg in 2013, the UK coffee market is forecast by Mintel to

outperform the 8.9% volume growth experienced during 2008-13, to reach 70 million kg by 2018

(15% growth). This is a robust performance considering the maturity of the market. Coffee remains a

staple product, with high penetration levels (82%) and three in five adults drinking coffee at least once

a day.

Moves to curb promotional activity over the last few years have affected volume sales, although

sustained NPD and marketing activity by the leading brands have contributed to growing visibility.

Mintel forecasts that value growth between 2013 and 2018 will be lower than the 33% growth seen

over 2008-13, which saw the market reach an estimated £1.1 billion in 2013.

Instant coffee dominates, accounting for more than 70% of the market in value and volume terms,

demonstrating the popularity of instant coffee in the UK, with around half of consumers drinking it at

least once a day.

The coffee pods segment has experienced the fastest growth over 2010-12. As consumers look to

balance their need for quality and convenience, it continues to hold a niche share in the overall market

although the emergence of pods/capsules that are compatible for Nespresso machines should ensure

the cost of replacement coffee pods should become more affordable in the longer term.

The future

Above-average consumption among affluent consumers bodes well for driving value in the market, as

well as efforts to premiumise the market through NPD centred on value added formats eg coffee pods,

ground coffee and premium instant, sectors which are experiencing growth (see Segment

Performance).



FIGURE 1: RETAIL SALES AND FORECAST OF COFFEE*, UK, BY VALUE, 2008-18

(£m)

1,105

Best case (£m)1,568

Worst case (£m)1,133

Mintel forecast (£m)

1,350

400

600

800

1,000

1,200

1,400

1,600

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Market

valu

e (

£m

)

95%

Confidence intervals

90%

70%

50%

Actual Forecast

Est.

0

* excludes RTD coffee SOURCE: MINTEL/BASED ON IRI

Prices of coffee have stabilised following the 2011 peak when the average cost per million kg reached

its highest level after poor weather affected supply. While still high, prices do appear to be stabilising

in 2013 and remain in line with 2012 levels.

Market factors

Growth in over-55s and C2s will support the market

While the core consumer groups such as over-55s and C2s are set to grow in number by 2018,

supporting demand, the 16-34s and lowest socio-economic groups are also expected to experience a

rise in numbers, potentially dampening growth prospects.

Under-25s are, however, more likely to use convenient formats such as coffee pods, instant

cappuccinos etc and RTD chilled coffees. With this group being more likely to rate ‘added flavours’

and to say ‘I tend to add flavourings (eg syrup) to my coffee to disguise the bitter taste’, NPD on

flavoured formats would be a way to engage this group.

Encouraging consumers to trade up to premium varieties will add value to the market

The coffee market is continuing to look to premiumisation as a means to add value to the market.

Emphasising the quality credentials of premium versions of instant coffee (eg wholebean micro-

ground), ground coffee and coffee pods, should help to justify the price differential, with scope to

convince a greater number of consumers to trade up to these types and beyond standard instant.

Coffee shop brands

High street coffee shop chains such as Costa and Starbucks continue to offer stiff competition to in-

home consumption, despite the economic downturn, with just one in ten consumers in 2013 saying that

they have switched to drinking coffee more at home to save money.



However with one in four consumers saying it is hard to recreate coffee shop-style drinks at home,

there is considerable scope for foodservice brands such as Starbucks and Costa to replicate this success

in the retail arena.

Companies, brands and innovation

Nestlé leads the market FIGURE 2: LEADING MANUFACTURERS’ SALES AND SHARES IN THE UK RETAIL COFFEE (EXCL RTD) MARKET, BY VALUE, 2012/13*

* 52 w/e 27 April 2013 SOURCE: BASED ON IRI/MINTEL

Nestlé represents more than two fifths of value sales in the coffee market and also leads the market in

volume terms, reflecting the dominant position and ongoing success of its leading Nescafé brand.

Nescafé Original maintained its position as the leading brand in the UK coffee market, managing to

increase value and volume sales despite increasing competition from more premium formats, including

Nescafé’s own Nescafé Azera wholebean micro-ground instant variant, launched in March 2012.

Mondelēz is Nestlé’s closest rival in coffee, and although it grew value sales during 2012/13, it lost

value and volume share largely due to its struggling Kenco brand.

NPD continues to focus on instant coffee

Coffee manufacturers have increasingly been investing in NPD, with instant coffee continuing to see

more innovation than any other coffee segment, driving premiumisation through expanding wholebean

micro-ground formats.

Mondelēz launched Carte Noire Instinct and a Caffeine Free variant to its Kenco Millicano range in

2012, while Nestlé’s Nescafé Azera was extended to include Latte and Cappuccino flavoured variants

in early 2013.

Own-label is now looking to tap into this trend, with Morrisons launching M Instaground Coffee in

spring 2013.



Nestlé and Mondelēz dominate adspend

Adspend in the market tops £20 million and is dominated by Nestlé and Mondelēz, accounting for

80% of expenditure over 2010-12 and reflecting their lead in the overall coffee market.

Nestlé increased its adspend by almost 60% between 2011 and 2012. Campaigns included significant

investment on its Azera micro-ground instant brand and TV ads to accompany the release of a limited

edition Nescafé Original pack, which launched in December 2012.

Mondelēz focused on its Kenco Millicano brand in 2012, spending £3.2 million on launching a series

of TV ads including ‘Passion’ and ‘Harvest’ which use the tag line ‘each millicule is special’.

The consumer

More than eight in ten adults drink coffee

Coffee is a mature market, with more than eight in ten adults drinking coffee, and three in five doing

so at least once a day.

Instant coffee boasts the highest penetration (73%), with almost half of consumers drinking it on a

daily basis – an unassailable lead on all other types of coffee. Fresh coffee is also drunk by the

majority (56%), signalling its now mainstream usage and the impact of premiumisation on consumers.



FIGURE 3: CONSUMPTION OF COFFEE AT HOME, JUNE 2013 Base: 2,000 internet users aged 16+

* any instant coffee (net of instant coffee, instant cappuccinos/lattes and whole bean or micro-ground instant) ** fresh coffee drinkers (net of ground coffee or coffee made using whole beans that I grind at home or coffee pods) SOURCE: GMI/MINTEL

Rich taste is the leading factor, generating majority appeal

Rich taste is the main reason affecting coffee drinkers’ choice of one product over another, resonating

among 53% of coffee drinkers, while almost three in ten consumers (29%) rank fair trade as an

important choice factor.

16-24s are more likely than average to see added flavours and issues such as fair trade and organic as

factors influencing their purchase.



FIGURE 4: FACTORS INFLUENCING CHOICE OF COFFEE, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home

SOURCE: GMI/MINTEL

Half see coffee as a way to start the day

That half of consumers say ‘coffee is a good way to start the day’ and a quarter ‘always drink coffee

when having a break’ implies that the ritual of coffee drinking is part of its appeal.



FIGURE 5: DRIVERS TO DRINKING COFFEE, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home

SOURCE: GMI/MINTEL

The ‘treat’ aspect of coffee drinking offers a tangible marketing message for the sector. Encouraging

consumers to trade up when treating themselves would help to add value to the market, while

potentially limiting further migration to out of home coffee shops.

While the bitter taste of coffee acts as a deterrent to consumption among younger age groups,

flavourings such as syrup offer a means to overcome this.

Quality is more important than convenience

Quality is rated more highly than convenience by a sizeable minority, with almost one in three adults

who have drunk coffee at home (31%) saying that the quality of coffee is more important than how

easy it is to make.

The benefits of instant coffee are still apparent, with just under a third saying that instant coffee

delivers the same caffeine hit as non-instant and just 19% saying that standard instant coffee tastes

bland.

With one in five (21%) saying they notice a difference in quality between standard and micro-ground,

and one in four (27%) agreeing that micro-ground coffee is worth paying more for than regular instant,

there are clear opportunities for expanding the added value options available.

16-24s are more likely to say that it’s hard to recreate the coffee shop experience at home, signalling

that coffee shop brands sold in the retail environment should promote the authenticity of their products

as a means of recreating the taste and quality at home.



FIGURE 6: AGREEMENT WITH STATEMENTS ON COFFEE, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home

SOURCE: GMI/MINTEL

Coffee drinkers are price-conscious but show willingness to trade up

Pricing remains integral to the coffee sector. More than three in four consumers would notice if the

price of their favourite coffee went up and a similar number stock up on their favourite brand when it

is on promotion.

In order to justify premium price points, premium coffee brands need to prove their taste credentials to

consumers, with more than seven in ten agreeing that ‘It’s only worth paying more for coffee if there is

an obvious difference in taste from cheaper ones’.

Just one in four consumers are convinced that the quality of coffee pods is worth the extra cost,

suggesting that a focus on building value for money perceptions would widen their appeal.



FIGURE 7: ATTITUDES TOWARDS COFFEE, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home

SOURCE: GMI/MINTEL

What we think

Coffee is a household staple, drunk by more than eight in ten consumers, with three in five drinking it

‘at least once a day’. The ritualistic nature of coffee drinking remains a key driver behind the market’s

robust outlook over the next five years , with 50% saying it is a good way to start the day and a quarter

always drinking it when having a break, posing opportunities for brands to tap into the

habitual/ritualistic nature of coffee drinking through marketing activity or product development.

Instant coffee maintains an unassailable lead over all other formats, drunk by more than seven in ten

consumers, with half drinking it at least once a day. The convenience offered by standard instant is its

main selling point and driver to everyday consumption but it would seem that exposure to fresh coffee

when out of home is having an effect on at home usage.

The overall market has benefited from continuing investment in above-the-line advertising from major

players such as Nestlé and Mondelēz, with such support set to play a key role in keeping the category

front of mind with the consumer going forward.

The ongoing path to premiumisation for instant coffee, the increasing accessibility of coffee pods, and

the emerging RTD chilled sector offer opportunities for real growth in this market, as coffee brands

use NPD to encourage consumers to develop wider and more added value product repertoires. With a

quarter of consumers seeing a premium brand as a factor influencing their choice and more than three

in ten (31%) rating quality over convenience, there is marked potential to justify the price of premium

versions.

Issues in the Market Coffee UK, August 2013


Issues in the Market “Most pertinently for the coffee pods segment will be convincing consumers that the products

deliver better quality than instant coffee. Just one in four consumers are convinced that the

quality of coffee pods are worth the extra cost and wholebean micro-ground instant formats

attract a similar user base (25-34s, ABs and higher earners), crucially offering a cheaper

alternative to pods.

This suggests that the coffee pods segment needs to convince the wider population that the price

premium of coffee pods is justified, eg through promoting the lack of wastage, increased

freshness and quality taste.”

– Amy Price, Senior Food & Drink Analyst

What is the potential for adding value to the instant coffee segment?

Instant coffee has an unassailable lead over the other segments within the coffee market, with 73% of

consumers drinking instant coffee and almost half (47%) doing so ‘at least daily’.

Taste and functionality appear to be main selling points for instant, with just 19% saying standard

instant tastes bland and 31% saying instant coffee provides the same caffeine hit as non-instant.

There is also a stark awareness on price in the wider coffee sector (77% agree with the statement ‘I

would notice if the price of my favourite coffee rose’), with instant coffee perceived to be affordable,

with leading instant brand Nescafé having a strong value image (see Brand Research).

This price competitiveness has resulted in instant coffee failing to keep pace with value growth in the

wider coffee market, seeing a 16.3% rise over 2010-12, compared to 19.1% overall. With usage

already extremely high, the key to growing the segment will be through encouraging consumers to pay

more for instant coffee.

Here, the entrance of wholebean micro-ground instant coffee has helped to drive value sales. Since

Kenco Millicano was launched in 2010, the wholebean micro-ground instant coffee segment has

grown from strength to strength, with three in ten consumers drinking wholebean or micro-ground

formats, while 21% of in-home coffee drinkers say they notice the difference in quality between

standard and micro-ground varieties. Crucially, a sizeable minority (27%) agree that micro-ground is

‘worth paying more for than regular instant’, giving brands such as a Nescafé and Kenco a tangible

marketing message to promote through advertising campaigns.

Similarly, promoting word-of-mouth through brand ambassadors, would likely have a positive result,

appealing to the two fifths (39%) of consumers who would be more willing to try a higher priced

coffee if recommended (eg by friends/family/online).

How can the market push the ritual or ‘treat’ angle of coffee drinking?

Half of consumers say that coffee is a good way to start the day, more than a third (35%) say that

coffee makes a nice treat and a quarter of consumers always drink coffee when having a break. These

findings highlight how coffee drinking is in ingrained in British society, with a ritualistic element to

drinking it.

The coffee market should therefore pay greater attention to the ritual and treat element of coffee

drinking, promoting how coffee can be a good way to step back from everyday responsibilities

(children, work etc) and concentrate on something else as simple as making a coffee.



Encouraging consumers to trade up when treating themselves eg to ground coffee, would help to add

value to the coffee market, while potentially stemming any further migration to out-of-home coffee

shops, a market that is forecast to reach £1.5 billion in 2016.

Tapping into the treat aspect provides an opportunity to build a more emotional connection with

consumers when drinking coffee. Here, the coffee market could take cues from recent tea advertising.

With little to differentiate everyday tea brands from each other, the brands have looked to more

emotive messages, emphasising tea drinking as an everyday occasion and encouraging consumers to

take time out of their busy schedules to catch up with family and friends, or with yourselfmake time

for yourself. Recent campaigns include: ‘Make Time, Make Tetley’, ‘Everything Stops for Yorkshire

Tea’, PG Tips ‘Catch Up Cuppa’ and Twinings’ ‘Gets You Back To You’ campaign.

How can coffee pod manufacturers expand their target audience?

The coffee pod segment has been the star performer within the coffee market over 2010-12,

experiencing value and volume growth greater than 50% over this period to achieve £56 million (5%

share of coffee sales).

Almost a quarter of consumers use coffee pods, revealing a 25-34, affluent AB bias. These target

groups are more likely to be using coffee pods ‘at least once a day’. With the 25-34 age group forecast

to grow by 7.5% between 2013 and 2018, this bodes well for organic growth of this niche market.

Key to expanding the target audience will be education, thereby justifying the price premium, with

42% unsure whether coffee pod machines/pods are ‘worth the cost for the quality you get’.

Mintel’s Brand Research reveals for example that the Nespresso brand is considered innovative, but

the higher costs involved and failure to totally justify this cost means it needs to focus on making its

customers happier. This is turn will improve recommendation and then commitment.

A more affordable price for the machines could also help to broaden the user base, with last year’s

coffee report finding that 22% of consumers would be tempted to buy a coffee pod machine if the

price came down to below £50 (see Mintel’s Coffee – UK, April 2012).

Similarly, the entrance of Starbucks or Costa into the branded coffee pod/capsules market could have a

positive impact on growth, appealing to the near-quarter (24%) of consumers who struggle to recreate

coffee shop styles drinks at home.

How can the coffee market engage younger users?

16-24s are less likely than average to have drunk any type of coffee except coffee pods, instant

cappuccinos etc and RTD chilled coffee, with consumption increasing in line with age.

The bitter taste of coffee is a barrier to this group, who are more likely to say ‘I am sometimes put off

by the bitter taste of coffee’ (27% of 16-24s compared to 17% on average) and ‘I tend to add

flavourings (eg syrup) to my coffee to disguise the bitter taste’ (19% of 16-24s compared to 8% on

average).

This group is also more likely to visit coffee shops and to say ‘It’s hard to recreate coffee shop style

drinks at home’, indicating that the introduction of coffee shop branded syrups and flavourings (as

seen by Starbucks in the US) would help to drive coffee consumption at home.



More should also be done to highlight the energy boosting properties of coffee among this group, 16-

24s show above-average agreement with the statement ‘Coffee gives me an energy boost’ (41%

agreement among 16-24s compared to 34% on average).

The UK market could look to global examples of coffee claiming energy boosting properties for

inspiration, such as Avalanche Kick Start Coffee Energy Drink, available in New Zealand, which

features added guarana, taurine, minerals and vitamins for ‘an extra burst of energy’.

Promoting coffee on an ‘added energy’ platform would enable it to compete more effectively with

other non-alcoholic categories such as energy drinks, which are more popular among younger

consumers and which have seen a proliferation in naturally stimulating ingredients such as ginseng,

guarana and vitamin B.

Trend Application Coffee UK, August 2013


Trend Application Mintel’s approach in this section goes beyond merely identifying trends. We apply trends from

Mintel’s trend tool, Inspire, to understand the wider implications of cultural changes, gaining insight

into how companies and brands can translate these into on-the-ground opportunities relevant for the

coffee industry.

Objectify

Objectify is a consumer trend identified by Mintel that explores how food and drink brands are

reacting to an increasingly digital age, in which the virtual is being promoted as much as the physical,

by celebrating the value and longevity of physical goods.

A third of consumers agree that they are more likely to drink use premium coffee when drinking with

others than when drinking alone.

Premium coffee brands could therefore look to target social events such as dinner parties/when

entertaining, occasions when consumers feel able to justify paying a price premium.

Luxury packaging or branded coffee pots, which the host can display on the dinner/coffee table, would

help to position coffee brands as central to social occasions. On-pack serving suggestions/

recommendations (eg how much water to add or added flavours) would also help to alleviate pressure

on the host when serving the coffee, offering reassurance.

This would serve to add a layer of customisation and personalisation that would not be deemed

necessary on occasions when one is having a coffee on one’s own, but which would be suitable when

entertaining/socialising in the home.

Mood to Order

Mintel’s Inspire trend Mood to Order looks at how consumers are turning to ingredients that provide

emotional and not just nutritional benefits. It examines how people are searching for a quick

emotional pick-me-up on occasion, which is pointing them in the direction of mood enhancement via

natural ingredients, including the use of scents.

Almost a third (31%) of consumers say that the quality of coffee is more important than how easy it is

to make, suggesting that for a sizeable minority of coffee drinkers, the coffee-making journey is part of

the enjoyment ritual.

This quest for quality could be given an emotional spin through positioning coffee as a pick-me-up for

adults – tapping into the aroma and experiential element of making fresh coffee.

With half of consumers saying that coffee is a great way to start the day and the majority drinking it on

a daily basis (three in five drink it ‘at least once a day’), this indicates a certain reliance on coffee,

suggesting that campaigns that encourage consumers to think about ‘what does your coffee say about

you’ would resonate.

Packaging can help to build this connection. With two fifths of consumers agreeing that it’s worth

paying for packaging that keeps coffee ‘fresher for longer’, on-pack indicators that inform consumers

when their coffee is losing freshness and going stale and ultimately help to drive repeat purchasing as

consumers top up.

Trend Application Coffee UK, August 2013


Mintel Futures: Generation Next

According to Mintel Futures: Generation Next trend, young people are defined by a dichotomy: they

have either rejected the vices of their elders, or been denied access to them, but they’ve developed

their own health problems – sedentary lifestyles, obesity and depression – that are crying out for

corporate help.

Young adults aged 16-24 are less likely than average to drink coffee, with just 69% of 16-24s drinking

coffee, compared to 82% on average and 91% of over-65s.

They are, however, more likely to use convenient formats such coffee pods, instant cappuccinos and

RTD chilled coffee.

Health is a trigger for under-35s, who are less likely than average to say ‘coffee is a healthier option

compared to fizzy caffeine drinks’.

Douwe Egberts’ Flavour Collective product also places an emphasis on health, with marketing

referencing how the product contains two calories per mug, when served without milk. The choice of

flavours and the fact that the drink can be drunk hot or cold adds a level of excitement and

customisation to the drink, which is likely to resonate with younger consumers, who rate added

flavours as a factor influencing their purchase of coffee (26% of 16-24s and 18% of 25-34s, compared

to 14% on average).

This indicates that convenient or healthy formats could act as gateway products to younger consumers,

introducing them to coffee and increasing their likelihood of expanding their repertoire of coffee in the

future.

Market Drivers Coffee UK, August 2013


Market Drivers

Key points

Despite falling household usage of tea since the 1970s, coffee purchasing habits have

remained relatively flat during the period (albeit slightly regaining momentum since 2006),

reflecting the growing threat from soft drinks.

The cost of coffee appears to be stabilising, both in the UK and globally, with global prices of

Arabica coffee beans steadily falling since the 2011 peak.

Demographic changes, such as the predicted rise in the number of over-55s and C2s over

2013-18 should help to drive growth, these groups being higher than average coffee users.

ABs are forecast to retain their largest share of the population by 2018 (26%), however

growth in this group is more subdued than previously thought (0.6% between 2013-18).

Consumption stays the same since the 1970s

The consumption of coffee has been stable since the 1970s, according to the results from Defra’s

most recent Family Food Survey (December 2012.

While tea represents the main source of competition in terms of hot drinks, usage has been in long-

term decline over the period. Instead, coffee looks to have lost ground to soft drinks like pure fruit

juice, which have seen purchase quantities leap ahead over the period.

FIGURE 8: INDEX OF HOUSEHOLD PURCHASED QUANTITIES OF COFFEE, TEA AND PURER FRUIT JUICES, AVERAGE PER PERSON, PER WEEK, 1974-2011

SOURCE: DEFRA FAMILY FOOD SURVEY/MINTEL



Prices appear to be stabilising

The retail price of coffee has been climbing since 2006, rising significantly in 2011, although

prices do appear to be stabilising in 2013 and remain in line with 2012 levels. In contrast, tea and

soft drink prices continue to climb, suggesting opportunities for coffee to be positioned as an

affordable option.

Having previously seen an escalation in prices owing to tight global supply, prices of Arabica and

Robusta coffee beans have been falling since the 2011 peak (when heavy rains affected production

in areas such as Colombia and Indonesia), and appear to be stabilising. This is serving to ease

pressure on manufacturers who have been increasingly been looking to premiumisation as a means

of justifying price increases.

FIGURE 9: RETAIL PRICE INDEX FOR TEA, COFFEE & OTHER HOT DRINKS AND SOFT DRINKS, JANUARY 2006-MAY 2013

SOURCE: OFFICE FOR NATIONAL STATISTICS/MINTEL

With more than three in four consumers agreeing that they would notice if the price of their

favourite coffee rose, (agreement with this statement higher among standard instant drinkers), this

puts pressure on manufacturers or retailers to absorb rising costs.

Adding further value to the category is therefore challenging. Micro-ground wholebean instant

formats by brands such as Kenco, Nescafé and Starbucks are being positioned as offering

heightened quality – with 27% of consumers agreeing that micro-ground coffee is worth paying

more for than regular instant.



FIGURE 10: MONTHLY WEIGHTED AVERAGE PRICE OF COFFEE BEANS ON WORLD MARKETS, BY COFFEE BEAN TYPE, JANUARY

2010-MAY 2013

0

50

100

150

200

250

300

350Ja

n-1

0

Mar-

10

May-1

0

Jul-

10

Sep-1

0

Nov-1

0

Jan-1

1

Mar-

11

May-1

1

Jul-

11

Sep-1

1

Nov-1

1

Jan-1

2

Mar-

12

May-1

2

Jul-

12

Sep-1

2

Nov-1

2

Jan-1

3

Mar-

13

May-1

3

US c

ents

per

pound (

lb)

Colombian Mild Arabicas Other Mild Arabicas

Brazilian Natural Arabicas Robustas

SOURCE: ICO/MINTEL

Coffee shops remain a popular destination

High street coffee shop chains such as Costa and Starbucks continue to offer stiff competition to

in-home consumption, despite the economic downturn, with just one in ten consumers in 2013

saying that they have switched to drinking coffee more at home to save money (see Consumer –

Drivers to Drinking Coffee section).

This suggests that consumers remain committed to relatively low-cost categories such as out-of-

home coffee, where operators have successfully tapped into the personalisation/customisation

trend, as well as launching new products like cold summer drinks (eg Starbucks Refresha range)

and smoothies, moves which differentiate the market from in-home. The adoption of ‘better

coffee’ products and increased availability from operators such as McDonald’s, which targeted

coffee drinkers with its ‘Coffee Moments’ TV advertising campaign in 2012, has also given

consumers more options at different price points.



FIGURE 11: MARKET SIZE AND FORECAST OF UK COFFEE SHOPS, 2006-16

SOURCE: MINTEL (TAKEN FROM COFFEE SHOPS – UK, FEBRUARY 2012)

While the predicted recovery in consumer spending (see Appendix) will in part benefit in-home

food and drink products, with consumers likely to increase their spend on added value products,

dining out and going out have since late 2009 remained among consumers’ top priorities for

spending extra money on, according to Mintel’s consumer data.

Offering consumers a tangible alternative through premium varieties should stem any dramatic

shifts in coffee consumption from in- to out-of-home venues. Newer formats such as coffee pods

help to position coffee for in-home consumption as delivering on quality, appealing to the almost

one in three consumers who say that ‘quality is more important to me than how easy it is to make’

(see Consumer Attitudes Towards Drinking Coffee section). Furthermore, the fact that over half

(56%) of UK consumers drink fresh coffee at home demonstrates the latent demand for high

quality coffee drinks in the home.



Demographic changes

Growth in number of over-55s bodes well for the market FIGURE 12: TRENDS IN THE AGE STRUCTURE OF THE UK POPULATION, 2008-13 AND 2013-18

SOURCE: OFFICE FOR NATIONAL STATISTICS/GAD/MINTEL

The forecast 9.1% rise in the over-55 age group bodes well for the wider coffee market, given the

higher than average usage among these consumers, with frequency of drinking coffee increasing

by age.

While over-65s show greater preference for instant formats, 55-64s are more likely than average to

drink fresh coffee at home. This indicates that there are opportunities to maximise the value

potential of the 55-64-year-old cohort through encouraging them to take time out while savouring

a fresh coffee, as evidenced in Mintel’s Inspire trend Slow It All Down, placing an emphasis on

quality.

Under-25s are less likely than average to drink hot coffee (except coffee pods), posing a challenge

for growth of the market in the future although they are more likely than average to drink the

typically sweeter varieties of RTD chilled coffee, instant cappuccinos etc (they are more likely to

be put off by the bitter taste, according to Mintel’s research for this report).

The energy-boosting properties of coffee also appeal to this group, suggesting that a focus on

providing energy through added/alternative ingredients (to caffeine) should place coffee in a better

position to compete with other non-alcoholic categories such as energy drinks, which are more

popular among younger consumers and which have seen a proliferation in naturally stimulating

ingredients such as ginseng, guarana and vitamin B.

Decline in ABs could threaten premiumisation in the market

The effect of the economic downturn has ensured that ABs are no longer forecast to grow as

sharply as previously thought. This therefore threatens opportunities to drive premiumisation in

the market, with ABs demonstrating above average usage of fresh coffee eg ground coffee, coffee

pods, these types of coffee typically costing more than standard varieties.



FIGURE 13: FORECAST ADULT POPULATION TRENDS, BY SOCIO-ECONOMIC GROUP, 2008-18 2008 2013 (est) 2018 (proj) % change % change 000s 000s 000s 2008-13 2013-18

AB 13,526 13,860 13,941 +2.5 +0.6 C1 14,563 14,377 13,672 -1.3 -4.9 C2 10,618 11,688 12,749 +10.1 +9.1 D 7,846 8,048 8,335 +2.6 +3.6 E 4,095 4,598 5,210 +12.3 +13.3 Total 50,647 52,571 53,907 +3.8 +2.5

SOURCE: OFFICE FOR NATIONAL STATISTICS/MINTEL

The 9.1% growth in C2s, however, should benefit the coffee market, since this group shows

above-average usage of the majority of coffee types apart from decaffeinated.

The combined C2DE socio-economic group is however less likely than ABs to use coffee pods ‘at

least once a day’, which reflects the high costs associated with the pods and cartridges that fit

capsule machines, and the fact that instant coffee represents a much cheaper alternative to fresh

formats.

Strengths and Weaknesses Coffee UK, August 2013


Strengths and Weaknesses

Strengths

Penetration of standard coffee is high, forming part of the daily ritual for at least 47% of adults.

There is however scope to build user repertoires of different types of coffee, with newer formats

such as coffee pods showing the greatest growth over 2010-12.

The rise in decaffeinated options could improve coffee’s competitive positioning from a health

perspective.

The expected rise in the number of 25-34s and ABs over 2013-18 bodes well for coffee pods in

particular, these group having above-average consumption of this format and being more likely to

drink it ‘at least once a day’.

Coffee manufacturers have increased their investment in NPD, with instant coffee continuing to

see more innovation than any other coffee segment, driving premiumisation through expanding

wholebean micro-ground formats.

There is a consistently high level of adspend in the market, driven by advertisers such as Nestlé

and Mondelēz, in support of their Nescafé Azera and Kenco Millicano brands respectively, a trend

that is continuing into 2013.

Weaknesses

Instant coffee, which dominates the market in value and volume sales, is struggling to keep pace

with the wider sector in value terms, although premiumisation through micro-ground formats is

helping to encourage consumers to pay more for instant coffee.

With the majority (60%) of consumers already drinking coffee at least once a day, the onus is on

operators to drive interest in added value products.

Usage of coffee increases in line with age, with 16-24s less likely to drink coffee except coffee

pods, instant cappuccinos and RTD chilled coffee. While the bitter taste of coffee is a barrier to

this group, flavourings such as syrup offer them a way to disguise this attribute.

Price is integral to the coffee market, with the majority (77%) agreeing that they would notice if

the price of their favourite coffee rose. With coffee subject to global price fluctuations, this puts

pressure on the industry to control any hikes in price.

Coffee purchasing has remained static since the 1970s, with increasing threats from other soft

drinks, which are popular among younger age groups. Promoting the functionality of coffee (eg as

providing an energy boost) to younger age groups should help to position coffee as a viable

alternative to products such as energy drinks.

Who’s Innovating? Coffee UK, August 2013


Who’s Innovating?

Key points

Instant coffee has continued to see more innovation than any other coffee segment, in recent

years embarking on a premiumisation push, for example through the launch of wholebean

instant coffee, where finely-milled coffee beans are added to instant coffee to provide a richer

flavour.

There are a growing number of launches using single-origin beans, targeting affluent and

discerning coffee drinkers, with an emphasis being placed on the provenance and distinctive

taste from different regions.

While still niche compared to freeze dried coffee, there has been a rise in the RTD coffee

products launched, with Morrisons launching the first own-label variant from August 2013

in a bid to take on leading brands Starbucks and Emmi.

Douwe Egbert’s The Flavour Collective is an example of flavoured coffees (suitable for

drinking hot or cold) aiming to target younger coffee-shop drinkers.

Premiumisation remains a focus for instant coffee NPD FIGURE 14: PRODUCT LAUNCHES WITHIN THE UK COFFEE MARKET, BY MAIN FORMAT TYPES, 2009-13

* until May 2013 ** includes beans and bags/pods/pre-filled filters SOURCE: MINTEL GNPD

In a bid to challenge the encroaching market share of ground coffee/coffee pods (see Segment

Performance), instant coffee brands have in recent years embarked on a premiumisation push, for

example through the launch of wholebean instant coffee, where finely-milled coffee beans are

added to instant coffee to provide a richer flavour.

Kenco’s premium instant brand, Millicano, added a Caff Free variety, a Refill pack and a 10-stick

version to the range in summer 2012, in an effort to expand usage beyond the core product.



Fellow Mondelēz brand Carte Noire launched its Instinct wholebean instant range in early 2012

and has followed Millicano in adding refill packs and stick formats to the line-up.

Caffeine free coffee is on the rise. In 2009, decaffeinated coffee accounted for 5% of new coffee

products launched rising to 8% by 2012. Recent launches (2012-13) include Morrisons’ Decaff

Gold Instant Cappuccino, Jimmy’s Decaf Iced Coffee and Nescafé Original’s Decaffeinated

Soluble Coffee.

Nescafé, which launched its Azera brand of barista-style instant coffee in 2012, extended its range

to include Cappuccino and Latte Flavoured variants in early 2013.

Own-label brands are also tapping into this trend towards superior quality instant coffees offering

better convenience over ground, with Morrisons launching M Instaground Coffee in spring 2013.

The product is a fine milled instant roast and ground coffee, made of blended Arabica and Robusta

coffee beans. The launch forms part of Morrisons’ wider own-brand revamp, with the retailer

significantly investing in its own-label range and being the leading innovator in 2012 and 2013 (to

May).

Key analysis: With more than seven in ten consumers agreeing with the statement: ‘It’s only worth

paying more for coffee if there is an obvious difference in taste from cheaper ones’ and ‘rich taste’

ranked as the most important factor to consumers when purchasing coffee, delivering on taste is

vital in terms of justifying a price premium to consumers.

With around than three in ten (31%) consumers saying that quality is more important than how

easy it is to make, wholebean instant coffees should continue to emphasise the duel benefits of

superior taste and speed/ease of use that instant offers. Mintel’s Inspire trend Guiding Choice looks

at how time-pressed consumers are looking for shortcuts, with established brands Nescafé, Kenco

and Carte Noire here at an advantage, offering consumers a premium version from brands (and

products) they trust.



Ground and pods fight back

Following reduced NPD activity in 2010 and 2011, ground coffee brands have been stepping up

innovation levels in 2012/13, in a bid to counteract the innovation seen at the premium end of the

instant market.

Pods, while remaining the star performer in terms of market growth, have seen little innovation

over the last couple of years although, following the expiry of Nespresso’s 20-year patent on

capsules, a number of companies have been quick to produce their own capsules to work in

Nespresso machines. CaféPod, for example, launched capsules compatible with Nespresso

machines in August 2012 in the categories Smooth, Intense, Light & Lively and Decaffeinated. In

spring 2013, British coffee pod manufacturer Dualit won a major court case in which it was ruled

that its capsules, which can be used in Nestlé’s Nespresso machines, do not infringe Nespresso’s

patents.

Key analysis: The extension of Nespresso-compatible coffee pods should help to broaden the reach

of pods, generating greater scope for innovation in the segment.

While potentially damaging the market in terms of value, as the alternative pods tend to be more

competitively priced, Nespresso-compatible pods should also help to encourage more frequent usage

among less affluent consumers, posing potential for more ‘everyday’ formats.

Detailed origin resonates with a niche audience of affluent buyers

Origin information is of importance to the most affluent consumers. 19% of ABs and 22% of

higher earners see this as a factor influencing their choice when buying coffee (compared to 14%

on average).

Accordingly, a number of manufacturers have launched coffee made using single-origin beans,

with an emphasis being placed on the distinctive taste from different regions and even named

farms, in order to imply exclusivity.



For example, Kenco added a 100% Colombian Coffee to its single origin range in spring 2013,

which also includes coffee from Brazil, Costa Rica and Peru.

Cafédirect’s Mountain Reserve Machu Picchu Coffee was repackaged during summer 2013. This

gourmet instant coffee is said to ‘contain notes distinctive to the high, fertile lands of the Machu

Picchu region’. Others in the range include coffee from the regions: Kilimanjaro in Tanzania and

Cloud Forests of Nicaragua.

Key analysis: Kenco’s 100% Colombian coffee is Rainforest Alliance certified. This ethical angle

helps to heighten the emotional connection and allow consumers to envision the intangible benefits

a brand or retailer can bring.

RTD formats see an increase in NPD

While still niche, the RTD coffee segment has benefited from Starbucks’ presence in the category,

with the number of new products more than doubling over 2010-12, to represent 12% of new

coffee products launched in 2012.

Limited editions have become a feature within the market, with specialist iced coffee brand

Jimmy’s (whose first product went on sale in Selfridges in 2011) and Starbucks launching

Gingerbread and Caramel Macchiato flavours respectively in the run-up to Christmas 2012.

Emmi added a limited edition Vanilla Tahiti flavour to its Caffe Latte range in 2012, which has

since been made permanent (although dropping Tahiti from the name), following by a Caramel

New York Edition in 2013. A multipack of three 230ml units of Caffe Latté Cappucino was added

to the range in 2012.

Meanwhile, Morrisons is to launch the first own-label iced coffee products from mid-August 2013.

M Iced Coffee in latte and cappuccino flavours will be available in 330ml cartons, in similar

packaging used by the Jimmy’s iced coffee range. The product carries the strapline ‘For a cool

coffee on the go!’, providing an alternative to Starbucks and Emmi – the leaders in the RTD coffee

market (see Market Share).

Targeting under-25s through innovation on flavour and ‘need states’

There has been a notable lack of innovation in flavours of coffee, with unflavoured coffee

accounting for around 90% of new launches over the past few years. Flavoured coffees are

particularly popular among younger consumers (26% of 16-24s look for this attribute when buying

coffee, compared to 14% on average), as are RTD chilled coffees. A number of brands are looking

to flavour as a means of attracting this typically low usage group, for example Douwe Egberts’

launched The Flavour Collective in August 2012. The coffee is freeze dried and was initially

available in three flavours (Roasted Hazelnut, Delicate Vanilla and Smooth Caramel), with an

Enticing Chocolate variant added to the range in summer 2013. The product can be served hot or

cold over ice. Health is also a feature, with an emphasis is also placed on how the product contains

2 calories per mug, when served without milk.



Key analysis: 16-24s, who are more likely than average to visit coffee shops are also more likely to

agree with the statement ‘I would like to recreate coffee shop flavours (eg eggnog at Christmas) at

home’ (22% compared to 13% on average), highlighting the untapped potential of introducing

limited edition flavours by the likes of Starbucks and Costa, which already enjoy a retail presence in

the UK.

Following a trend also seen in the tea market, online coffee brand Weanie Beans has targeted the

‘need’ states of a typically younger audience by launching a ‘Hangover Coffee’ in 2012. This is

higher in caffeine than its other coffees with a 70:30 blend of Guatemalan maragogype and

Ugandan robusta beans. This followed the launch of Wake Up Coffee, a blend of Kenyan Arabica

with a strong and powerful blend of Robusta.

Key analysis: Promoting coffee on an ‘added energy’ platform would enable it to compete more

effectively with other non-alcoholic categories such as energy drinks, which are more popular

among younger consumers and which have seen a proliferation in naturally stimulating ingredients

such as ginseng, guarana and vitamin B.

Market Size and Forecast Coffee UK, August 2013


Market Size and Forecast

Key points

The coffee market is estimated to grow by almost 5% to reach £1.1 billion in 2013, with

stabilising global prices stemming the tide in rising prices over the last couple of years.

Volume sales of coffee are expected to show robust growth of 3.4% in 2013, reaching 61

million kg, despite attempts to reduce promotional activity during the year.

Mintel forecasts a 22% rise in value sales to reach £1.4 billion by 2018, fuelled in part by

premiumisation in the market. Volumes are expected to reach 70 million kg, a 15% growth

over the 2013-18 period, boosted by growth in emerging segments such as coffee pods.

Robust performance in value and volume sales

With an estimated size of 61 million kg in 2013, the UK coffee market is forecast by Mintel to

outperform the 8.9% volume growth experienced during 2008-13, to reach 70 million kg by 2018

(15% growth).

This is a robust performance considering the maturity of the market. Coffee remains a staple

product, with high penetration levels (82%) and three in five adults drinking coffee at least once a

day.

Moves to curb promotional activity over the last few years have affected volume sales, although

sustained NPD and marketing activity by the leading brands have contributed to growing

visibility.

Greater segmentation in the market is helping to drive new coffee occasions in the home, with

coffee pods showing the greatest growth. While ground coffee volume growth has slowed, the

fresh segment is benefiting from consumers’ latent demand for quality products.

In contrast, Mintel forecasts that value growth between 2013 and 2018 will be lower than the 33%

growth seen over 2008-13, which saw the market reach an estimated £1.1 billion in 2013. UK and

global prices appear to be stabilising, following the 2011 peak (see Market Drivers), although

retail coffee prices are still much higher in 2013 compared to 2006.

The average price per m kg has risen by almost 22% over the 2008-13 period, with steeper rises

being seen over 2010/11 and 2011/12 than in previous years, although this rise is set to be much

lower over 2012/13.



FIGURE 15: UK RETAIL VALUE SALES OF COFFEE*, 2008-18 Total Index % annual

change Total Index % annual

change £m at 2013

prices

Index % annual change

m (kg) £m

2008 56 92 na 832 75 na 1,034 94 na 2009 54 89 -3.6 859 78 3.2 1,014 92 -1.9 2010 58 95 7.4 886 80 3.1 1,014 92 - 2011 58 95 - 964 87 8.8 1,042 94 2.8 2012 59 97 1.7 1,055 95 9.4 1,104 100 6.0 2013 (est) 61 100 3.4 1,105 100 4.7 1,105 100 0.1

2014 (fore) 62 102 2.3 1,155 105 4.5 1,111 101 0.5 2015 (fore) 64 105 3.0 1,212 110 4.9 1,118 101 0.6 2016 (fore) 66 109 3.0 1,262 114 4.1 1,118 101 0.0 2017 (fore) 68 112 3.0 1,313 119 4.1 1,117 101 -0.1 2018 (fore) 70 115 3.1 1,350 122 2.8 1,102 100 -1.3 * excludes RTD coffee SOURCE: BASED ON IRI/MINTEL

The future

NPD centred on value-added formats eg coffee pods, ground coffee and premium instant, should

maximise opportunities to target affluent ABs, who are above-average coffee users. Although this

sector is forecast to experience minimal growth by 2018 (0.6%), it holds the largest share of the

population.

While the core consumer groups such as over-55s and C2s are set to grow by 2018, supporting

demand, the 16-34s and lowest socio-economic groups are also expected to experience a rise in

numbers, potentially dampening growth prospects.

Market performance will therefore depend on the continued high levels of NPD and marketing as

well as below-the-line promotional strategies, since retail price inflation adds a volatile element to

the market outlook.



FIGURE 16: RETAIL SALES AND FORECAST OF COFFEE*, UK, BY VALUE, 2008-18

(£m)

1,105

Best case (£m)1,568

Worst case (£m)1,133

Mintel forecast (£m)

1,350

400

600

800

1,000

1,200

1,400

1,600

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Market

valu

e (

£m

)

95%


90%

70%

50%

Actual Forecast

Est.

0

* excludes RTD coffee SOURCE: BASED ON IRI/MINTEL FIGURE 17: RETAIL SALES AND FORECAST OF COFFEE*, UK, BY VOLUME, 2008-18

(m kg)61

Best case (m kg)76

Worst case (m kg)65

Mintel forecast (m kg)70

30

35

40

45

50

55

60

65

70

75

80

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Market

volu

me (

m k

g)

95%


90%

70%

50%

Actual Forecast

Est.

0

* excludes RTD coffee SOURCE: BASED ON IRI/MINTEL

The best- and worst-case forecasts take the volume sales of coffee from an expected 61 million

kilograms in 2013 to 76 million kilograms (best case) and 65 million kilograms (worst case) in

2018. Based on the long-term trend in consumption and popularity of coffee as an everyday drink,

Mintel expects the market to continue to decline, reaching 70 million kilograms in 2018.



The best- and worst-case forecasts take the value of coffee from an expected £1.1 billion in 2013

to £1.6 billion (best case) and £1.1 billion (worst case) in 2018. Based on the rise in the number of

core users in the C2 socio-economic group, Mintel expects the market to grow to a total of £1.4

billion in 2018 (additional forecast tables can be found in the Appendix).

Methodology

Mintel has produced this forecast based on an advanced statistical technique known as ‘multivariate

time series auto-regression’ using the statistical software package SPSS.

The model, based on historical market size data taken from Mintel’s own market size database and

supplemented by macro- and socio-economic data sourced from credible organisations (eg ONS, HM

Treasury, Bank of England), searches for relationships between actual market sizes and a selection of

key economic and demographic determinants (independent variables) in order to identify those

predictors having the most influence on the market.

For the coffee market, the C2 socio-economic group and GDP were identified to have the most

influence on the market value and volumes.

Segment Performance Coffee UK, August 2013


Segment Performance

Key points

Instant coffee continues to dominate value and volume sales, accounting for almost 80p in

every £1 spent and benefiting from the fact that almost half of consumers drink instant

coffee at least once a day.

Ground coffee/coffee beans have seen value sales outperform the wider sector over 2010-12

and are slowly gaining market share. Volume sales are, however, stalling, reflecting how

consumers are more likely to be drinking these types on a less frequent (ie weekly) basis.

Coffee pods remain the star performer in terms of sales growth, although the segment is still

niche, with a 5% share of the market. This suggests that the upfront cost of coffee pod

machines and the premium charged for replacement pods remain a barrier to more

widespread uptake.

Instant coffee continues to dominate FIGURE 18: SEGMENT PERFORMANCE, BY COFFEE TYPE (TAKE-HOME), 2010-12 2010 2011 2012 2010-12

£m % share £m % share £m % share % change

Instant coffee 698 79 748 78 812 77 +16.3 Ground coffee/coffee beans

152 17 173 18 187 18 +23.0

Coffee pods 36 4 43 4 56 5 +55.6 Total 886 100 964 100 1,055 100 +19.1

2010 2011 2012 2010-12

m (kg) % share m (kg) % share m (kg) % share % change

Instant coffee 42 72 42 72 42 71 - Ground coffee/coffee beans

14 24 14 24 14 24 -

Coffee pods 2 3 2 3 3 5 +50.0 Total 58 100 58 100 59 100 +1.7

SOURCE: BASED ON IRI/MINTEL

While slightly losing market share in value terms and failing to keep pace with the wider growth in

the overall market (16.3% compared to 19.1%), instant coffee continues to dominate the wider

take-home market, accounting for almost 80p in every £1 spent.

The entrance of premium-positioned wholebean instant coffee products such as Kenco Millicano

(launched in 2010) or Nescafé Azera (unveiled in March 2013), have encouraged consumers to

pay more for instant coffee, helping to add value to the market. Indeed, more than a quarter (27%)

of consumers agree that micro-ground coffee is worth paying more for than regular instant (see

Consumer Attitudes Towards Coffee).

Segment Performance Coffee UK, August 2013


Ground coffee/coffee beans slowly gain market share

Ground coffee/coffee beans have seen value growth outperform the wider sector, driven by the

fact that the majority (56%) of consumers now drink fresh coffee at home.

Leading ground coffee brands, Lavazza and Carte Noire, have seen value sales grow by more than

12% (see Market Share) and are benefiting from consumers trading up to more premium types

when drinking coffee at home.

Volume sales are stalling, however, reflecting the less frequent consumption of ground coffee and

coffee beans – consumers are more likely to drink these types of coffee on a weekly basis (see

Consumer Usage) – and a scaling back of promotions in the sector. While promotional activity

drives sales – 76% agree with the statement ‘I am more likely to stock up on my favourite brand

when it is on promotion’ (see Consumer Attitudes Towards Coffee), a shift away from discounting

should encourage value growth in the longer term and reduce the risk of devaluing brands

(particularly premium varieties).

Coffee pods perform well

Coffee pods have seen the greatest growth in the sector (albeit from a lower base), with growth of

more than 50% in both value and volume terms, while also managing to steal market share from

instant coffee.

Accounting for just 5% of the market in 2012, however, it would appear that the upfront cost of

coffee pod machines and replacement pods remains a barrier, with coffee pod usage biased

towards the most lucrative users, peaking among 25-34s, ABs and highest earners. These groups

are also more likely to be using coffee pods on a more frequent basis eg at least once a day (see

Consumer Usage section), indicating that for those consumers who can afford the outlay cost of

the machine and replacement pods, this format encourages daily consumption.

More accessible pricing of coffee machines over time should help to broaden the user base, with

last year’s coffee report finding that 22% said they would be tempted to buy a coffee pod machine

if the price came down to below £50 (see Mintel’s Coffee – UK, April 2012).

The entrance of Nespresso-compatible coffee pods by Café Pod (see Who’s Innovating?) and

Dualit should similarly help to encourage more frequent usage among less affluent consumers.

Indeed, the lower level frequency associated with C2DEs (42% use coffee machines only several

times a month – according to Mintel’s Small Kitchen Appliances – UK, December 2012) is

illustrative of the high costs associated with the pods and cartridges that fit capsule machines, and

the fact that instant coffee represents a much cheaper alternative to fresh formats.

Market Share Coffee UK, August 2013


Market Share

Key points

Nestlé leads the coffee market in value and volume terms by manufacturer share, which

reflects the dominance of its Nescafé brand, which holds more than 40% of the market.

Mondelēz is Nestlé’s closest rival in coffee, and although it grew value sales during 2012/13,

it lost value and volume share largely due to its struggling Kenco brand.

Douwe Egberts is the third biggest manufacturer, with value sales rising by almost 9% year-

on-year on the back of NPD such as The Flavour Collective.

Starbucks is the market leader in the burgeoning RTD coffee market, with Emmi’s Caffe

Latte being the only other significant brand of note.

Nestlé is the leading manufacturer in the coffee market

Nestlé represents more than two fifths of value sales in the coffee market and also leads the market

in volume terms, reflecting the dominant position and ongoing success of its Nescafé brand.

Mondelēz is Nestlé’s closest rival in coffee, and although it grew value sales during 2012/13, it

lost value and volume share largely due to its struggling Kenco brand. Mondelēz is continuing to

drive the premiumisation trend, however, launching Carte Noire Instinct (micro-ground) and

adding a Caffeine Free variant to its Kenco Millicano range in 2012.

FIGURE 19: LEADING MANUFACTURERS’ SALES AND SHARES IN THE UK RETAIL COFFEE (EXCL RTD) MARKET, BY VALUE AND

VOLUME, 2011/12 AND 2012/13 2011/12* 2012/13** % change

£m % £m %

Nestlé 427 42 457 43 +7.0 Mondelēz 226 22 230 21 +1.8 Douwe Egberts (DE Master Blenders) 68 7 74 7 +8.8 Other 118 12 142 13 +20.3 Own-label 169 17 168 16 -0.6 Total 1,008 100 1,070 100 +6.2 2011/12* 2012/13** % change m kg % m kg %

Nestlé 22 37 23 38 +4.5 Mondelēz 11 19 10 17 -9.1 Douwe Egberts (DE Master Blenders) 3 5 3 5 - Other 9 15 10 17 +11.1 Own-label 14 24 14 23 - Total 59 100 60 100 1.7

* 52 w/e 28 April 2012 ** 52 w/e 27 April 2013 SOURCE: BASED ON IRI/MINTEL



Nescafé Gold underperforms its other Nescafé stablemates FIGURE 20: LEADING BRANDS’ SALES AND SHARES IN THE UK RETAIL COFFEE (EXCL RTD) MARKET, BY VALUE AND VOLUME, 2011/12 AND 2012/13 2011/12* 2012/13** % change

£m % £m %

Nescafé Original (Nestlé) 175 17 182 17 +4.0 Kenco (Mondelēz) 166 16 164 15 -1.2 Nescafé (Other) (Nestlé) 134 13 159 15 +18.7 Nescafé Gold Blend (Nestlé) 119 12 116 11 -2.5 Douwe Egberts 68 7 74 7 +8.8 Carte Noire (Mondelēz) 45 4 52 5 +15.6 Taylors 35 3 42 4 +20.0 Lavazza 25 2 28 3 +12.0 Other 72 7 85 8 +18.1 Own-label 169 17 168 16 -0.6 Total 1,008 100 1,070 100 +6.2 2011/12* 2012/13** % change m kg % m kg %

Nescafé Original (Nestlé) 8 14 9 15 +12.5 Kenco (Mondelēz) 8 14 7 12 -12.5 Nescafé (Other) (Nestlé) 9 15 10 17 +11.1 Nescafé Gold Blend (Nestlé) 5 8 5 8 - Douwe Egberts 3 5 3 5 - Carte Noire (Mondelēz) 2 3 2 3 - Taylors 3 5 3 5 - Lavazza 2 3 2 3 - Other 5 8 5 8 - Own-label 14 24 14 23 - Total 59 100 60 100 +1.7

* 52 w/e 28 April 2012 ** 52 w/e 27 April 2013 NB: Totals might not equal 100 due to rounding SOURCE: BASED ON IRI/MINTEL

Nescafé Original maintained its position as the leading brand in the UK coffee market, managing

to increase value and volume sales despite increasing competition from more premium formats,

including Nescafé’s own Nescafé Azera wholebean micro-ground instant variant, launched in

March 2012 (included here under Nescafé Other).

Nescafé’s Dolce Gusto coffee pod range has also performed well, benefiting from consumers’

willingness to pay more for premium coffee at home (23% of consumers agree that ‘Coffee pod

machines/pods are worth the cost for the quality you get’).

Kenco, in contrast, has shown a poor performance, seeing value and volume sales decline and

subsequently losing share to Nescafé’s other brands. Its Smooth and Rich products have seen a

decline in sales, although its Kenco Millicano coffee has proven successful, however, benefiting

from consumers justifying the price premium – more than a quarter (27%) of consumers saying

that micro-ground coffee is worth paying more for than instant.



Mondelēz’s other coffee brand, Carte Noire, has seen value sales outpace the wider market (up

15.6%). Carte Noire added Instinct (wholebean instant) to its range in early 2012, also now

available in refill packs and sticks, and supported the launch of Instinct through its Fire &Ice

adverts across TV and cinema in June and July 2013.

Douwe Egberts is now the third biggest manufacturer and fifth biggest brand in the coffee market,

with value sales rising almost 9% year-on-year, benefiting from an image of ‘worth paying more

for’ (see Brand Research).

It added the Flavour Collective to its portfolio in 2012, a range of flavoured freeze dried coffee

that can be served hot or cold over ice. The brand also raised its profile via increased above-the-

line support during 2012, spending £1.1 million on cinema advertising in early 2012, paying

particular emphasis to its 250-year heritage and featuring its Pure Gold product and spending

almost £90,000 on press advertising in support of the Flavour Collective launch.

Starbucks leads the RTD coffee market FIGURE 21: LEADING BRANDS’ PERFORMANCE IN THE UK RETAIL RTD CHILLED COFFEE MARKET, BY VALUE AND VOLUME, 2011/12 AND 2012/13 2011/12* 2012/13** % change

£m % £m %

Starbucks 11 61 17 63 +54.5 Emmi 6 33 8 30 +33.3 Other 1 6 2 7 +100.0 Total 18 100 27 100 +50.0

2011/12* 2012/13** % change

m litres % m litres %

Starbucks 2 67 3 60 +50.0 Emmi 1 33 2 40 +100.0 Other - - - - - Total 3 100 5 100 +66.7

* 52 w/e 26 May 2012 ** 52 w/e 25 May 2013 SOURCE: BASED ON IRI/MINTEL

While still niche valued at an estimated £27 million in 2012, the RTD coffee segment has

benefited from Starbucks’ presence in the category through its licensing partnership with Arla

Foods in the UK. Indeed, 12% of at-home coffee drinkers say coffee made by a coffee shop brand

(such as Costa, Starbucks) would influence their purchase choice (see Consumer – Factors

Influencing Choice).

The coffee shop brand introduced its Discoveries and Doubleshot ranges to the retail market in

2010, which it has continued to expand and increase distribution of, adding a Caramel Macchiato

Flavoured Coffee in late 2012 and a Skinny Latte version in early 2013, both under its Discoveries

range. The brand has, however, reduced above-the-line support since 2010 (see Brand

Communication and Promotion), which could have an adverse effect on raising consumer

awareness of the category.



Emmi’s Caffe Latte is marketed as a freshly brewed iced coffee brand. Emmi added a limited

edition Vanilla Tahiti flavour to its range in 2012, followed by a Caramel New York limited

edition in 2013.

It doubled volume sales and won share from market leader Starbucks during 2012/13, although in

value terms it failed to keep pace with the year-on-year growth seen by Starbucks and the wider

RTD market, suggesting promotional activity has been driving volumes.

Morrisons’ entrance to the chilled RTD coffee market (see Who’s Innovating?) could spell the first

of many new products from own-label players, creating fragmentation in the sector and offering

consumers a greater choice.

Companies and Products Coffee UK, August 2013


Companies and Products

Cafédirect

www.cafedirect.co.uk

Cafédirect is a hot drinks company based in the UK. It was founded by Oxfam, Traidcraft, Equal

Exchange and Twin Trading in 1991 and sells coffee, tea and hot chocolate products.

The company claims to be the largest 100% fair trade hot drinks company in the UK and carries

the tagline ‘Made the Small Way’, highlighting its direct sourcing from smallholder growers.

Product range and innovation

Cafédirect’s coffee range includes:

The Blended Roast & Ground range has five variants: Full, Rich, Medium (the first coffee to carry

the Fairtrade mark in the UK), Organic Medium and Decaffeinated Medium. The Full Roast &

Ground product was introduced in August 2012. A strength 4 coffee, it is made from a blend of

Latin/Central American Arabica beans and African Robusta beans.

Origin is a focus of its Gourmet Roast & Ground and Gourmet Coffee Beans ranges, with these

sourced from specific regions such as Kilimanjaro in Tanzania, Cloud Forests of Nicaragua and

Machu Picchu in Peru. The beans offer a more intense and distinct flavour. An Espresso product,

sourced from Latin America and Africa also features under the Gourmet Roast & Ground range.

The brand’s Freeze Dried instant coffee range is available in three variants: Machu Picchu

Gourmet, Organic Decaffeinated and Medium Roast. As the coffee is freeze dried, its flavour is

said to be better preserved than in other instant coffees, offering superior taste and quality.

All of Cafédirect’s coffee products feature strengths on-pack, ranging from medium (3) to strong (4)

and dark (5).

Recent activity

Cafédirect launched a 14-week, £1 million marketing campaign in May 2013. Using cinema

advertising in over 1,000 independent cinemas across the UK, the brand aimed to widen its

existing premium customer base with a 30-second advert, which highlighted the taste and

smallholder grower sourcing of the brand. This was accompanied by price promotions, sampling

and social media activity.

The company’s hot drinks range (coffee, tea and hot chocolate) was rebranded in 2012. This was

supported by a 30-second video, running on the Guardian Food and Drink network and Facebook

featuring the brand line ‘Made the Small Way’. The film emphasised the company’s strategy of

sourcing directly from smallholder growers, providing a point of difference from other brands on

the market.

http://www.cafedirect.co.uk/



Mondelēz International

www.mondelezinternational.com

Mondelēz International was created in October 2012, following the demerger of Kraft Foods into

two separate businesses. The Kraft Foods Group became a separate entity in the North American

grocery market, while Mondelēz focuses on the global beverage and snacks markets, including a

number of coffee brands; Kenco, Carte Noire, Maxwell House and Tassimo, the hot beverage

machine brand.

Product range

Kenco’s range includes: Premium, 100%, Millicano, Cappuccino, 3in1 and 2in1.

Kenco Premium coffee is made with the finest quality beans and is available in three products:

Rich (more body and rich taste), Smooth (balanced blend with a hint of fruity flavour) and Decaff

(made with a roasted blend of beans). As well as glass jars, these are also available in Eco Refills

packaging.

Kenco 100% is made from single origin beans from four countries in central/south America,

comprising: Brazilian, Costa Rican, Peruvian and Colombian (new in 2013).

Millicano is the brand’s wholebean micro-ground instant coffee that launched in 2011 and is

available as a caffeinated coffee and a Caff Free version. These are packaged in a tin jar but are

also available in Eco Refills packs.

Kenco Cappuccino (Regular and Unsweetened) and Caffé Latte are packaged in a sachet format,

just requiring hot water.

3in1 is a white coffee with sugar and 2in1 is a white coffee (without sugar). Like the Cappuccino

and Latte products, these products are available in sachets and just require the addition of hot

water for immediate consumption.

Carte Noire offers instant and ground coffee. The brand unveiled Instinct, its first wholebean

instant product in February 2012, now also available in refill packs and sticks.

A small range of House of Maxwell instant coffees are sold in UK supermarkets including

Cappuccino, Rich & Full and Café Latte.

Tassimo is the company’s ground coffee range that can be made with Tassimo coffee machines. It

is available in Medium Roast, Colombian and Caffe Crema. To build on this growing market, the

company announced in June 2013 that it would be launching a range of capsules compatible with

Nestlé’s Nespresso machine, initially launching in Austria, France, Germany and Switzerland.

These are to come under the Jacobs and Carte Noire brands.

Recent activity

Mondelēz’s global ‘Coffee Made Happy’ initiative sees the company pledge $200 million to help

1 million farming entrepreneurs in Vietnam, Peru and other important coffee markets by 2020.

Carte Noire supported the launch of its Instinct wholebean range with its Fire & Ice adverts across

TV and cinema in June and July 2013.

http://www.mondelezinternational.com/



An £8 million UK marketing investment for Kenco Millicano was launched in March 2013. As

part of the campaign, a TV ad features actor Rupert Everett reading a bad theatre review that turns

out to be about his own performance. It ends saying “after all, when your coffee’s this good,

nothing else has to be”. Following this, a digital coupon campaign was launched in April 2013 for

the range in a conjunction with Coupons.com, rewarding up to 25,000 customers with a 75p

coupon to go towards Kenco Millicano product. Other supporting marketing activity is to include

outdoor advertising, press and social media throughout the year.

In 2012, £3.2 million was spent on advertising Kenco’s Millicano, the majority of which went

towards a TV campaign featuring the themes ‘Passion’ and ‘Harvest’ which use the tag line ‘each

millicule is special’. There were also separate adverts for the Caffeine Free edition, targeting those

who want to decrease their caffeine intake with the strap line ‘you don’t need to break up with

coffee’.

Douwe Egberts (D.E Master Blenders)

www.douwe-egberts.co.uk

www.demasterblenders1753.com/en

Douwe Egberts was founded in the Netherlands in 1753. The brand became owned by D.E Master

Blenders 1753 following the division of Sara Lee Corporation into D.E Master Blenders 1753 (the

Netherlands-based international coffee and tea company) and the renamed North American

business Hillshire Brands Company.

The JAB Group acquired Douwe Egberts for £6.4 billion in April 2013 as part of the group’s

strategy to become a leading coffee and tea company. The JAB Group had previously owned a

15% stake in Douwe Egberts.

Product range

Douwe Egberts produces Instant, One Cup Filters, Roast & Ground and Senseo coffee products.

There are ten Instant coffees in the range which come in three categories. Instant Pure consists of

Decaff, Gold, Indulgence and Smooth. The Inspirations line is based on countries of origin, with

products including Kenyan Sunset and Brazilian Samba.

The three-strong The Flavour Collective (freeze dried) is available in Vanilla, Hazelnut and

Caramel flavours and was launched in August 2012, targeting younger drinkers and non-coffee

drinkers to the category. An ‘enhancing Chocolate’ variant was added to the range in summer

2013.

The One Cup Filters range is available in Gourmet Blend, Arabica Gold and Reserve Blend. These

claim to be quick and easy to prepare with just hot water and come in packs of four.

The eight-strong Roast & Ground range consists of a Cafetière blend (developed specifically for

use in cafetières), Filter Blend (for use in Filter machines) and six other variants including new

additions in October 2012 such as Time Together (a spice blend with a hint of vanilla and nut) and

Fired Up (rich and intense with spice and chocolate flavours). These range in strength from 3 to 6

and are available in packs of six.

http://www.douwe-egberts.co.uk/

http://www.demasterblenders1753.com/en



The Senseo brand offers mug size pods in six varieties: All Day Blend, Medium Roast, Dark

Roast, Decaffeinated, Moments Morning Americano and Easy Weekend. In September 2012, the

range was extended with a new machine and two new coffee selections: a creamy milk coffee

range comprising Cappuccino, Cappuccino Choco, Café Latte and a three-strong Lungo range of

espresso-inspired blends.

Recent activity

The brand is celebrating its 260th anniversary in 2013 and is running a promotion between April

and August offering the chance to win a VIP trip around Europe (including Paris, Amsterdam,

Rome and Vienna) as well as daily prizes of Kindle Fire HDs (amounting to 260 Kindle Fire HDs

being awarded in total). To enter, participants must purchase a jar or refill pack of Douwe Egberts

Instant Coffee and enter their contact details plus the last four digits of the barcode on the jar on

the competition Facebook page.

Douwe Egberts spent £1.1 million on cinema advertising in 2012. Its cinema commercial focused

on the heritage of the brand, ending with “Douwe Egberts, 250 years in an instant”.

The launch of The Flavour Collective range in August 2012 was intended to expand the brand’s

market and create a new coffee occasion. The pack underwent a redesign with new colours and

fonts in order to stand out from other products in the range. The launch was supported by almost

£90,000 of expenditure on press advertising in 2012.

As part of its 2012 marketing coverage, Douwe Egberts supported the Big Jubilee Lunch, an

annual initiative encouraging people to have lunch with their neighbours which was incorporated

into the Queen’s Diamond Jubilee celebrations in June 2012. The company ran a sampling

programme, giving away up to 900,000 dry samples.

Lavazza UK

www.lavazza-coffee.co.uk

Lavazza Coffee UK is a subsidiary of Luigi Lavazza S.P.A, a family-owned Italian business which

dates back to 1895. Lavazza UK sells a range of capsules, espresso, premium blends and

decaffeinated coffee.

Product range

Lavazza’s range includes Quality Rossa, which is positioned as a versatile blend for Cappuccino,

Latte and Espresso coffees. It is made from 100% Arabica beans making it dark with a more

intense flavour. These are available both ground and as beans to be ground at home.

The company also sells Crema e Gusto which has chocolaty hints, Oro (100% fine Arabica) for

coffee connoisseurs, Decaffeinato, a decaffeinated product and ¡Tierra! which is a blend of Latin

American beans (from Honduras, Colombia and Peru) with a CSR focus on workers, community

and the environment.

Club contains 100% Arabica blend, suitable for brewing in a mocha coffee-pot, while Caffè

Espresso is said to be ideal for espresso and long coffee.

http://www.lavazza-coffee.co.uk/



A Modo Mio capsules are coffee pods made exclusively for the A Modo Mio espresso machines.

These come in nine blends including Appassionatamente, an Arabica coffee from Brazil and Caffè

Crema Lungo Dolcemente, a blend of sweet/flowery Indian Arabica with Brazilian Arabica, which

contains notes of dried fruit.

Recent activity

Lavazza was the official coffee brand of the tennis championship Wimbledon for the third

consecutive year in 2013. Marketing support included underground and digital advertising, which

the brand said was to drive awareness and word of mouth.

Nestlé

www.Nestlé.co.uk

Nestlé is a Swiss multinational nutrition, health and wellness company. It manufactures and

markets a wide range of products that include its coffee brand Nescafé.

Product range

Nescafé offers 32 instant coffee products in the UK under four categories: Everyday, Super Premium

Coffee, Café Menu Coffee and Decaff. These come in strength intensities ranging from 1 (such as the

Nescafé Original sachets) to 10 (such as the Alta Rica collection).

Everyday coffees include nine variants including Original (medium dark roast), Gold Blend

(caramel flavours from a golden roast), Black Gold (stronger and more intense having been dark

roasted) and Green Blend (a mix of unroasted green coffee beans and roasted coffee beans). In

2013, the Gold Blend range added a new product to its portfolio, Gold Crema, which is described

as a smooth and silky drink.

The Super Premium range comprises six variants priced at the premium end of the instant market.

Products include Suraya, a 100% Arabica blend includes Mandheling beans from the Indonesian

highlands of Sumatra giving it a peppered spices aroma. The barista-style Azera range, launched in

2012, was extended with two new flavours in 2013: Cappuccino and Latte, targeting young

professionals who would not normally buy instant coffee.

There are 12 Café Menu Coffees, containing between 8 and 20 sachets, available in four

Cappuccino flavours, five Lattes (including two Vanilla Lattes and an Irish Cream Latte) and three

Mochas.

The Decaff range consists of five variants, Original, Gold Blend, Alta Rica, Cappuccino and

Cappuccino Unsweetened.

Nescafé Dolce Gusto is a 30-strong range of capsules suitable for the Nespresso coffee machine,

available in the following categories: Intense, Cool, Unexpected, Chocolaty, Frothy and Morning.

Recent activity

Nescafé Gold Blend launched a £2.8 million ad campaign in Q1 2013 to drive awareness of its

range, including the new addition Gold Crema. It repeated its 2012 tag line ‘fall in love again’,

whilst introducing Nescafé Gold Cream as a coffee with an even smoother taste. The brand also

featured in outdoor posters on the roadside and at railway stations.

http://www.nestle.co.uk/



A campaign for Nescafé Original was launched on 1 January 2013, involving a new limited edition

pack to increase consumer engagement with the brand. This was Nescafé Original’s first limited

edition label and ran for four weeks across its 100g, 200g and 300g jars. In addition to a TV ad,

Nescafé sponsored the Breakfast Show on Magic FM with Neil Fox. Listeners were able to call in

with their favourite song for the morning with a chance to win prizes.

Nescafé’s Azera brand received £3.2 million worth of advertising in 2012, (followed by additional

investment during 2013). This was focused mainly in TV, but also in outdoor and cinema

channels. The TV ad portrayed a man pretending to go to the coffee shop for a coffee for his

girlfriend when in fact he makes a cup of Azera instant in his kitchen at home.

Coffee shop brands

Costa

www.costa.co.uk

Costa Coffee was launched in the UK in 1971 and is a wholly owned subsidiary of Whitbread. The

coffee shop chain is expanding its range of branded coffee products for home consumption.

Product range

The brand’s ‘At Home’ range offers a medium Roast & Ground coffee, available in bags and tins

and suitable for cafetieres and filters.

The range also includes three variants of capsules for use with a Tassimo machine: Latte,

Americano and Cappuccino.

As well as being sold in Costa Coffee shops, they are also available from all of the major

supermarkets.

Starbucks

www.starbucks.co.uk

Starbucks is an American coffee chain and was launched in the UK in 1998 through its acquisition

of 65 Seattle Coffee Company stores.

Like Costa, it is primarily a coffee shop chain and is increasingly moving into the retail market,

selling packaged, instant and RTD chilled beverages through supermarkets and Starbucks outlets.

Product range and innovation

Starbucks offers a range of ground coffees to be drunk at home, including Blonde, Medium and

Dark Roast Coffees.

Starbucks Reserve Coffee offers a limited supply of the best quality beans from small farms in

specific districts. Varieties focus on the coffee’s provenance and include: West Java Indonesia,

Isla Flores Indonesia, Guatemala Finca Medina and Cameroon Mt Oku.

http://www.costa.co.uk/

http://www.starbucks.co.uk/



VIA is a premium instant micro-ground coffee sold in single-serve sachets. These are available in

flavours such as Colombian, Italian Roast (both also sold in a tin), Decaf Italian Roast, Veranda

and Tribute (a multi-region blend from four coffee-growing regions).

Verismo Pods are designed specifically for single cup use with the new Verismo System, which

was launched in September 2012. They come in seven flavours such as Caffè Verona Filter Coffee

Pods and Guatemala Antigua Espresso Pods. Each pack contains 12 pods. There is also a Caramel

Macchiato Kit and a Vanilla Latte Kit, each containing six coffee pods and six milk pods.

The brand launched its Discoveries and Doubleshot chilled coffees with Arla Foods in 2010.

Products include Discoveries Seattle Latte (available with a straw and suitable for on-the-go

drinking) and Doubleshot Espresso, in a 200ml can format. Starbucks added a Caramel Macchiato

Flavoured Coffee in late 2012 and a Skinny Latte version in early 2013, both under its Discoveries

range.

A range of chilled/iced coffees are also available, such as Starbucks Frappucino Mocha and

Starbucks Vanilla Frappucino.

Brand Research Coffee UK, August 2013


Brand Research

Brand map

The Mintel Brand Research Map below illustrates a three-dimensional brandscape based on:

Differentiation: an indication of vitality and profitability. Taken from consumer perceptions of a

brand’s standout from others in its competitive sphere.

Trust: an indication of brand integrity and stature. Derived from agreement with the statement ‘a

brand that I trust’.

Experience: consumers who have ever used/visited/bought the brand, an indication of presence in

the category.

This map gives a snapshot of the current strength and quality of selected brands, where they are in

their growth and how healthy they are.

FIGURE 22: ATTITUDES TOWARDS AND USAGE OF BRANDS IN THE COFFEE SECTOR, MAY 2013 Base: internet users aged 16+ who have heard of the brand and expressed a view

Bubble size represents usage (% ever used) SOURCE: GMI/MINTEL



Nespresso trails the other brands in terms of trust, something likely to be influenced by its relatively

new arrival within the mainstream market. Nespresso, which is only present through its coffee pod

capsules, sold via the brand’s website or stores, is no more differentiated than other brands despite its

obvious difference in formats compared to standard instant coffee. This is perhaps because of other

brands developing coffee pods to be used with coffee machines, for example Nescafé’s Dolce Gusto

and Kraft’s Tassimo which offers pod varieties of Kenco and Carte Noire. It is, however, the only

brand more trusted by under-35s because of this different approach, while 25-44s are most likely to

consider it as standing out.

The brands in this market are generally within a narrow range of differentiation, suggesting that no

brand is currently enjoying an advantage over another. The most obvious advantage is Nescafé’s

additional trust level, increased by accessibility, value and long term marketing strategies. This trust is

driven by women between 45 and 54.

Although their lead is minimal, Carte Noire and Douwe Egberts, two brands with more premium

ranges edge out ahead of other brands in terms of perceived differentiation, with over-35s more likely

to sense that they stand out from the rest.

Correspondence analysis

In order to display brand images (and/or consumer attitudes towards brands) related to each brand

covered in this survey in a joint space that is easy to understand, Mintel has conducted correspondence

analyses. Correspondence analysis is a statistical visualisation method for picturing the associations

between rows (image, attitudes) and columns (brands) of a two-way contingency table. The

significance of the relationship between a brand and its associated image is measured using the Chi-

square test. If two brands have similar response patterns regarding their perceived images/attitudes,

they are assigned similar scores on underlying dimensions and will then be displayed close to each

other in the perceptual map.



Brand attitudes FIGURE 23: ATTITUDES, BY COFFEE BRAND, MAY 2013 Base: internet users aged 16+ who have heard of the brand and expressed a view

This chart shows the level of association of each brand surveyed with a set of key performance attributes core to coffee brands overall. The more significant an attribute is as part of a brand’s image relative to other attributes, the nearer it will be to that attribute. If a brand is between a number of attributes, it is reasonably closely associated with each of these. SOURCE: GMI/MINTEL

Nespresso has a strong image of being innovative. While other brands do engage in new product

development, Nespresso earned this image through development of its coffee machines and pod

format, intended to bring the coffee shop experience into the home. Rural consumers are especially

likely to consider it as an innovative brand, perhaps through lower exposure to this kind of product.

ABs are also more likely to consider the brand in that way, perhaps due to the financial capability to

look seriously into this area.

Nescafé’s image gives an indication as to why it is the most used brand, with value and trust the main

connotations that the Nescafé name brings forth. The image of Nescafé’s value increases by age, while

the North West is the most likely region to note its value, indicating that the brand’s message is clearly

pushed through to consumers.

Carte Noire and Douwe Egberts have the closest link to quality, alongside an image of worth paying

more for. This more niche image means that the brands are not as likely to generate high usage levels,

but are likely to be choices for the more discerning coffee drinker. ABs are more likely to note Carte

Noire’s quality and consider it worth paying for, while Douwe Egberts has a more consistent image

across socio-economic groups.



Brand personality FIGURE 24: COFFEE BRAND PERSONALITY – MACRO IMAGE, MAY 2013 Base: internet users aged 16+ who have heard of the brand and expressed a view

This chart shows all coffee brands in relation to a set of broad image attributes applicable to all categories. SOURCE: GMI/MINTEL

Despite high usage levels, Nescafé has a closer association to negative terms such as tired and boring.

This is perhaps a result of its dominance, with people very aware of products like Gold Blend and

Original and what they offer. The very accessible nature of Nescafé, helped by its value image, means

that there is little mystique left. This is evident in that consumers over the age of 55, those most

exposed to Nescafé, are especially likely to consider it in negative terms. The drive behind Nescafé’s

more premium Azera product may help to turn this image around and into something more engaging.

Kenco’s drive behind its Millicano product has helped to produce more positive macro terms than

Nescafé, pushing it closer to the vibrancy and engaging image of the lesser used more premium and

sophisticated coffees brands. The 35-54s are most likely to consider Kenco in positive terms,

compared to Douwe Egberts and Carte Noire’s stronger image among 25-44s. Again Douwe Egberts

has a slightly stronger positive image among C2DEs compared to Carte Noire’s stronger scores among

ABC1s.

Nespresso has an association with exclusivity, driven by higher prices and its associations with coffee

machines. Again this image is stronger among ABC1s and rural dwellers.



FIGURE 25: COFFEE BRAND PERSONALITY – MICRO IMAGE, MAY 2013 Base: internet users aged 16+ who have heard of the brand and expressed a view

This chart complements the wider brand image display, using a set of image traits specific to the coffee sector. SOURCE: GMI/MINTEL

Kenco and Nescafé have the greatest image of tradition and reassurance. This comes from an

accessible image which has enabled the brands to become ensconced in the public’s consciousness. As

the two most used brands, they have connotations with comfort. Both find a more reassuring image

among 45-54s, suggesting this group could be targeted with a focus on reliability.

Nespresso has the most creative and cool image of the brands. It is new and exciting, based around a

different product format in the shape of pods and coffee machines. Sleek advertising featuring

Hollywood star George Clooney has helped to promote this image, although the higher expectations

and prices set by a more innovative image leads to a closer association of being overrated, especially

by older consumers.

Carte Noire’s French origin gives off an image of sophistication, assisted by dark stylish packaging

and advertising. Women over 55 and consumers living in the North West are most likely to think this.

Douwe Egberts sits somewhere between the sophistication of Carte Noire and the more used and

functional Kenco and Nescafé, something which is reflected in its usage level. Like with most other

brands, over-35s tend to have a strong image of it, with only Nespresso finding a more youthful

support group.



Brand experience FIGURE 26: COFFEE BRAND USAGE, MAY 2013 Base: 2,018 internet users aged 16+

* usage = % ever used SOURCE: GMI/MINTEL

The length of time these brands have spent on the market is evident through usage levels. Nespresso is

the youngest of the brands, and consequently has a slightly younger user base, with 25-34s having

used it most. Usage of these brands is still dominated by older generations (in the past year), except for

Nespresso and Carte Noire, suggesting that certain younger consumers are looking for something more

stylish in their coffee drinking and are more open to different formats of drinking.

Nescafé and Kenco have a greater C2DE bias, possibly because of their greater accessibility and

number of products which cater for a wide group. Douwe Egberts tends to find an even split between

ABC1s and C2DEs, while the greater sophistication and style of Nespresso and Carte Noire looks to

encourage ABC1s to drink them more than C2DEs.

Nespresso requires a greater financial investment due to the necessity of the machine, and looks to

recreate a coffee shop experience more than other instant coffee brands. Perhaps because of the

association with coffee shops, Nespresso’s usage level is higher in London and other inner city and

town areas where the prevalence of these venues is greater.



FIGURE 27: SATISFACTION WITH VARIOUS COFFEE BRANDS, MAY 2013 Base: internet users aged 16+ who have ever used the brand

SOURCE: GMI/MINTEL

Expectations that are raised by Nespresso’s higher price and premium, coffee shop-style positioning

affect satisfaction levels. Consumers appear to expect more than it delivers, although actual negative

experiences are not much greater than other brands. Women are far more likely than men to display

enthusiasm towards Nespresso, as are 16-34s. While ABC1s are more likely to consider their

experience of Nespresso as positive in general; C2DEs are more likely to express an excellent one. All

other brands find C2DEs as more supportive in general, so Nespresso is something of an exception.

Despite Nescafé earning the lower amount of overall positive endorsements, it has the joint highest

number of excellent endorsements alongside Douwe Egberts. There is a clear level of satisfaction from

fans of the brand, but others who have drunk it find that it simply meets expectations. Despite being

drunk more by older consumers in all cases except Nespresso, Kenco is the only brand to find more

positive endorsements from consumers over 35.

Carte Noire and Douwe Egberts achieve greater levels of overall satisfaction due to their high

association with quality, but Douwe Egberts generates a greater level of enthusiasm among its

consumer base, suggesting that its products go that bit further in satisfying needs. The main difference

is the support among 25-34s, who are more likely to consider Douwe Egberts as an excellent

experience than they are any other brand.



FIGURE 28: CONSIDERATION OF COFFEE BRANDS, MAY 2013 Base: internet users aged 16+ who have heard of the brand and expressed a view

SOURCE: GMI/MINTEL

Nescafé earns the greatest amount of commitment, despite not standing out any more than the average.

It is however the most trusted, suggesting that trust and reassurance is a key indicator towards usage,

especially for consumers between 35 and 54. People often rely on coffee to start their day, or keep it

going, so they want to be able to rely on their brand of choice. Indeed, the order of commitment

follows the order in which consumers place trust in a brand.

Nespresso’s different format and more expensive proposition means that consumers are the least likely

to actively seek it out. However, when looking at the amount of absolute avoidance, it is not too much

higher than other, more popular brands. This suggests that coffee drinkers are unlikely to completely

discount it, and may be open to an increase in the level of sophistication that the brand offers.

There tends to be little socio-economic difference in intention towards brands, although ABC1s are

more inclined to show commitment towards the more premium Douwe Egberts and Carte Noire.

Kenco is the only brand to gain more commitment from rural dwellers, while Nescafé, Kenco and

Douwe Egberts find their most supportive areas in the North West.



FIGURE 29: CONSUMER PERCEPTIONS OF CURRENT COFFEE BRAND PERFORMANCE, MAY 2013 Base: internet users aged 16+ who have heard of the brand and expressed a view

SOURCE: GMI/MINTEL

Brands in this market all have a consistent level of momentum, with only slight variances in

perceptions. While some brands, like Nescafé, spend more on advertising than other brands, all are

active in the market.

Nespresso has invested in prominent advertising featuring popular actor George Clooney in the past,

although this association is to end in 2013, with rumours of Penelope Cruz taking over. This

association with glamour and sophistication over previous years has helped to encourage a dynamic

image that is perhaps out of place with its current level of awareness, usage and satisfaction. It also

benefits from the dynamic image that the coffee machine market currently experiences. Nespresso’s

forward movement is most appreciated by ABC1 households, perhaps as they have more exposure to

it.

Nescafé is the only brand to see an even amount of perceived dynamism from men and women, with

all other brands finding women more likely to sense forward momentum. It is also the only brand to

find strong support from under-25s, again hinting at Nescafé’s accessibility.



FIGURE 30: COFFEE BRAND RECOMMENDATION – NET PROMOTER SCORE, MAY 2013 Base: internet users aged 16+ who have ever used the brand

Green: % net positive promotion Red: % net negative detraction SOURCE: GMI/MINTEL

Mintel identified three groups of customers, based on the likelihood to recommend a brand to

colleagues or friends, measured on a scale from 0-10 with 0 ‘not at all likely’ and 10 ‘extremely

likely’.

Promoters (9-10): Loyal enthusiasts who will keep buying and refer others, fuelling growth.

Passives (7-8): Satisfied but unenthusiastic customers who are vulnerable to competitive offerings.

Detractors (0-6): Unhappy customers who can damage your brand and impede growth through

negative word of mouth.

The Net Promoter Score (NPS) is based on a netting of positive ‘promotion’ against negative

‘detraction’. This results in a net positive or negative percentage.

Despite different approaches by brands, the variance in promotion is not that dissimilar. This is the

same situation with the level of perceived differentiation in the market, suggesting that consumers

struggle to note outstanding features of brands.

Three brands manage to gain net promotion, including the two brands most associated with quality,

perhaps suggesting that there is an element of prestige in brand recommendation. The other brand

which gains net promotion is Nescafé, a brand with high usage, high levels of enthusiasm and an

association with value. In each case, there are clear reasons for brands to promote it, whether based on

quality or value. Each brand looked at sees more promotion from C2DEs than ABC1s, with Carte

Noire the only brand to gain net promotion from ABC1s.



Nespresso’s higher price and strong premium positioning means that its consumers are slightly more

likely to detract from it than promote it, influenced by a detracting 35 and over group. It is also the

only brand to see detraction from women.

Kenco’s positioning, which straddles between the line between quality and accessibility, means that

consumers struggle to find as many reasons to promote it, although 35-44s are strongly likely to

promote it, and C2DEs are also positive towards it.

Brand index

The Mintel brand index gives an overview of a brand’s standing relative to others in its own category

or outside. A brand scoring 100 on the index would have 100% penetration, be universally seen as

unique, score universally on all attributes and be top-rated for all relevant scaled brand aspects. A

brand scoring zero on the index would be completely unknown.

FIGURE 31: COFFEE BRAND INDEX, MAY 2013 Base: internet users aged 16+ who have heard of the brand and expressed a view

SOURCE: GMI/MINTEL



FIGURE 32: COFFEE BRAND INDEX VS. RECOMMENDATION, MAY 2013 Base: internet users aged 16+ who have ever used the brand


Nespresso lags some way behind other brands on brand index. The brand is considered innovative, but

the higher costs involved and failure to totally justify this cost means it needs to focus on making its

customers happier. This is turn will improve recommendation and then commitment.

Kenco tends to bridge the gap between premium positioned coffees and more accessible ones,

something that looks to confuse customers slightly. It has the second highest brand index due to

consistent scores, but fails to gain net promotion due to more mixed messages. Further promotion of

its Millicano range may push forth a more premium positioning and move it close to the likes of Carte

Noire and Douwe Egberts.

These two brands look to have cornered different parts of the discerning drinker market, with Carte

Noire’s more sophisticated offering attracting ABC1s, while Douwe Egberts has stronger support

among C2DEs, perhaps because of a lower level of perceived sophistication widening its appeal.

Nescafé’s loyal following means that it is protected from competitors, despite gaining the lowest

number of overall positive endorsements. The definitive value element and accessibility means that

consumers have clearer criteria on which to judge it, and more reason for people to align themselves

with it.



Target group analysis

Mintel’s brand target groups are based on psychographic analysis highlighting different attitudinal and

personality traits between people, informing their interactions with and motivations towards brands

and brand purchase.

Through varying combinations of these traits and the importance survey respondents place on them,

Mintel allocates them to one of five groups, although there are some common traits between them.

The five groups are illustrated here in relation to Mintel’s coffee research sample, together with the

brands they are most likely to buy, shopping habits and the attitudes they have towards individual

brands.

FIGURE 33: TARGET GROUPS, MAY 2013 Base: 2,018 internet users aged 16+

SOURCE: GMI/MINTEL



FIGURE 34: COFFEE BRAND USAGE, BY TARGET GROUPS, MAY 2013 Base: 2,018 internet users aged 16+


Group One – Conformists

Conformists are the most brand-loyal of all groups and are primarily driven by a desire to fit in with

others. They seek reassurance from others ahead of making a purchase, and will as such think carefully

about buying something beforehand rather than buying impulsively. However, they are the least

concerned about quality and premium products and brands.

Conformists are strictly mass market; they prefer popular brands and are liable to say such brands

make them feel confident or express their personality. Personal emotional benefits are important to

them, reflecting their concern over fitting in with others and feeling part of the crowd. In line with this,

they are among the most likely to agree that they buy brands they know their friends would approve of

and to feel that owning fashionable brands makes them attractive.

The Conformists group is swayed towards women, particularly women under 35, although men aged

55 and over have strong representation as well. This group has the greatest proportion of C1s, with a

higher than average amount coming from the South East and East Anglia. Conformists appear to be

unengaged in this market with a lower level of usage across all brands. This is influenced by the age of

the group, which is under engaged in the market in general, and therefore do not see any of these

brands as providing the comfort that Conformists enjoy.



Group Two – Simply the Best

This group is by far the most concerned about quality and premium goods, but like Conformists are

worried about their image and status. They are least likely to worry about price, product range or offers

and, while no more impulsive than average, they are arguably more likely to buy something ‘with

confidence’ when they see it.

However, they are most likely to be early adopters and adventurous in their brand and product choices,

and their status motivations are therefore more likely to be driven by projections of prestige rather than

fitting in with others – they are among the least likely to ask opinions of friends and family.

The Simply the Best group has a greater than average proportion of men in it, especially ones aged

between 35 and 44. The most prominent feature of this group is the high number of consumers coming

from AB households, while it is also a group that comprises a higher than average number of

Londoners. Simply the Bests’ tendency to be among early adopters means that Nespresso has a higher

level of usage than average. This is a pattern true across all brands, with the financial freedom

allowing this group to purchase in a more carefree manner.

Group Three – Shelf Stalkers

Shelf Stalkers are the anxious shoppers of the batch and are characterised by the propensity to consider

every facet of a purchase and the products available before committing to buy. Quality matters to them

and they are among the least likely to be impulse shoppers.

They are internally motivated, making their own minds up on whatever criteria they need to consider,

and while slightly more likely to be individualistic than others on this basis, they will to some extent

consult others before purchasing – an additional source of information to consider, although ultimately

they will make their own minds up.

This group is the oldest of them all, with 55% over the age of 45. The group has an even gender split,

and has the highest proportion of consumers living outside town and city centres. This group tends to

have high usage in this market, a result of greater exposure to these brands and being greater drinkers

of coffee in general. Nespresso is the only brand which finds lower than average usage in this group.

This older group is unlikely to want to commit to paying a premium for a machine and replacement

coffee capsules when cheaper options are available. The Shelf Stalkers group is more likely to be

prepared to pay for a brand where they know what benefits can be provided, meaning that older brands

have a higher level of usage than younger ones.

Group Four – Habitual Shoppers

Habitual Shoppers are characterised primarily by sticking to what they know, although within that

parameter they are relatively carefree and will buy products on impulse. Like Simply the Best

consumers, they are unconcerned with price and bargain shopping, although conversely they are no

more than averagely likely to be attracted to premium goods.

Interestingly and against their habitual characteristics, they do not consider themselves brand-loyal.

This indicates that they are more likely to buy ‘replacement’ products.



This group is the most biased group towards men, with a significantly higher proportion than average

aged under 35. This is another group that has a high proportion of London and other city and town

centre dwellers. Habitual Shoppers also fall into lower levels of overall usage because of their age;

however, their strong urban location means that Nespresso has a higher level of usage. This group is

more likely to visit coffee shops and therefore have a greater desire to replicate it in their own home.

This group shows off its habitual nature with more regular usage of these brands than the average

despite having lower than average usage overall.

Group Five – Individualists

Individualists are a smaller group representing the quirky, more bohemian end of the spectrum.

Conformism is anathema to these consumers and they are by far the most likely to be driven by doing

their own thing and standing out. They will buy based solely on their own wants without consulting

others, but at the same time they like to be admired for their choices and their style.

These are the least habitual shoppers and will branch out to try new things, typically acting

impulsively. Quality and brand loyalty are of low importance to them, but Individualists are at the

same time most likely to take into account product ranges, price and promotions – they are bargain

hunters.

This group has the largest proportion of women, with 35-54s especially well represented. This group

likes to experiment and shop around, perhaps indicating why brands aside from Nespresso earn at least

average usage. Nespresso projects an image of prestige, something that is not necessarily enticing to

Individualists, while the additional cost involved will also deter these bargain hunters. Nescafé only

gains average usage, indicating that this group is not as comfortable simply choosing the most well-

known brand.

Brand Communication and Promotion Coffee UK, August 2013


Brand Communication and Promotion

Key points

Total adspend in the coffee market increased by 18% between 2010 and 2012 to reach £20.7

million, £1 million below the amount spent by advertisers in the tea market, which has a

stronger adpsend to sales ratio.

Nestlé and Mondelēz remain the leading advertisers, accounting for 80% of expenditure over

2010-12 and reflecting their lead in the overall coffee market. The bulk of spend has gone

towards supporting the Nescafé Azera (Nestlé) and Kenco Millicano (Mondelēz) products

Television remained the principal media outlet in 2012, although expenditure on outdoor

advertising has risen significantly.

Total adspend on coffee rises in 2012

Above-the-line advertising spend in the total coffee market rose by 18% over 2010-12, with

expenditure reaching £20.7 million in 2012.

This is £1 million less than the amount spent by advertisers in the tea market, which has a higher

adspend to sales ratio of 3.2% in 2012, compared to around 2% in coffee. At around 0.5%, the

adspend to sales ratio for the fruit juice, juice drinks and smoothie market is much lower,

reflecting the share of own-label in this sector. This highlights the importance of above-the-line

support in keeping the coffee category front of mind with the consumer, especially in relation to

competing categories.

FIGURE 35: ABOVE-THE-LINE MEDIA ADVERTISING SPEND FOR THE TOTAL COFFEE MARKET (INC ICED COFFEE), 2010-13

* until May 2013 SOURCE: NIELSEN MEDIA RESEARCH/MINTEL

The bulk of advertising expenditure is spent on instant coffee (see Appendix), with almost 80p in

every £1 spent in 2012 being spent on this sector, reflecting its overall dominance in the coffee

market.



Coffee pods received £2.5 million above-the-line investment in 2012 and more than £1 million in

the first five months of 2013, while filtered/ground coffee saw an increase of more than 150% in

adspend to £1.9 million in 2012. This indicates that manufacturers are focusing on expanding

awareness of more premium formats through increasing above-the-line support.

Nestlé invests over half of category adspend to protect its market leadership FIGURE 36: ABOVE-THE-LINE MEDIA ADVERTISING SPEND ON COFFEE, BY ADVERTISER, 2010-13 Advertiser 2010 2011 2012 2013*

£000 £000 £000 £000

Nestlé 7,856 7,221 11,370 5,708 Mondelēz 5,187 5,946 5,953 2,657 Douwe Egberts 2,033 2,197 1,432 255 Wm Morrison 272 313 881 629 Taylors of Harrogate 196 63 454 188 Co-operative Food 236 36 81 109 Lavazza Coffee 13 310 26 5 Starbucks 991 18 23 13 Cafédirect 17 168 22 3 Tesco 208 17 - - Other 261 216 287 159 Total 17,270 16,506 20,530 9,726

* until May 2013 SOURCE: NIELSEN MEDIA RESEARCH/MINTEL

The majority of investment in the take-home coffee market continues to come from both Nestlé

and Mondelēz, together contributing over four fifths of the overall coffee adspend between 2010

and 2013 (to May).

Nestlé increased its adspend by almost 60% over 2011-12. Campaigns included significant

investment on its Azera micro-ground instant brand (discussed below) and TV ads to accompany

the release of a limited edition Nescafé Original pack, which launched in December 2012.



FIGURE 37: ABOVE-THE-LINE MEDIA ADVERTISING SPEND ON COFFEE, BY TOP FIVE BRANDS, 2012

SOURCE: NIELSEN MEDIA RESEARCH/MINTEL

Azera received 16% of total spend in 2012, with Nestlé spending £3.2 million on TV, outdoor and

cinema activity to promote the brand. The TV ad portrayed a man pretending to go to the coffee

shop for a coffee for his girlfriend when in fact he makes a cup of Azera in his kitchen. The ad

features the strapline ‘instant barista-style coffee’.

Nestlé has continued to focus on Nescafé Azera in 2013, spending £1.4 million on promoting the

brand, while also spending more than £1.4 million on its Nescafé Gold Blend product. The latter

featured in a TV and outdoor ad campaign through February and March 2013, promoting the Gold

Blend range and new product Nescafé Gold Crema, pitched as a smoother coffee.

Mondelēz remains second highest advertiser, focusing on Kenco Millicano

Mondelēz has remained consistently the second highest advertiser, accounting for almost 30% of

spend. The company focused on its Kenco Millicano brand in 2012, spending £3.2 million

(representing 16% of overall category spend) on a series of TV ads including ‘Passion’ and

‘Harvest’ which use the tag line ‘each millicule is special’. This activity is set to continue into

2013, with an £8 million UK marketing investment for unveiled in March 2013. A TV campaign

featured actor Rupert Everett reading a bad theatre review that turns out to be about his own

performance. It ends saying “after all, when your coffee’s this good, nothing else has to be”. Other

supporting marketing activity is to include outdoor advertising, press and social media throughout

the year.

Mondelēz has also stepped up expenditure on its Carte Noire Instinct range of wholebean instant

coffee, launching its Fire & Ice push on the small and big screens in summer 2013.



Douwe Egberts, although lagging quite significantly behind the two advertising leaders and

reducing its adspend during 2012/13, is the category’s third highest investor, having dedicated

£1.4 million to advertising throughout the year. The bulk of this was spent on cinema advertising

for its core coffee range, with an emphasis on the brand’s 250-year heritage, the voiceover saying

‘250 years, in an instant’. Almost £90,000 was spent on print advertising for its Flavour Collective

range of flavoured instant coffees, which launched in summer 2012 and targets younger

consumers.

TV spend falls in 2012, while outdoor and cinema gets a boost FIGURE 38: ABOVE-THE-LINE MEDIA ADVERTISING SPEND ON COFFEE, BY MEDIA TYPE, 2010-13* 2010 2011 2012 2013

£000 £000 £000 £000

TV 11,035 10,673 10,024 6,734 Outdoor 21 2,591 4,756 1,211 Press 3,537 1,634 2,292 711 Cinema 1,038 183 1,693 - Radio 332 414 955 1,065 Direct mail 724 546 726 - Internet 558 450 84 6 Door drops 26 15 - - Total 17,270 16,506 20,530 9,726

*until May 2013 SOURCE: NIELSEN MEDIA RESEARCH/MINTEL

While television remained the most prevalent form of advertising in 2012, accounting for 49% of

total adspend, expenditure on the medium actually fell by 6.1% between 2011 and 2012.

Expenditure on outdoor advertising saw the biggest rise over 2010-12. More than £500,000 was

spent on this channel in support of Nescafé’s Azera brand in 2012, forming part of its £2.3 million

campaign, while Mondelēz spent over £400,000 on outdoor advertising for its Kenco Millicano

brand. Nescafé spent almost £1.4 million on outdoor activity for its Nescafé Gold Blend product,

with the tag line ‘fall in love again’.

Cinema advertising also received a boost, with £1.7 million being spent on this medium. Douwe

Egberts alone spent £1.1 million on cinema advertising campaign in 2012, with advertising on the

brand’s Pure Gold product emphasising the 250+-year heritage of the brand.

Channels to Market Coffee UK, August 2013


Channels to Market

Key points

Reflecting their lead in the overall grocery sector, major supermarkets dominate distribution

in the coffee market.

The nature of coffee as a cupboard staple facilitates planned and bulk purchases as part of

the weekly shop.

Specialist stores hold a minimal share in the overall soft drinks market.

Supermarkets dominate distribution FIGURE 39: UK RETAIL SALES OF COFFEE, BY TYPE OF OUTLET, 2010-12 2010 2011 2012 % change

£m % £m % £m % 2010-12

Supermarkets and hypermarkets 594 67 646 67 696 66 +17.2 Convenience retailers* 222 25 241 25 274 26 +23.4 Specialists 71 8 77 8 84 8 +18.3 Total 886 100 964 100 1,055 100 19.1

* the c-store operations of Sainsbury’s and Tesco are included in convenience stores. M&S Food and Co-operative Food are included in convenience stores SOURCE: MINTEL

The nature of coffee as a cupboard staple and long-life product facilitates planned and bulk

purchases as part of the supermarket shop.

Accordingly, the major supermarkets dominate as a grocery shopping destination, their strong

position in coffee mirroring their lead in the overall grocery sector, benefiting from their

economies of scale in offering competitive prices on brands as well as a price-led own-brand

offering and the physical size of the stores facilitating a comprehensive range.

The c-store sector has seen growth of almost 24% between 2010 and 2012, reflecting the

expansion by the major grocers in this channel, now including Morrisons, Waitrose and Asda. This

should help to further support growth in this channel going forward.

Specialist stores hold a small share in the coffee market and are facing further attrition as the

supermarkets improve their offering. The onus is therefore on specialist stores to emphasise their

knowledge in the competitive market.

Consumer – Usage Coffee UK, August 2013


Consumer – Usage

Key points

Coffee is a mature market, with more than eight in ten adults drinking coffee, and three in

five doing so at least once a day.

Instant coffee boasts the highest penetration (73%), with almost half of consumers drinking

it on a daily basis – an unassailable lead on all other types of coffee. Fresh coffee is also

drunk by the majority (56%), signalling the latent demand for quality products.

Coffee pods and micro-ground instant coffee share a similar user profile with penetration

peaking among the 25-34s, ABs and highest earners. This highlights the importance placed

on balancing convenience and quality.

Engagement with coffee and frequency of consumption increases in line with age, with 16-

24s showing below-average consumption and being less likely to drink it ‘at least once a day’.

Almost half drink three types of coffee or less, with around a fifth drinking just one type,

indicating that consumers are relatively habitual in their tastes. Men and the 25-34s are

more likely to drink a large variety of 6-9 types, offering an audience to target through

newer formats.

More than eight in ten adults drink coffee

Mintel commissioned consumer research for this report to assess usage of and attitudes towards coffee.

Research was carried out by GMI among 2,000 internet users aged 16+ in June 2013. Detailed

demographics are given in the Appendix.



To assess consumer usage of coffee, respondents were asked:

“Which of these types of coffee, if any, have you drunk at home in the past six months? Select all that apply.”

FIGURE 40: CONSUMPTION OF COFFEE AT HOME, JUNE 2013 Base: 2,000 internet users aged 16+

* any instant coffee (net of instant coffee, instant cappuccinos/lattes and whole bean or micro-ground instant) ** fresh coffee drinkers (net of ground coffee or coffee ‘made using whole beans that I grind at home’ or coffee pods) SOURCE: GMI/MINTEL

A mature market, more than eight in ten consumers drink coffee, with three in five doing so at

least once a day.

Standard instant coffee boasts the highest penetration (73%), although the fact that more than half

the nation has now drunk fresh coffee at home highlights how discerning UK consumers have

become and the potential for further development in the market in the longer term.

The convenience offered by standard instant is its main selling point and driver to everyday

consumption (see below), but it would seem that exposure to fresh coffee when out of home is

having an effect on at home usage.

“At home I drink instant because of the convenience. Out of home I like fresh ground.”

– 55+ C2DE male



Wholebean micro-ground instant coffee, drunk by three in ten consumers, appears to have

succeeded in positioning itself as the in-between product –delivering on the quality of fresh and

the convenience of instant, with 21% of consumers saying they notice a difference in quality

between standard and micro-ground and 27% agreeing that micro-ground coffee is worth paying

more for than regular instant, offering a tangible means for adding value to the market.

Almost a quarter (24%) of consumers drink chilled RTD coffee, with penetration peaking among

16-24s (39%). While still niche, the segment has benefited from Starbucks’ presence in the

category (see Market Share) through its licensing partnership with Arla Foods in the UK. The

coffee shop brand introduced its Discoveries and Doubleshot ranges to the retail market in 2010

and has continued to expand these ranges and increase distribution since then, adding a Caramel

Macchiato Flavoured Coffee in late 2012 and a Skinny Latte version in early 2013, both under its

Discoveries range.

Key analysis: An emphasis on how RTD coffee delivers on refreshment and functionality (eg

providing a caffeine hit) should help the coffee market to compete with products such as soft drinks

such as fruit juice and energy drinks, particularly among younger consumers, who are more likely

to say that coffee provides an energy boost.

The market is also likely to have benefited from the warm weather that the UK has experienced in

early summer 2013, the cold weather having previously been a barrier to uptake, in comparison to

other European countries.

Potential for decaffeinated coffee to grow usage throughout the day

Decaffeinated coffee, drunk by three in ten consumers, especially under-35s, those living in

London and ABs (see Appendix), offers the coffee market a means to extend coffee drinking

occasions throughout the day. There is marked potential to expand usage beyond first thing in the

morning or when having a break to during the afternoon/evening without affecting sleep patterns:

“I tend to drink normal coffee in the morning and switch to decaf in the afternoon although I

drink more tea from lunchtime onwards.”

– 35-44-year-old ABC1 woman

“I try not to have coffee too late in the day so it doesn’t affect my sleeping [habits].”

– 35-44-year-old C2DE woman

“I drink most of my coffee in the morning to perk me up. I generally try to limit coffee after this

time to maybe one cup in the early afternoon. Otherwise, I am worried the caffeine may affect

my ability to get to sleep.”

– 25-34-year-old C2DE female

Three in five drink coffee at least once a day

Overall, three in five consumers drink coffee ‘at least once a day’. These daily users are a very

powerful group, substantially driving volume sales.

Half of consumers agree that ‘coffee is a good way to start the day’, while a quarter agree that they

always drink coffee ‘when having a break’ (see Consumer – Drivers to Drinking Coffee section),

highlighting opportunities to promote the ritual of coffee drinking and hence drive more frequent

consumption.



Standard is by far the everyday choice, with almost half (47%) drinking it at least once a day.

FIGURE 41: CONSUMPTION OF COFFEE, BY FREQUENCY, JUNE 2013 Base: 2,000 internet users aged 16+

SOURCE: GMI/MINTEL

There is scope, however, to get people to upgrade from instant more often. Weekly consumption is

the most popular frequency for all other formats; this implies that while standard instant is the

everyday option, other formats are more of a weekly treat or something that they drink at the

weekend/on special occasions, or offer to visitors.

As the majority (56%) of consumers drink fresh coffee, this means that they should already have

the facilities to prepare fresh coffee at home.

Key analysis: Encouraging consumers to drink fresher formats more frequently, ie as an everyday

treat, either through marketing campaigns that push the emotional connection of having time out

and treating oneself to small luxuries such as savouring the aroma and taste of freshly made coffee,

would help to encourage consumers to trade up on a more frequent basis, thus adding value to the

market.

Usage increases in line with age

Consumption of coffee increases in line with age (see Appendix), with just 69% of 16-24s

drinking coffee, compared to 91% of over-65s.

This translates into frequency of usage, with almost half of over-65s drinking coffee two or more

times a day, in contrast to just 14% of 16-24s.



FIGURE 42: CONSUMPTION OF COFFEE (ANY TYPE), BY FREQUENCY, BY AGE, JUNE 2013 Base: 2,000 internet users aged 16+

SOURCE: GMI/MINTEL

The aging UK population (see Market Drivers) therefore bodes well for the future of the coffee

market.

With over-65s less likely than average to drink soft drinks such as bottled water (see Mintel’s

Bottled Water – UK, March 2013) and significantly more likely than all other age groups to agree

that ‘Coffee is a good way to stay hydrated’, operators should perhaps be focusing on the

hydrating properties of drinking coffee among this group, appealing to the 42% of this group who

are planning to take better care of their health in the future (see Mintel’s Lifestyles of the Over-55s

– UK, April 2012.

16-24s opt for convenient formats

Like tea, the coffee market faces more intense competition from other soft drinks (see Market

Drivers) for the spending of 16-24s. The lack of interest among 16-24s in coffee therefore poses a

challenge for future growth, should this group continue to avoid this drink.

Potential lies in convenient formats, with 16-24s being more likely than average to drink RTD,

instant cappuccino and pods.



FIGURE 43: CONSUMPTION OF INSTANT CAPPUCCINOS/LATTE/MOCHA COFFEE (EG KENCO 3-IN-1, STARBUCKS VIA, ETC.), CHILLED READY-TO-DRINK COFFEE (EG STARBUCKS FRAPPUCCINO, ILLY ICED COFFEE, ETC.) AND COFFEE PODS (EG

NESPRESSO), BY AGE JUNE 2013 Base: 2,000 internet users aged 16+

SOURCE: GMI/MINTEL

The above findings and the fact that 16-24s are more likely to visit coffee shops (see Mintel’s

Coffee Shops – UK, February 2012) indicates that younger consumers place a premium on coffee

shop brands such as Starbucks, which has extended its presence in the retail market through Via

and chilled RTD versions. The fact that the brand also has a presence in the ground coffee and

instant and micro-ground (the latter through Via) categories should appeal to this younger age

group, who are more likely to agree with the statement ‘Coffee-shop brands (eg Starbucks Via)

make better in-home coffee than brands like Nescafé and Kenco’ – 33% among 16-24s, compared

to 23% on average (see Consumer Attitudes Towards Coffee section).

Indeed, younger consumers’ preference for fresh formats could help to add value to the overall

retail coffee market in the longer term, should the sector succeed in encouraging them to switch

their coffee consumption from out of home to in-home.

Pods and micro-ground instant coffee attract a similar (and discerning) user base

Coffee pods attract an affluent user base (usage peaks among 25-34s, ABs and the highest earners)

due to the still relatively high price of the machines as an upfront cost (in the region of £80+), as

well as the high price per serving compared to most other coffee types.



According to Mintel’s Small Kitchen Appliances – UK, December 2012, in terms of socio-

economic group, ABC1 consumers are the more frequent users of coffee machines, with 30% of

owners using them daily and 60% using them several times in a week. The lower level frequency

associated with C2DEs (42% use them only several times in a month) may be illustrative of the

high costs associated with the pods and cartridges that fit capsule machines, and the fact that

instant coffee represents a much cheaper alternative to bean and ground varieties of coffee.

Posing a threat to coffee pods, however, is micro-ground instant coffee, which attracts a similar

user base – namely 25-34s, ABs and higher earners. The product, for instance Kenco Millicano or

Nescafé Azera, offers a blend of instant coffee and roast and ground coffee, claiming to offer a

barista-style coffee in an instant format.

With Dualit winning its case against Nespresso in early 2013, allowing the introduction of

Nespresso-machine compatible pods, the cost of replacement coffee pods should become more

affordable in the longer term, helping to stem any switching to micro-ground varieties.

Almost half drink three types of coffee or less FIGURE 44: REPERTOIRE OF TYPES OFCOFFEE DRUNK, JUNE 2013 Base: 2,000 internet users aged 16+

SOURCE: GMI/MINTEL

The tendency to drink 6-9 different types of coffee (19%) is significantly biased towards men

(22%), who are more likely, on average to drink coffee and also 25-34s (32%) – who tend to be

generally more experimental in their eating/drinking habits.

The emergence of newer formats eg coffee pods, micro-ground instant instant, demonstrates the

potential for consumers to expand their (rather low) repertoire, highlighting the necessity for

brands to innovate and have a presence across a wide range of coffee product formats.

Consumer – Factors Influencing Choice Coffee UK, August 2013


Consumer – Factors Influencing Choice

Key points

Rich taste is the main reason affecting coffee drinkers’ choice of one product over another,

resonating among 53% of coffee drinkers.

16-24s are more likely than average to see added flavours and issues such as fair trade and

organic as factors influencing their purchase.

There are marked opportunities for premium brands, with one in four consumers, especially

Londoners and higher earners, noting premium brands (eg Nespresso) as a choice factor.

Convenience remains important to consumers, with around a quarter seeing convenient

packaging as a factor influencing their choice, boding well for innovation in this area.

Rich taste generates majority appeal

To assess factors influencing consumers’ choice of coffee, respondents were asked:

“Now thinking about shopping for coffee to drink at home, which of the following, if any, would make you choose one product over another? Please select up to five.”

FIGURE 45: FACTORS INFLUENCING CHOICE OF COFFEE, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home

SOURCE: GMI/MINTEL



Rich taste is the main reason affecting coffee drinkers’ choice of one product over another,

important to more than half of consumers, for the second year running (see Mintel’s Coffee – UK,

April 2012).

That almost three in ten consumers (29%) rank fair trade as an important factor highlights the

continued value of this label, recognised by almost nine in ten consumers (see Mintel’s

Provenance in Food and Drink – UK, March 2013). Indeed, fair trade is deemed more important

than ethical packaging, which has become more widespread in the coffee market, which is

important to just 15% of consumers.

16-24s rate flavours and ethical issues

For 16-24s, a rich taste is less important than average, this group instead being more likely than

average to see added flavours and issues such as fair trade and organic as factors influencing their

purchase.

FIGURE 46: FACTORS INFLUENCING CHOICE OF COFFEE, BY AGE, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home

SOURCE: GMI/MINTEL

Reflecting their above-average tendency to have visited coffee shop (see Mintel’s Coffee shops –

UK, February 2012), 16-24s also place importance on coffee shop brands such as Costa. Overall,

this factor garners low appeal (12%), reflecting how this is an emerging sector and suggesting that

the coffee shops stalwarts have some work to do to increase distribution beyond their own stores

and convince consumers to switch from their favourite at-home coffee shops brands.

Potential for premium brands

There are marked opportunities for premium brands, with one in four consumers, especially

Londoners and higher earners noting premium brands such as Nespresso as a choice factor.



FIGURE 47: THOSE FOR WHOM ‘A PREMIUM BRAND (EG NESPRESSO)’ IS AN IMPORTANT ATTRIBUTE WHEN CHOOSING TO BUY

ONE IN-HOME COFFEE BRAND OVER ANOTHER, BY REGION AND GROSS ANNUAL HOUSEHOLD INCOME, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home

SOURCE: GMI/MINTEL

This reflects the premiumisation trend within the coffee market. More than half of UK adults now

drink fresh coffee in the home (see Consumer – Usage), while premium segments such as coffee

pods and ground coffee are growing faster than the overall market in value terms.

Premium brands such as Carte Noire, Taylors and Lavazza have seen value sales grow at a greater

rate when compared to the overall market, suggesting that consumers are currently placing an

emphasis on premium brands, being willing to pay more for a product that is centred on quality

and added value.

Coffee deemed convenient

To assess how consumers view different hot drinks, research was carried out by GMI among 1,500

internet users aged 16+ in February 2013 (see Appendix for detailed demographics).

Respondents were asked:

“When thinking about coffee, tea and hot chocolate, which, if any, of the following words do you typically associate with these drinks?”



FIGURE 48: CORRESPONDENCE ANALYSIS OF QUALITIES ASSOCIATED WITH SELECTED HOT DRINKS, FEBRUARY 2013 Base: 1,500 internet users aged 16+

SOURCE: GMI/MINTEL

Coffee’s energy-boosting qualities are a key selling point, as is its positioning as a convenient hot

beverage. Indeed, almost one in four coffee drinkers consider convenient packaging such as

resealable packs to be a key factor influencing their choice of coffee, boding well for innovation in

this area.

New product development of flavoured varieties could help to strength its position as an indulgent

drink, allowing coffee to better compete with hot chocolate, which is seen as the most indulgent.

Similarly, the rise in decaffeinated options could improve coffee’s competitive positioning from a

health perspective, with herbal tea performing most strongly in comparison to other hot drinks.

Consumer – Drivers to Drinking Coffee Coffee UK, August 2013


Consumer – Drivers to Drinking Coffee

Key points

That half of consumers say ‘coffee is a good way to start the day’ and a quarter ‘always

drink coffee when having a break’ implies that the ritual of coffee drinking is part of its

appeal.

The ‘treat’ aspect of coffee drinking offers a tangible marketing message for the sector.

Encouraging consumers to trade up when treating themselves would help to add value to the

market, while potentially further migration to out of home coffee shops.

While the bitter taste of coffee acts as a deterrent to consumption among younger age

groups, flavourings such as syrup offer a means to overcome this. In this sense, coffee with

added flavours can act as a gateway product for 16-24s.

Half see coffee as a way to start the day

To assess consumer attitudes towards drinking coffee at home, respondents were asked:

“Thinking about why you drink coffee at home, which, if any, of the following statements do you agree with? Select all that apply.”

FIGURE 49: DRIVERS TO DRINKING COFFEE, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home

SOURCE: GMI/MINTEL



That half of consumers say ‘coffee is a good way to start the day’ and a quarter ‘always drink

coffee when having a break’ implies that the ritual of coffee drinking is part of its appeal.

Associations with breakfast or mid-morning breaks could offer cross-promotional opportunities

with products such as breakfast biscuits or Fox’s new Caffè range, which is positioned as an

accompaniment to coffee and targets the coffee break opportunity. This has the potential to appeal

to the fifth of consumers who would like to see more cross-product promotions/deals (see Mintel’s

Attitudes towards Pricing and Promotions in Food and Drink – UK, April 2013 report), with

higher agreement among 16-24s (30% compared to 20% on average).

‘Treat’ aspect offers a tangible marketing opportunity

Treating oneself is a tangible marketing opportunity for the coffee market, with more than three in

ten (35%) saying that coffee makes a nice treat.

This is reflected in consumer attitudes towards non-alcoholic drinks in general. Among consumers

who are spending more in 2013 compared to 2012 (6% – see Mintel’s British Lifestyles 2013 –

Examining the Legacy of the Economic Downturn – UK, April 2013), treating oneself is a driver to

almost three in ten (29%). Encouraging consumers to trade up when treating themselves eg to

ground coffee, would help to add value to the coffee market, while potentially stemming any

further migration to out-of-home coffee shops, a market which is forecast to reach £1.5 billion in

2016 (see Market Drivers).

Tapping into the treat aspect provides an opportunity to build a more emotional connection with

consumers when drinking coffee. Here, the coffee market could take cues from recent tea

advertising. With little to differentiate everyday tea brands from each other, the brands have

looked to more emotive messages, emphasising tea drinking as an everyday occasion and

encouraging consumers to take time out of their busy schedules to catch up with family and

friends, or with yourself make time for yourself. Recent campaigns include: ‘Make Time, Make

Tetley’, ‘Everything Stops for Yorkshire Tea’, PG Tips ‘Catch Up Cuppa’ and Twinings’ ‘Gets

You Back To You’ campaign.

Providing a pick-me-up to consumers

More than a third of consumers say that coffee helps them to stay alert or provides an energy

boost, suggesting that there is further scope to position coffee as a ‘pick me up’.

This sentiment is particular relevant to younger consumers (under-25s), while marketing messages

highlighting mental alertness benefits would resonate most among 35-54s.



FIGURE 50: AGREEMENT WITH THE STATEMENTS ‘COFFEE HELPS ME TO STAY ALERT’ AND ‘COFFEE GIVES ME AN ENERGY

BOOST’, BY AGE, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home

SOURCE: GMI/MINTEL

The UK market could look to global examples of coffee claiming energy-boosting properties, such

as Avalanche Kick Start Coffee Energy Drink, available in New Zealand, which features added

guarana, taurine, minerals and vitamins for ‘an extra burst of energy’.

Promoting coffee on an ‘added energy’ platform would enable it to compete more effectively with

other non-alcoholic categories such as energy drinks, which have seen a proliferation in naturally

stimulating ingredients such as ginseng, guarana and vitamin B.

Flavourings mask the bitter taste for 16-24s

Usage of coffee increases in line with age, with 16-24s being least likely to drink coffee (see

Consumer – Usage). This age group shows a higher tendency to be put off by the sometimes bitter

taste of coffee, which is reflected in their above-average usage of RTD chilled coffee, instant

cappuccinos etc.

Coffee chains have helped to create demand for added flavourings and syrups for coffee products,

which help to disguise the bitterness of traditional coffee formats and appeal to a younger

audience.



FIGURE 51: AGREEMENT WITH THE STATEMENTS ‘I AM SOMETIMES PUT OFF BY THE BITTER TASTE OF COFFEE’ AND ‘I TEND TO

ADD FLAVOURINGS (EG SYRUP) TO MY COFFEE TO DISGUISE THE BITTER TASTE’, BY AGE, JUNE 2013

SOURCE: GMI/MINTEL

With usage of coffee shops biased towards 16-24s (see Mintel’s Coffee Shops – UK, February

2012), where the ability to customise a drink is part of the appeal, this offers opportunities for

coffee shop brands such as Starbucks to extend their presence in the retail market by introducing

branded syrups, as seen in the US market.

Meanwhile, Douwe Egberts has looked to attract younger consumers to instant coffee through the

launch of its three-strong range of flavoured instant products, unveiled in August 2012. Available

in smooth caramel, roasted hazelnut and delicate vanilla, the coffee contains just two calories per

cup. This level of customisation in the home, replicating to some extent the coffee shop

experience, would adhere to Mintel’s Inspire trend Make it Mine, which looks at how

personalisation is now considered a right, rather than a privilege.

Health is also a trigger for under-35s, who are less likely than average to say ‘coffee is a healthier

option compared to fizzy caffeine drinks’ (18% compared to 22% on average – see Appendix).

Douwe Egberts has also sought to combat this concern through the launch of The Flavour

Collective, with each cup containing just 2 calories when drunk without milk.

Consumer – Attitudes Towards Drinking Coffee Coffee UK, August 2013


Consumer – Attitudes Towards Drinking Coffee

Key points

Quality is rated more highly than convenience by a sizeable minority, with almost one in

three adults who have drunk coffee at home (31%) saying that the quality of coffee is more

important than how easy it is to make.

The benefits of instant coffee are still apparent, with just under a third saying that instant

coffee delivers the same caffeine hit as non-instant and just 19% saying that standard instant

coffee tastes bland.

With one in five (21%) saying they notice a difference in quality between standard and

micro-ground, and one in four (27%) agreeing that micro-ground coffee is worth paying

more for than regular instant, there are clear opportunities for expanding the added value

options available.

16-24s are more likely to say that it’s hard to recreate the coffee shop experience at home,

signalling that coffee shop brands sold in the retail environment should promote the

authenticity of their products as a means of recreating the taste and quality at home.

Quality is more important than convenience

To assess consumer attitudes toward drinking coffee, respondents were asked:

“Thinking about drinking coffee at home, which, if any, of the following statements do you agree with? Select all that apply.”



FIGURE 52: AGREEMENT WITH STATEMENTS ON COFFEE, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home

SOURCE: GMI/MINTEL

Quality is rated more highly than convenience, with a sizeable minority (31%) saying that quality

of coffee is more important than how easy it is to make.

While this implies that consumers are willing to spend longer making a quality coffee, the

convenience of instant coffee is still likely to be a driver to purchase and usability, demonstrated

by the fact that instant coffee is drunk by almost eight in ten consumers and accounts for almost

80% of value and volume sales (see Segment Performance). This would indicate that harmonising

quality and convenience would most resonate with consumers.

Just 31% say that coffee made using a cafetiére or stove top gives a stronger taste than instant

coffee, implying that ground coffee brands should place more emphasis on the strength spectrum

of their products and the quality of the brew they produce, which is worth waiting for.

Key analysis: Mintel’s Inspire trend Slow It All Down looks at how consumers are rating quality

over quantity and that the faster the pace of life, the greater the need to slow it all down (at least

once in a while).

With a quarter of consumers always drinking coffee when having a break and one in three (35%)

describing coffee as a ‘treat’, campaigns and products that promote the emotional connection

between coffee and downtime or ‘me time’, would help to position coffee with feelings of escapism.



Instant coffee delivers on caffeine and taste

Instant coffee, positioned as the most affordable type of coffee for consumers and remaining the

most popular (73% drink standard instant), also delivers on functionality. A sizeable minority

(31%) of consumers say that instant coffee provides the same caffeine hit as non-instant.

That just 19% of consumers say that standard instant coffee tastes bland indicates that for the

majority, the product is also delivering on taste. An opinion echoed by one member of Mintel’s

online focus group:

“Nescafé will be my preferred brand. I don’t usually swap between brands unless there is a promotion.

I have not found any other brand that can substitute Nescafé coffee as it has the best taste.”

– 25-34-year-old ABC1 male

There are opportunities for the market to encourage trading up, however, through promoting the

superior quality of premium varieties. This is evidenced by the fact that 21% (rising to 25% of

those earning £50,000+) of consumers say they notice a difference in quality between standard and

micro-ground, supported by the fact 27% agree that micro-ground coffee is worth paying more for

than regular instant, offering a tangible means for adding value to the market.

16-24s say it’s hard to recreate coffee shop style drinks at home

Almost a quarter of consumers say that it’s hard to recreate coffee shop-style drinks at home,

while just 13% would like to recreate coffee shop flavours at home. Agreement with these

statements is higher among 16-24s, who are more likely to visit coffee shops (see Mintel’s Coffee

Shops – UK, April 2012). This implies that younger consumers would like to recreate this

experience at home, but are struggling to do so.

Marketing messages centred on friends and social occasions, as seen previously with advertising

such as Doritos’ ‘Friendchips’ campaign, would likely resonate with this group, encouraging them

to recreate the buzz and atmosphere of a coffee shop at home.



FIGURE 53: AGREEMENT WITH THE STATEMENTS ‘IT’S HARD TO RECREATE COFFEE SHOP STYLE DRINKS AT HOME’ AND ‘I WOULD LIKE TO RECREATE COFFEE SHOP FLAVOURS (EG EGGNOG AT CHRISTMAS) AT HOME’, BY AGE, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home

SOURCE: GMI/MINTEL

The emergence of coffee shop brands such as Costa and Starbucks in the retail market, offering an

authentic replication in the home, should therefore appeal to this group,who are also more likely to

want to recreate coffee shop flavours (eg eggnog at Christmas) at home.

As mentioned in the Consumer – Drivers to Drinking Coffee section, branded flavourings such as

syrups, as sold by Starbucks in the US, would allow younger consumers to customise their coffee

when at home.

Extending loyalty cards (commonplace among coffee shop chains) to the retail market eg offering

money-off Costa coffee in-store purchase, could also help to incentivise loyalty and build repeat

custom of coffee shops brands in the home.

Consumer – Attitudes Towards Coffee Coffee UK, August 2013


Consumer – Attitudes Towards Coffee

Key points

Pricing remains integral to the coffee sector. More than three in four consumers would

notice if the price of their favourite coffee went up and a similar number stock up on their

favourite brand when it is on promotion.

Premium varieties of coffee need to prove their taste credentials to consumers, with more

than seven in ten agreeing that ‘It’s only worth paying more for coffee if there is an obvious

difference in taste from cheaper ones’.

Just one in four consumers are convinced that the quality of coffee pods are worth the extra

cost, suggesting that a focus on building value-for-money perceptions would widen their

appeal.

Coffee drinkers are price-conscious but show willingness to trade up

To assess consumer attitudes towards coffee, respondents were asked:

“When thinking about drinking and buying coffee for the home, to what extent do you agree or disagree with the following statements?”

FIGURE 54: ATTITUDES TOWARDS COFFEE, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home

SOURCE: GMI/MINTEL



Price remains integral to the coffee sector, with more than three in four consumers saying that they

would notice if the price of their favourite coffee went up. With the market subject to global

commodity price increases, the pressure is therefore on operators to keep coffee affordable for

consumers.

Promotions are likely to continue to play a role in driving purchasing behaviour, with 76% of

consumers agreeing that they stock up on their favourite brand when it is on promotion.

Agreement with these statements is higher among women, who tend to be the savvy shoppers in

Britain’s households, being significantly more likely than men to limit their purchases to

promotional items (see mintel’s Attitudes towards Pricing and Promotions in Food and Drink –

UK, April 2013).

Key analysis: With women still doing the majority of the shopping for the household (see Mintel

Inspire trend Alpha Mothers), this suggests that affordable prices and promotional activity remain

stalwart mechanisms in generating interest among this group and will remain key to driving sales in

the near future for coffee brands.

Stabilising coffee prices might also improve coffee’s competitive positioning against other hot

drinks such as tea.

Social occasions pose potential for trading up

Social occasions act as a driver to premiumisation, with a third of consumers agreeing that they are

more likely to use premium coffee when drinking with others than when alone.

Pitching premium coffee products as suitable for occasions such as dinner parties or afternoon tea,

when consumers are more open to splashing out for quality in a bid to impress friends, could also

help to justify price premiums.

Proving taste credentials will be key to premiumisation

Key to premiumisation in the coffee market will be through delivering on taste, with the vast

majority of consumers agreeing with the statement ‘It’s only worth paying more for coffee if there

is an obvious difference in taste from cheaper ones’. This reinforces the importance of product

sampling campaigns, which can prompt loyal brand users to deviate from their habitual purchase.

More than a third (36%) of consumers agree that they are more likely to buy a premium version of

their favourite coffee brands than switch to a new brand. Agreement with this statement is higher

among the under-35s, demonstrating that this group lack the confidence to experiment.



FIGURE 55: AGREEMENT WITH THE STATEMENT ‘I WOULD BE MORE LIKELY TO BUY A PREMIUM VERSION OF ONE OF MY

FAVOURITE BRANDS THAN SWITCH TO A NEW PREMIUM BRAND’, BY AGE, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home

SOURCE: GMI/MINTEL

Meanwhile 35% disagree that coffee-shop brands make better in-home coffee than brands such as

Kenco or Nescafé. This is echoed in Mintel’s online focus group:

“Nescafé will be my preferred brand. I don’t usually swap between brands unless there is a promotion

etc. I have not found any other brand that can substitute Nescafé coffee as it has the best taste.”

– 25-34-year-old ABC1 male

Key analysis: Sampling could help to expand the reach of premium formats to consumers who are

reluctant to deviate from their preferred brands. Limited editions (of established coffee brands and

sub-brands eg Kenco, Kenco Gold etc) could also help to add a layer of fun and exclusivity to the

market. Selling these through social networks such as Facebook, as seen with Heinz’s Tomato

Ketchup with Balsamic Vinegar (unveiled in March 2011), could add a sense of theatre to launches

and attract the attention of younger consumers aged 16-24, who are more likely to use social

networks (see Mintel’s Social Media and Networking – UK, May 2012).

Similarly, encouraging younger consumers to suggest recipe ideas or Tweet/post pictures of their

coffee when recreating the coffee shop experience at home could drive engagement with brands.

Premium instant versions are helping to add value

The entrance of wholebean instant coffee products such as Kenco Millicano (launched in 2010) or

Nescafé Azera (unveiled in March 2013), have encouraged consumers to pay more for instant

coffee, helping to add value to the market while not necessarily driving volumes up (see Segment

Performance).

More than a quarter (27%) of consumers agree that micro-ground coffee is worth paying more for

than regular instant, a relatively sizeable proportion considering the immaturity of the segment.

Micro-ground coffee offers a mean for instant coffee brands to compete with the growing

popularity of coffee pods, particularly among their key audience, namely 25-34s and ABs.



However, as more pods become available which are compatible with for example Nespresso

machines, premium instant formats are likely to experience greater competition from pods.

Packaging should balance freshness with convenience

Two fifths of consumers agree ‘It’s worth paying more for packaging that keeps coffee fresher for

longer’. Agreement with this statement is higher among 16-44s, ABs and higher earners (see

Appendix).

Starbucks products offer FlavorLock packaging technology, which use a one-way valve to release

the carbon dioxide, without allowing oxygen in. The brand also emphasises how an unopened bag

will stay fresh for several months, potentially appealing to consumers who are stocking up, which

76% of consumers say they do when their favourite brand is on promotion.

While coffee loses its freshness quickly once opened, affecting quality and taste, consumers also

appear concerned with ease of use and storage, with almost a quarter of consumers rating

convenient packaging (eg resealable) as an important factor influencing their purchase.

This indicates that packaging that balances retaining freshness with convenience would find favour

among consumers.

Little call for smaller formats

Just over a quarter of consumers agree that they would be more likely to buy premium versions in

smaller formats, although a greater amount disagree with this statement, indicating that pack sizes

are not prohibitive.

Agreement with this statement is higher than average among those living in larger households,

where storage space is often limited and which are having to cater to the different tastes of

household members, with households of 5 or more being more likely to drink 6-9 types of coffee –

33% compared to 19% on average (see Consumer – Usage).

The majority remained unconvinced whether coffee pods represent value for money

Just one in four consumers are convinced that the quality of coffee pods are worth the extra cost,

suggesting that the segment needs to convince the wider population that the price premium of

coffee pods is justified, eg through promoting the lack of wastage, increased freshness and quality

taste.

While five Nespresso Boutique stores exist in the UK (three in London, plus one each in

Birmingham and Manchester), key to expanding the reach of coffee pods will be through offering

consumers the chance to try coffee made using the machines/pods. Electrical and departments

stores such as Currys and John Lewis could take inspiration from Nespresso’s stores and Miele’s

experiential store through offering consumers the opportunity to taste coffee made using pods

while shopping, thus demystifying the product for consumers and offering a justification for the

extra cost.

Appendix – Market Drivers Coffee UK, August 2013


Appendix – Market Drivers FIGURE 56: GDP, PDI, CONSUMER EXPENDITURE AND SAVINGS, AT CURRENT PRICES, 2008-18 GDP PDI Consumer

expenditure Savings Savings

ratio £bn £bn £bn £bn %

2008 1,441 921 893 29 2.2 2009 1,402 954 877 78 7.0 2010 1,467 1,000 921 79 7.3 2011 1,516 1,027 954 73 6.7 2012 1,541 1,068 991 77 6.7 2013 (est) 1,581 1,178 1,029 148 7.1 2014 (proj) 1,641 1,237 1,084 154 8.0 2015 (proj) 1,710 1,308 1,150 158 9.0 2016 (proj) 1,786 1,382 1,221 162 9.8 2017 (proj) 1,867 1,382 1,299 166 10.6 2018 (proj) 1,949 1,552 1,381 170 11.1 % change 2008-13 +9.7 +27.8 +15.3 +416.1 +4.9 % change 2013-18 +23.3 +31.8 +34.2 +14.7 +3.9 * percentage point change SOURCE: OFFICE FOR NATIONAL STATISTICS/HM TREASURY/MINTEL

Appendix – Market Size and Forecast Coffee UK, August 2013


Appendix – Market Size and Forecast FIGURE 57: BEST- AND WORST-CASE FORECASTS FOR RETAIL SALES OF COFFEE, BY VALUE, 2013-18 Worst-

case forecast


Mintel forecast


Best-case

forecast


£m £m £m

2013 (est) 1,105 100 +4.7 1,105 100 +4.7 1,105 100 +4.7

2014 (fore) 990 90 -10.4 1,155 105 +4.5 1,320 119 +19.5 2015 (fore) 1,029 93 +3.9 1,212 110 +4.9 1,395 126 +5.7 2016 (fore) 1,066 96 +3.6 1,262 114 +4.1 1,457 132 +4.4 2017 (fore) 1,105 100 +3.7 1,313 119 +4.0 1,522 138 +4.5 2018 (fore) 1,133 102 +2.5 1,350 122 +2.8 1,568 142 +3.0 SOURCE: BASED ON IRI/MINTEL

FIGURE 58: BEST- AND WORST-CASE FORECASTS FOR RETAIL SALES OF COFFEE, BY VOLUME, 2013-18 Worst-

case forecast


Mintel forecast


Best-case

forecast


£m £m £m

2013 (est) 61 100 +3.4 61 100 +3.4 61 100 +3.4

2014 (fore) 59 96 -3.3 62 102 +1.6 66 108 +8.2 2015 (fore) 60 99 +1.7 64 105 +3.2 68 112 +3.0 2016 (fore) 62 101 +3.3 66 109 +3.1 71 116 +4.4 2017 (fore) 63 104 +1.6 68 112 +3.0 73 120 +2.8 2018 (fore) 65 106 +3.2 70 115 +2.9 76 124 +4.1 SOURCE: BASED ON IRI/MINTEL

Appendix – Brand Research Coffee UK, August 2013


Appendix – Brand Research

“Which single statement best describes your use of each of these brands?” FIGURE 59: BRAND USAGE, MAY 2013 Base: 2,018 internet users aged 16+ Nespresso Carte Noire Douwe Egberts Kenco Nescafé % % % % %

Never used, and never heard of it 36 18 20 14 8 Never used, but have heard of it 48 43 35 33 21 Use rarely 5 14 15 17 19 Use sometimes 6 16 17 20 20 Use often 3 6 8 10 16 Use all the time 2 3 4 6 16 Used in the last 12 months 8 17 22 26 44 Ever used 17 38 45 53 71 Awareness 64 82 80 86 92 SOURCE: GMI/MINTEL

“Which single statement best describes your intentions towards each of these brands?”

FIGURE 60: BRAND COMMITMENT, MAY 2013 Nespresso Carte Noire Douwe Egberts Kenco Nescafé

Base: All internet users aged 16+ who have heard of a brand and expressed an opinion

1,301 1,645 1,611 1,738 1,864

% % % % %

I would never consider drinking this brand

16 14 13 13 11

I would only consider drinking this brand if I had no other option

20 16 14 13 12

I have no preference for this brand over others

54 52 50 52 41

I prefer this brand over others 7 14 16 17 24 This is a favourite brand 3 4 7 7 13 Committed 10 18 22 23 37 SOURCE: GMI/MINTEL



“How well do you think the following brands are doing?”

FIGURE 61: BRAND MOMENTUM, MAY 2013 Nespresso Carte Noire Douwe Egberts Kenco Nescafé


1,301 1,645 1,611 1,738 1,864

% % % % %

Falling behind 7 7 9 9 11 1 – falling behind 1 1 1 1 2 2 6 6 8 8 9 3 – standing still 55 58 55 56 50 Surging forward 38 34 36 35 39 4 31 29 29 28 28 5 – surging forwards 6 5 7 7 11 SOURCE: GMI/MINTEL

“Which single statement best describes how well you think each brand stands out from others?”

FIGURE 62: BRAND DIVERSITY, MAY 2013 Nespresso Carte Noire Douwe Egberts Kenco Nescafé


1,301 1,645 1,611 1,738 1,864

% % % % %

Not diverse 27 24 24 28 28 It’s the sort of brand that you don’t notice and it doesn’t stand out at all

7 4 4 4 4

It’s much the same as most brands and doesn’t stand out much

21 20 21 24 24

It isn’t very different from other brands but it does stand out

38 37 39 43 39

Diverse 35 39 37 29 33 It stands out as being somewhat different from other brands

30 31 29 23 23

It’s a unique brand which really stands out from other brands

5 7 7 5 11

SOURCE: GMI/MINTEL



“How would you rate your overall satisfaction with the following brands?”

FIGURE 63: BRAND SATISFACTION, MAY 2013 Nespresso Carte Noire Douwe Egberts Kenco Nescafé

Base: All internet users aged 16+ who have drunk a brand and expressed an opinion

338 774 900 1,075 1,435

% % % % %

Negative endorsement 4 3 4 4 6 Unsatisfactory 1 1 1 1 1 Poor 3 3 3 3 5 Average 33 27 30 33 33 Positive endorsement 62 70 67 63 61 Good 45 52 45 47 40 Excellent 17 17 21 16 21 SOURCE: GMI/MINTEL

“How likely are you to recommend the following brands to colleagues or friends?”

FIGURE 64: BRAND RECOMMENDATION, MAY 2013 Nespresso Carte Noire Douwe Egberts Kenco Nescafé

Base: All internet users aged 16+ who have drunk a brand and expressed an opinion

338 774 900 1,075 1,435

% % % % %

Detractors 33 32 34 35 36 Passives 34 31 27 30 25 Promoters 33 36 39 34 39 Net Promoter Score -1 4 5 -1 3 SOURCE: GMI/MINTEL

“Choose all brands you associate with each statement.”

FIGURE 65: BRAND ATTITUDE, MAY 2013 Nespresso Carte Noire Douwe Egberts Kenco Nescafé


1,301 1,645 1,611 1,738 1,864

% % % % %

A brand that I trust 21 31 39 40 53 A brand that cares for the environment 12 14 17 21 22 A brand that has consistently high quality 28 46 50 44 51 A brand that has a good reputation 28 44 51 50 61 A brand that is socially responsible 15 17 19 23 27 A brand that is innovative 28 22 22 24 28 A brand that offers good value 10 15 19 30 48 A brand that is worth paying more for 13 22 24 16 20 A brand that I am proud to be associated with

12 20 24 23 31

A brand that expresses my personality 7 13 15 15 21 SOURCE: GMI/MINTEL



“From the pairs below, please choose the word from each pair that matches your image of each brand.”

FIGURE 66: BRAND IMAGE – MACRO IMAGE, MAY 2013 Nespresso Carte Noire Douwe Egberts Kenco Nescafé


1,301 1,645 1,611 1,738 1,864

% % % % %

Boring 9 8 10 11 15 Fun 30 27 27 31 33 Tired 6 7 8 10 16 Vibrant 32 33 32 31 32 Exclusive 18 21 14 5 4 Accessible 31 38 43 53 61 Unappealing 7 6 7 7 9 Engaging 29 34 35 33 37 Unethical 4 2 3 3 5 Ethical 21 22 23 27 27 SOURCE: GMI/MINTEL

“Now, from the list below, please select all words that describe your image of each brand.”

FIGURE 67: BRAND IMAGE – MICRO IMAGE, MAY 2013 Nespresso Carte Noire Douwe Egberts Kenco Nescafé


1,301 1,645 1,611 1,738 1,864

% % % % %

Authentic 13 19 24 22 22 Exciting 8 9 9 8 10 Sophisticated 20 29 20 8 8 Refreshing 12 14 17 21 22 Creative 13 9 8 9 9 Stylish 25 28 20 12 10 Cool 12 11 9 9 9 Masculine 5 6 4 3 3 Reassuring 4 7 12 15 18 Delicious 12 19 21 22 22 Pure 7 10 12 12 10 Feminine 4 5 4 4 4 Traditional 8 12 24 32 46 Disappointing 3 4 4 6 8 Overrated 12 9 7 6 9 None of these 34 25 26 26 20 SOURCE: GMI/MINTEL



“Different people have different views about themselves. Please tell me the extent to which you agree or disagree with each statement on a scale of 0-5 (where 1 means you strongly disagree and 5 means you strongly agree).”

FIGURE 68: TARGET GROUPS, BY DEMOGRAPHICS, MAY 2013 Base: 2,018 internet users aged 16+ All Conformists Simply the

Best Shelf

Stalkers Habitual

Shoppers Individualists

Sample size: 2,018 222 348 597 485 366 % % % % % %

Gender:

Male 51 46 54 50 61 39 Female 49 54 46 50 39 61 Age:

16-24 18 24 18 8 27 17 25-34 19 18 18 13 27 19 35-44 22 17 24 23 22 23 45-54 18 16 17 21 13 21 55+ 23 26 24 34 10 19 Gender and age:

Men 16-24 9 9 11 4 17 5 Men 25-34 9 6 8 6 16 10 Men 35-44 11 9 16 10 12 8 Men 45-54 9 8 9 10 9 8 Men 55+ 12 14 10 19 7 7 Women 16-24 9 14 7 4 10 12 Women 25-34 9 12 9 7 11 9 Women 35-44 11 8 8 13 10 15 Women 45-54 9 8 8 11 5 13 Women 55+ 11 12 14 15 3 12 Region:

Inner and Greater London

14 10 18 13 18 11

South East/East Anglia 24 26 25 23 22 23 South West and Wales 14 15 14 16 11 14 East and West Midlands

16 15 14 19 16 15

North West 11 9 9 10 11 12 Yorks, Humberside 8 11 8 7 7 8 North and Scotland 13 14 13 12 14 16 Area:

Inner city/town 29 27 30 20 41 28 Town/city outskirts 53 55 51 59 46 52 Rural area 18 19 19 21 13 20 Socio-economic group:

ABC1 62 64 66 62 60 62 C2DE 38 36 34 38 40 38 AB 31 28 39 30 29 32 C1 31 36 27 32 31 30 C2 20 14 19 20 22 22 D 13 16 11 11 15 13 E 5 5 4 7 3 4 DE 18 21 16 18 18 16



Internet access:

Using a computer at work/ university/ college

43 42 48 34 47 48

Using my personal computer

96 99 99 97 91 98

Using a tablet device e.g. iPad

31 26 37 26 35 33

Using a gaming device e.g. Xbox, Wii

19 18 19 11 27 22

Using an e-reader e.g. Kindle

12 11 13 9 12 14

Using a smartphone/ BlackBerry

54 55 63 47 51 61

Other 2 1 2 2 2 2 Websites visited:

News sites e.g. BBC News

88 90 90 86 90 87

Online magazines e.g. Ask Men, Vogue

45 35 50 31 64 45

Online video e.g. BBC iPlayer, YouTube

89 90 91 86 91 90

Blogs 60 53 63 49 71 62 Online maps/ GPS services e.g. Google Maps

90 89 93 88 90 91

Social networking sites e.g. Facebook, Twitter

80 78 82 71 88 84

Shopping sites e.g. Amazon, eBay, ASOS

98 98 98 98 98 99

Online supermarkets e.g. Tesco, Ocado, Asda

76 73 80 67 84 78

Brands’ own sites e.g. L’Oréal, Apple

70 64 79 62 75 72

Price comparison sites e.g. uSwitch, Kelkoo, Compare the Market

80 77 81 79 81 83

Other 82 85 82 83 80 80 Social media usage:

Facebook 97 99 98 96 97 97 Twitter 51 46 58 41 62 48 Bebo 14 5 17 3 29 9 LinkedIn 31 25 38 25 38 26 Friends Reunited 24 13 24 20 34 22 MySpace 16 9 17 7 31 12 Other 20 15 21 12 34 17 SOURCE: GMI/MINTEL



FIGURE 69: PSYCHOGRAPHIC SEGMENTATION, BY TARGET GROUPS, MAY 2013 Base: 2,018 internet users aged 16+ All Conformists Simply

the Best

Shelf Stalkers

Habitual Shoppers

Individualists

Sample size: 2,018 222 348 597 485 366 % % % % % %

I consider all available options before deciding what product to buy:

Any agree 74 82 61 82 64 82 Neither agree nor disagree 21 15 26 15 32 14 Any disagree 5 4 13 3 5 4 I often buy things on the spur of the moment:

Any agree 46 37 58 31 55 54 Neither agree nor disagree 29 27 25 30 35 26 Any disagree 24 36 17 38 9 20 I tend to make purchase decisions quickly, based on ‘gut feeling’:

Any agree 40 30 41 31 52 47 Neither agree nor disagree 36 30 33 37 42 31 Any disagree 24 40 26 33 6 21 I only buy brands I have bought before:

Any agree 15 10 5 7 46 0 Neither agree nor disagree 33 24 35 34 49 15 Any disagree 52 66 59 59 5 85 I like to try new brands that I see

Any agree 61 30 67 56 61 81 Neither agree nor disagree 32 50 27 36 34 16 Any disagree 7 20 6 7 4 2 I want to stand out from the crowd:

Any agree 29 12 42 7 43 43 Neither agree nor disagree 34 30 35 25 42 38 Any disagree 37 59 23 68 15 19 I like people to admire things I own:

Any agree 43 55 66 6 53 62 Neither agree nor disagree 34 36 27 36 39 27 Any disagree 23 10 6 58 7 11 I do my own thing, regardless of the current trends:

Any agree 82 66 82 93 67 92 Neither agree nor disagree 14 22 13 5 29 6 Any disagree 4 12 5 2 4 2



I don’t like to be too different from everyone else:

Any agree 26 47 18 18 43 10 Neither agree nor disagree 37 40 35 36 45 30 Any disagree 37 13 47 46 12 60 I like to have new products ahead of everybody else:

Any agree 29 12 46 6 45 38 Neither agree nor disagree 35 32 35 28 44 38 Any disagree 36 57 19 66 12 24 I shop around from a variety of brands:

Any agree 80 81 73 85 64 96 Neither agree nor disagree 17 13 22 12 32 4 Any disagree 3 6 5 3 4 0 Once I find a brand I like I tend to stick to it:

Any agree 48 68 62 47 58 13 Neither agree nor disagree 38 27 32 40 38 46 Any disagree 14 5 6 13 4 41 I look for the lowest possible prices when I go shopping:

Any agree 63 90 21 66 61 84 Neither agree nor disagree 26 9 38 25 34 13 Any disagree 11 1 41 8 5 3 I always look out for special offers:

Any agree 83 98 72 86 70 97 Neither agree nor disagree 14 2 19 12 26 3 Any disagree 3 0 9 2 3 0 I am happy to pay extra for better quality:

Any agree 62 52 93 63 53 48 Neither agree nor disagree 28 34 6 28 37 36 Any disagree 10 14 1 9 10 17 I tend to go for premium rather than standard goods/services

Any agree 33 6 66 23 46 17 Neither agree nor disagree 40 32 28 47 45 38 Any disagree 27 62 6 30 9 44 I feel more comfortable buying branded products than a shop’s own label:

Any agree 37 18 64 29 49 16 Neither agree nor disagree 35 32 25 35 42 34 Any disagree 29 50 10 36 8 50 I seek other people’s opinions before choosing a product:

Any agree 25 38 13 22 39 14 Neither agree nor disagree 35 36 31 34 46 27 Any disagree 40 26 56 45 15 58



I always buy the brands I think my family/friends would approve of:

Any agree 22 17 20 6 49 15 Neither agree nor disagree 33 35 33 26 43 27 Any disagree 46 48 47 68 8 57 SOURCE: GMI/MINTEL

FIGURE 70: BRAND USAGE, BY TARGET GROUPS, MAY 2013 Base: 2,018 internet users aged 16+ All Conformists Simply

the Best

Shelf Stalkers

Habitual Shoppers

Individualists

Sample size: 2,018 222 348 597 485 366 % % % % % %

Nespresso:

Never used, and never heard of it 36 30 33 37 39 34 Never used, but have heard of it 48 57 47 53 35 51 Use rarely 5 5 5 6 5 5 Use sometimes 6 5 7 3 9 6 Use often 3 2 3 1 8 2 Use all the time 2 1 4 0 4 1 Used in the last 12 months 8 7 11 4 11 7 Ever used 17 13 20 10 26 15 Awareness 64 70 67 63 61 66 Carte Noire:

Never used, and never heard of it 18 16 18 14 30 13 Never used, but have heard of it 43 55 44 45 33 45 Use rarely 14 9 12 18 8 18 Use sometimes 16 9 19 15 15 17 Use often 6 6 4 5 9 5 Use all the time 3 4 3 2 5 2 Used in the last 12 months 17 10 18 17 19 17 Ever used 38 29 39 41 37 42 Awareness 82 84 82 86 70 87 Douwe Egberts:

Never used, and never heard of it 20 19 18 15 32 17 Never used, but have heard of it 35 48 32 37 30 35 Use rarely 15 11 17 21 8 16 Use sometimes 17 12 18 18 15 19 Use often 8 5 9 6 11 11 Use all the time 4 5 5 3 5 2 Used in the last 12 months 22 14 23 21 21 26 Ever used 45 33 49 49 39 49 Awareness 80 81 82 85 68 83 Kenco:

Never used, and never heard of it 14 14 12 8 25 10 Never used, but have heard of it 33 38 35 35 27 33 Use rarely 17 15 19 23 9 19 Use sometimes 20 19 18 19 19 23 Use often 10 9 9 9 12 11 Use all the time 6 6 7 7 8 4 Used in the last 12 months 26 21 24 26 26 30 Ever used 53 48 53 57 48 57 Awareness 86 86 88 92 75 90



Nescafé:

Never used, and never heard of it 8 6 6 5 15 5 Never used, but have heard of it 21 33 21 19 17 24 Use rarely 19 18 17 27 9 23 Use sometimes 20 17 20 21 22 20 Use often 16 14 15 13 18 17 Use all the time 16 12 21 15 18 11 Used in the last 12 months 44 36 51 42 45 45 Ever used 71 61 73 76 68 71 Awareness 92 94 94 95 85 95 SOURCE: GMI/MINTEL

Brand index FIGURE 71: BRAND INDEX, MAY 2013 Base: 2,018 internet users aged 16+ Mean

Nespresso 26.45 Carte Noire 36.89 Douwe Egberts 37.89 Kenco 41.27 Nescafé 49.25 SOURCE: GMI/MINTEL

Appendix – Consumer – Usage Coffee UK, August 2013


Appendix – Consumer – Usage FIGURE 72: CONSUMPTION OF COFFEE, JUNE 2013 Base: 2,000 internet users aged 16+ Any

usage At least once a

day

2 or more times a

day

Once a day

At least once a week

% % % % %

Any coffee 82 60 37 23 12 Any instant 77 50 30 20 15 Any fresh 56 22 8 14 16 Standard instant coffee (eg Nescafé) 73 47 28 19 15 Ground coffee (eg Carte Noire) 50 16 6 9 15 Instant cappuccinos/latte/mocha coffee (ie Kenco 3-in-1, Starbucks Via, etc)

34 6 1 5 10

Decaffeinated coffee (any type) 30 10 5 5 8 Whole bean or micro-ground instant coffee (eg Kenco Millicano, Nescafé Azera)

30 7 3 5 8

Coffee made using whole beans that I grind at home

25 6 2 4 7

Chilled ready-to-drink coffee (ie Starbucks Frappuccino, Illy Iced Coffee, etc)

24 4 1 3 7

Coffee pods (eg Nespresso) 23 7 2 5 7 Other coffee types (eg One-cup coffee filter bags)

19 4 1 2 5

SOURCE: GMI/MINTEL

FIGURE 73: CONSUMPTION OF COFFEE, JUNE 2013 Base: 2,000 internet users aged 16+ At least

once a month

At least once in the last 6

months

I have drunk this out of

home but not at home, in the past six

months

I have not drunk this

coffee either at home or

out-of-home, in the past six months

% % % %

Any coffee 7 3 2 17 Any instant 7 5 3 21 Any fresh 10 8 10 35 Standard instant coffee (eg Nescafé) 7 4 4 23 Ground coffee (eg Carte Noire) 12 8 11 39 Instant cappuccinos/latte/mocha coffee (ie Kenco 3-in-1, Starbucks Via, etc)

10 7 8 58

Decaffeinated coffee (any type) 7 6 7 63 Whole bean or micro-ground instant coffee (eg Kenco Millicano, Nescafé Azera)

8 6 7 63

Coffee made using whole beans that I grind at home 6 6 17 58 Chilled ready-to-drink coffee (ie Starbucks Frappuccino, Illy Iced Coffee, etc)

8 6 8 68

Coffee pods (eg Nespresso) 5 4 10 67 Other coffee types (eg One-cup coffee filter bags) 6 5 7 74 SOURCE: GMI/MINTEL



FIGURE 74: MOST POPULAR CONSUMPTION OF COFFEE-ANY COFFEE, BY DEMOGRAPHICS, JUNE 2013 Base: 2,000 internet users aged 16+ Sample

size Any


day

2 or more times a

day

Once a day


% % % % %

All 2,000 82 60 37 23 12 Gender: Male 1,000 84 63 39 24 12 Female 1,000 79 57 34 22 12 Age: 16-24 344 69 35 14 21 19 25-34 381 80 60 29 31 12 35-44 379 83 65 42 23 11 45-54 370 85 64 46 18 11 55-64 266 86 66 44 22 10 65+ 260 91 73 49 25 10 16-34 725 74 48 22 26 15 35-54 749 84 65 44 20 11 55+ 526 89 70 46 23 10 Region: Inner and Greater London 271 85 63 31 32 14 South East/East Anglia 496 82 58 35 23 13 South West and Wales 267 82 61 39 21 11 East and West Midlands 326 80 60 41 20 12 North West 204 83 60 36 24 14 Yorkshire and Humberside 172 79 59 38 21 10 North and Scotland 264 79 58 38 21 11 Area: Urban location (ie living in a town/city) 825 83 58 34 24 14 Suburban location (ie close to town/city but living outside a town/city)

791 82 63 38 25 10

Village/Rural location/other 384 79 57 39 18 11 Working status: Employee full-time (30+ hours/week) 812 83 63 38 25 12 Employee part-time (less than 30 hours/week)

298 78 57 36 21 11

Any self-employed 168 86 64 36 28 11 In full-time education 187 65 32 8 24 20 Retired 328 91 73 49 24 9 Not working for any other reason 207 77 53 38 15 12 Socio-economic group: AB 578 86 65 38 27 13 C1 577 78 55 31 24 14 C2 414 85 65 40 25 10 D 290 77 54 37 17 12 E 141 79 58 42 16 9



Highest level of education: No formal qualification* 81 75 52 36 16 7 GCSE/O-level or equivalent 475 83 63 41 21 11 AS/A-level or equivalent 301 77 51 32 19 16 Vocational qualification (eg NVQs, BTEC) 315 79 61 38 23 9 Further qualification (HNCs, HNDs) 146 84 65 40 25 10 University degree (including undergraduate and masters degrees)

575 85 62 34 28 14

Gross annual household income: Under £9,500 145 77 53 32 21 13 £9,500-15,499 296 80 61 40 21 9 £15,500-24,999 391 85 62 41 21 12 £25,000-49,999 730 80 61 35 25 12 £50,000 or over 278 88 67 38 28 14 Don’t know/refused 160 75 42 26 16 16 Housing situation: My home is being bought on a mortgage 722 79 58 36 22 12 My home is owned outright 580 85 66 40 26 12 My home is rented from a local authority 173 82 58 36 21 9 My home is rented from a private landlord 358 82 57 31 26 15 My home is rented from a housing association/others

167 79 54 38 17 10

Presence of own children: Aged 0-4 210 85 61 37 24 16 Aged 5-9 254 86 70 39 30 10 Aged 10-15 364 83 65 40 24 11 Aged 16-18 295 83 62 37 25 12 Any children 786 83 62 37 25 12 No children in household 1,214 81 58 36 22 12 Household size: 1 320 82 62 42 20 11 2 642 83 62 39 24 11 3 444 81 59 34 25 13 4 390 79 55 35 20 14 5 or more 204 82 61 32 28 12 Current marital status: Single 608 72 45 24 21 15 Married/Civil partnership/Living as married 1,163 85 66 41 25 11 Separated, divorced or widowed 229 90 68 48 20 10 Financial situation: Healthy – I have money left at the end of the month for a few luxuries or to add to my savings

479 85 61 39 22 14

OK – I get by, but there’s not a lot left by the time the basics are taken care of

886 82 62 35 27 11

Tight – I’m making ends meet, but only just 468 81 57 37 20 13 Struggling – I’m in danger of falling behind with bills or loan repayments/In trouble – I’ve missed loan repayments or household bills

167 73 54 35 19 8

* small sub-sample (75-100) SOURCE: GMI/MINTEL



FIGURE 75: NEXT MOST POPULAR CONSUMPTION OF COFFEE-ANY COFFEE, BY DEMOGRAPHICS, JUNE 2013 Base: 2,000 internet users aged 16+ Sample

size At least once a month

At least once in

the last 6 months

I have drunk this

out of home but

not at home, in the past

six months




% % % %

All 2,000 7 3 2 17 Gender: Male 1,000 6 3 2 14 Female 1,000 7 3 2 19 Age: 16-24 344 10 5 3 28 25-34 381 6 2 2 19 35-44 379 4 2 1 16 45-54 370 8 2 2 13 55-64 266 6 4 - 13 65+ 260 5 3 1 8 16-34 725 8 3 2 23 35-54 749 6 2 2 15 55+ 526 6 4 1 11 Region: Inner and Greater London 271 3 4 2 13 South East/East Anglia 496 9 3 2 16 South West and Wales 267 7 3 1 17 East and West Midlands 326 5 2 2 17 North West 204 6 3 1 16 Yorkshire and Humberside 172 6 3 2 19 North and Scotland 264 6 4 1 20 Area: Urban location (ie living in a town/city) 825 7 3 2 16 Suburban location (ie close to town/city but living outside a town/city)

791 5 3 1 17

Village/Rural location/other 384 9 2 2 19 Working status: Employee full-time (30+ hours/week) 812 6 2 1 15 Employee part-time (less than 30 hours/week) 298 6 4 2 20 Any self-employed 168 10 2 4 10 In full-time education 187 7 5 3 32 Retired 328 5 4 - 9 Not working for any other reason 207 10 2 1 22 Socio-economic group: AB 578 6 2 2 12 C1 577 5 4 2 21 C2 414 7 3 1 14 D 290 9 2 2 22 E 141 9 4 1 20



Highest level of education: No formal qualification* 81 12 4 1 23 GCSE/O-level or equivalent 475 6 3 1 16 AS/A-level or equivalent 301 6 3 1 22 Vocational qualification (eg NVQs, BTEC) 315 5 4 3 18 Further qualification (HNCs, HNDs) 146 5 3 2 14 University degree (including undergraduate and masters degrees)

575 7 2 1 14

Gross annual household income: Under £9,500 145 8 3 3 21 £9,500-15,499 296 7 4 2 17 £15,500-24,999 391 8 4 1 13 £25,000-49,999 730 5 2 1 18 £50,000 or over 278 5 1 1 12 Don’t know/refused 160 11 7 3 23 Housing situation: My home is being bought on a mortgage 722 6 3 2 20 My home is owned outright 580 5 3 1 13 My home is rented from a local authority 173 8 7 1 17 My home is rented from a private landlord 358 8 3 3 15 My home is rented from a housing association/others

167 13 2 1 20

Presence of own children: Aged 0-4 210 8 - 2 13 Aged 5-9 254 4 2 1 13 Aged 10-15 364 5 2 1 16 Aged 16-18 295 7 2 1 16 Any children 786 6 2 1 16 No children in household 1,214 7 4 2 17 Household size: 1 320 7 3 1 17 2 642 6 4 2 15 3 444 7 3 2 16 4 390 7 3 2 19 5 or more 204 7 2 - 18 Current marital status: Single 608 8 4 3 25 Married/Civil partnership/Living as married 1,163 5 2 1 14 Separated, divorced or widowed 229 8 3 - 10 Financial situation: Healthy – I have money left at the end of the month for a few luxuries or to add to my savings

479 6 3 2 14


886 6 3 2 16

Tight – I’m making ends meet, but only just 468 8 3 - 19 Struggling – I’m in danger of falling behind with bills or loan repayments/In trouble – I’ve missed loan repayments or household bills

167 4 6 2 25




FIGURE 76: MOST POPULAR CONSUMPTION OF COFFEE-ANY INSTANT, BY DEMOGRAPHICS, JUNE 2013 Base: 2,000 internet users aged 16+ Sample

size Any


day

2 or more

times a day

Once a day


% % % % %

All 2,000 77 50 30 20 15

Gender: Male 1,000 79 53 32 21 16 Female 1,000 74 48 28 20 14 Age: 16-24 344 64 28 10 19 20 25-34 381 76 49 22 27 18 35-44 379 80 56 37 20 14 45-54 370 79 55 39 16 13 55-64 266 80 56 36 20 11 65+ 260 81 60 41 19 9 16-34 725 71 39 16 23 19 35-54 749 80 56 38 18 14 55+ 526 80 58 38 20 10 Region: Inner and Greater London 271 82 52 26 26 18 South East/East Anglia 496 76 46 28 18 16 South West and Wales 267 75 50 31 19 13 East and West Midlands 326 77 54 33 21 13 North West 204 79 54 34 20 15 Yorkshire and Humberside 172 73 53 33 20 10 North and Scotland 264 73 48 29 19 13 Area: Urban location (ie living in a town/city) 825 77 48 27 21 17 Suburban location (ie close to town/city but living outside a town/city)

791 78 55 33 22 14

Village/Rural location/other 384 71 46 29 17 11 Working status: Employee full-time (30+ hours/week) 812 80 54 31 22 17 Employee part-time (less than 30 hours/week) 298 73 47 30 17 13 Any self-employed 168 80 54 29 25 13 In full-time education 187 59 26 6 19 21 Retired 328 81 60 39 21 9 Not working for any other reason 207 73 46 33 13 14 Socio-economic group: AB 578 78 52 30 22 16 C1 577 73 46 26 20 16 C2 414 81 54 33 22 13 D 290 74 50 34 17 12 E 141 75 50 34 16 11




575 79 49 25 24 18


167 76 50 33 17 10


479 78 50 30 21 16


886 77 52 30 22 14


167 71 48 31 17 11




FIGURE 77: NEXT MOST POPULAR CONSUMPTION OF COFFEE-ANY INSTANT, BY DEMOGRAPHICS, JUNE 2013 Base: 2,000 internet users aged 16+ Sample


At least once in

the last 6 months**

I have drunk this

out of home but not at home, in

the past six months




% % % %

All 2,000 7 5 3 21

Gender: Male 1,000 6 5 3 18 Female 1,000 7 5 2 24 Age: 16-24 344 10 6 3 33 25-34 381 6 4 2 21 35-44 379 6 3 2 18 45-54 370 7 4 3 18 55-64 266 6 7 3 18 65+ 260 5 6 3 17 16-34 725 8 5 2 27 35-54 749 6 4 2 18 55+ 526 6 6 3 17 Region: Inner and Greater London 271 6 7 1 17 South East/East Anglia 496 8 6 2 22 South West and Wales 267 7 4 2 24 East and West Midlands 326 6 4 2 21 North West 204 7 3 2 19 Yorkshire and Humberside 172 5 5 5 23 North and Scotland 264 6 5 4 23 Area: Urban location (ie living in a town/city) 825 7 5 2 20 Suburban location (ie close to town/city but living outside a town/city)

791 5 4 2 20

Village/Rural location/other 384 9 5 4 25 Working status: Employee full-time (30+ hours/week) 812 6 4 2 18 Employee part-time (less than 30 hours/week)

298 7 6 3 24

Any self-employed 168 9 5 4 16 In full-time education 187 7 5 4 37 Retired 328 5 7 3 16 Not working for any other reason 207 9 4 2 25 Socio-economic group: AB 578 6 5 4 18 C1 577 5 6 3 24 C2 414 8 5 1 18 D 290 8 3 2 24 E 141 10 5 1 23




575 6 5 2 19


167 13 3 1 23

Presence of own children: Aged 0-4 210 7 2 1 16 Aged 5-9 254 6 2 3 14 Aged 10-15 364 5 4 2 18 Aged 16-18 295 7 4 1 19 Any children 786 7 3 2 18 No children in household 1,214 7 6 3 23 Household size: 1 320 7 5 2 22 2 642 6 6 3 21 3 444 7 5 2 20 4 390 7 4 3 23 5 or more 204 9 2 1 19 Current marital status: Single 608 8 5 3 29 Married/Civil partnership/Living as married 1,163 6 5 2 18 Separated, divorced or widowed 229 7 5 1 15 Financial situation: Healthy – I have money left at the end of the month for a few luxuries or to add to my savings

479 6 6 2 19


886 6 4 3 20

Tight – I’m making ends meet, but only just 468 8 4 1 23 Struggling – I’m in danger of falling behind with bills or loan repayments/In trouble – I’ve missed loan repayments or household bills

167 5 7 2 27

* small sub-sample (75-100) ** low response rate (75-100) SOURCE: GMI/MINTEL



FIGURE 78: MOST POPULAR CONSUMPTION OF COFFEE-ANY FRESH, BY DEMOGRAPHICS, JUNE 2013 Base: 2,000 internet users aged 16+ Sample

size Any


day

2 or more

times a day

Once a day


% % % % %


791 53 18 5 12 17





575 65 29 10 19 18


167 48 13 6 7 17


479 63 27 10 17 16


886 56 23 7 15 17


167 43 16 7 9 10




FIGURE 79: NEXT MOST POPULAR CONSUMPTION OF COFFEE-ANY FRESH, BY DEMOGRAPHICS, JUNE 2013 Base: 2,000 internet users aged 16+ Sample


At least once in

the last 6 months

I have drunk this

out of home but


six months




% % % %

All 2,000 10 8 9 35 Gender: Male 1,000 11 8 9 30 Female 1,000 9 8 10 40 Age: 16-24 344 11 5 7 44 25-34 381 8 7 7 29 35-44 379 9 6 9 35 45-54 370 11 9 10 34 55-64 266 12 12 9 32 65+ 260 10 10 16 34 16-34 725 10 6 7 36 35-54 749 10 7 9 35 55+ 526 11 11 13 33 Region: Inner and Greater London 271 8 7 7 27 South East/East Anglia 496 12 9 8 35 South West and Wales 267 10 7 12 34 East and West Midlands 326 10 7 8 37 North West 204 9 9 10 38 Yorkshire and Humberside 172 10 8 13 35 North and Scotland 264 9 9 11 39 Area: Urban location (ie living in a town/city) 825 9 8 8 32 Suburban location (ie close to town/city but living outside a town/city)

791 10 8 10 37


298 8 10 8 40

Any self-employed 168 16 8 11 25 In full-time education 187 9 5 9 48 Retired 328 9 9 14 35 Not working for any other reason 207 11 6 11 46 Socio-economic group: AB 578 11 8 11 24 C1 577 9 7 8 37 C2 414 12 9 10 31 D 290 7 8 10 50 E 141 11 6 6 54




575 12 6 9 25


167 7 11 7 46

Presence of own children: Aged 0-4 210 10 5 9 26 Aged 5-9 254 9 3 7 28 Aged 10-15 364 9 5 7 32 Aged 16-18 295 9 8 8 33 Any children 786 9 6 8 30 No children in household 1,214 11 9 10 38 Household size: 1 320 10 8 12 42 2 642 10 10 11 33 3 444 9 8 8 33 4 390 12 7 8 34 5 or more 204 11 3 7 34 Current marital status: Single 608 10 6 9 44 Married/Civil partnership/Living as married 1,163 11 8 9 30 Separated, divorced or widowed 229 9 12 13 37 Financial situation: Healthy – I have money left at the end of the month for a few luxuries or to add to my savings

479 12 8 10 27


886 9 8 10 35


167 11 5 11 46




FIGURE 80: MOST POPULAR CONSUMPTION OF COFFEE-STANDARD INSTANT COFFEE (EG NESCAFÉ), BY DEMOGRAPHICS, JUNE 2013 Base: 2,000 internet users aged 16+ Sample

size Any


day

2 or more

times a day

Once a day


% % % % %


791 74 52 32 20 14





575 76 45 23 22 18


167 74 47 30 17 11


479 75 47 28 19 16


886 74 49 28 21 15


167 67 46 31 16 11




FIGURE 81: NEXT MOST POPULAR CONSUMPTION OF COFFEE-STANDARD INSTANT COFFEE (EG NESCAFÉ), BY DEMOGRAPHICS, JUNE 2013 Base: 2,000 internet users aged 16+ Sample

size At

least once a month

At least once in the

last 6 months**

I have drunk this


the past six months


coffee either at home or out-of-

home, in the past six

months % % % %


791 6 3 3 22


298 7 4 4 28

Any self-employed 168 10 5 4 20 In full-time education 187 7 5 3 41 Retired 328 5 6 5 17 Not working for any other reason 207 10 3 2 28



Socio-economic group: AB 578 6 4 4 21 C1 577 5 5 3 27 C2 414 9 4 3 20 D 290 8 4 3 25 E 141 11 3 4 25 Highest level of education: No formal qualification* 81 11 4 1 31 GCSE/O-level or equivalent 475 6 3 4 21 AS/A-level or equivalent 301 7 4 2 30 Vocational qualification (eg NVQs, BTEC)

315 8 4 3 24

Further qualification (HNCs, HNDs) 146 8 4 5 21 University degree (including undergraduate and masters degrees)

575 7 5 3 20

Gross annual household income: Under £9,500 145 8 6 4 27 £9,500-15,499 296 8 4 4 23 £15,500-24,999 391 8 4 4 22 £25,000-49,999 730 7 4 3 23 £50,000 or over 278 5 4 3 19 Don’t know/refused 160 9 6 4 32 Housing situation: My home is being bought on a mortgage 722 7 3 3 25 My home is owned outright 580 5 5 3 21 My home is rented from a local authority 173 8 9 5 21 My home is rented from a private landlord

358 8 3 5 23

My home is rented from a housing association/others

167 13 2 2 24

Presence of own children: Aged 0-4 210 8 2 2 17 Aged 5-9 254 7 2 4 16 Aged 10-15 364 7 3 2 21 Aged 16-18 295 6 4 2 20 Any children 786 7 3 2 20 No children in household 1,214 7 5 4 25 Household size: 1 320 8 4 4 23 2 642 6 5 4 25 3 444 7 6 2 21 4 390 7 3 4 25 5 or more 204 10 2 2 21 Current marital status: Single 608 9 5 3 31 Married/Civil partnership/Living as married

1,163 6 4 4 20

Separated, divorced or widowed 229 7 5 3 17



Financial situation: Healthy – I have money left at the end of the month for a few luxuries or to add to my savings

479 6 6 3 22


886 7 4 4 22

Tight – I’m making ends meet, but only just

468 9 3 3 25

Struggling – I’m in danger of falling behind with bills or loan repayments/In trouble – I’ve missed loan repayments or household bills

167 6 4 4 29


FIGURE 82: MOST POPULAR CONSUMPTION OF COFFEE-GROUND COFFEE (EG CARTE NOIRE), BY DEMOGRAPHICS, JUNE 2013 Base: 2,000 internet users aged 16+ Sample

size Any


day

2 or more

times a day

Once a day


% % % % %


791 48 12 4 7 16

Village/Rural location/other 384 47 15 8 7 10



Working status: Employee full-time (30+ hours/week) 812 57 18 7 11 17 Employee part-time (less than 30 hours/week) 298 47 17 6 11 11 Any self-employed 168 59 17 6 11 16 In full-time education 187 37 7 2 5 15 Retired 328 45 14 7 6 13 Not working for any other reason 207 39 11 4 6 12 Socio-economic group: AB 578 57 20 8 12 16 C1 577 50 14 5 9 16 C2 414 54 16 6 10 14 D 290 36 12 4 7 10 E 141 36 10 7 3 9 Highest level of education: No formal qualification* 81 30 5 5 - 7 GCSE/O-level or equivalent 475 45 13 4 9 12 AS/A-level or equivalent 301 47 15 5 10 15 Vocational qualification (eg NVQs, BTEC) 315 44 13 6 7 10 Further qualification (HNCs, HNDs) 146 55 21 11 10 17 University degree (including undergraduate and masters degrees)

575 59 20 7 12 18


167 44 10 4 5 14

Presence of own children: Aged 0-4 210 59 20 6 14 19 Aged 5-9 254 61 29 13 17 17 Aged 10-15 364 57 21 9 13 19 Aged 16-18 295 53 19 9 10 19 Any children 786 56 20 8 13 18 No children in household 1,214 46 12 5 7 12 Household size: 1 320 43 12 4 7 12 2 642 49 15 7 8 12 3 444 53 16 6 10 18 4 390 52 17 6 11 16 5 or more 204 53 21 7 13 15 Current marital status: Single 608 43 11 3 8 13 Married/Civil partnership/Living as married 1,163 55 19 8 11 15 Separated, divorced or widowed 229 45 11 7 3 13




479 56 19 7 12 15


886 50 16 5 10 16


167 37 11 5 6 11


FIGURE 83: NEXT MOST POPULAR CONSUMPTION OF COFFEE-GROUND COFFEE (EG CARTE NOIRE), BY DEMOGRAPHICS, JUNE

2013 Base: 2,000 internet users aged 16+ Sample


At least once in

the last 6 months

I have drunk this


the past six months




% % % %


791 11 9 11 41

Village/Rural location/other 384 13 9 12 40



Working status: Employee full-time (30+ hours/week) 812 13 9 8 35 Employee part-time (less than 30 hours/week)

298 9 9 9 44

Any self-employed 168 18 8 11 30 In full-time education 187 9 6 11 52 Retired 328 10 9 17 38 Not working for any other reason 207 11 5 13 49 Socio-economic group: AB 578 13 8 12 30 C1 577 12 7 10 41 C2 414 13 10 12 34 D 290 7 7 10 54 E 141 11 6 8 56 Highest level of education: No formal qualification* 81 5 12 14 57 GCSE/O-level or equivalent 475 12 8 11 44 AS/A-level or equivalent 301 13 5 8 45 Vocational qualification (eg NVQs, BTEC) 315 10 11 11 44 Further qualification (HNCs, HNDs) 146 5 12 12 34 University degree (including undergraduate and masters degrees)

575 14 7 11 30


167 9 11 5 51

Presence of own children: Aged 0-4 210 14 6 10 32 Aged 5-9 254 11 4 9 31 Aged 10-15 364 10 6 9 35 Aged 16-18 295 8 8 11 36 Any children 786 11 7 10 34 No children in household 1,214 12 9 11 43 Household size: 1 320 12 8 12 46 2 642 12 10 13 38 3 444 9 9 9 38 4 390 13 7 9 39 5 or more 204 14 4 10 37 Current marital status: Single 608 12 7 10 48 Married/Civil partnership/Living as married 1,163 12 8 11 35 Separated, divorced or widowed 229 10 11 13 42




479 13 9 12 32


886 11 8 11 39


167 11 4 11 51


FIGURE 84: MOST POPULAR CONSUMPTION OF COFFEE-INSTANT CAPPUCCINOS/LATTE/MOCHA COFFEE (IE KENCO 3-IN-1, STARBUCKS VIA, ETC), BY DEMOGRAPHICS, JUNE 2013 Base: 2,000 internet users aged 16+ Sample

size Any


day

2 or more

times a day

Once a day


% % % % %

All 2,000 34 6 1 5 10 Gender: Male 1,000 34 6 2 5 10 Female 1,000 34 6 - 6 11 Age: 16-24 344 37 6 1 5 11 25-34 381 45 12 2 10 13 35-44 379 37 8 2 6 11 45-54 370 29 2 - 1 10 55-64 266 28 5 - 5 7 65+ 260 21 4 - 4 6 16-34 725 41 9 2 7 12 35-54 749 33 5 1 4 11 55+ 526 24 5 - 4 6 Region: Inner and Greater London 271 45 13 4 9 12 South East/East Anglia 496 29 5 1 4 9 South West and Wales 267 33 3 1 3 10 East and West Midlands 326 38 8 1 7 11 North West 204 31 4 1 3 14 Yorkshire and Humberside 172 24 5 - 5 8 North and Scotland 264 34 6 1 5 7 Area: Urban location (ie living in a town/city) 825 39 9 2 7 11 Suburban location (ie close to town/city but living outside a town/city)

791 33 6 1 5 11

Village/Rural location/other 384 25 3 - 3 6



Working status: Employee full-time (30+ hours/week) 812 43 9 2 7 14 Employee part-time (less than 30 hours/week) 298 33 5 1 4 10 Any self-employed 168 30 7 - 7 8 In full-time education 187 32 3 1 2 10 Retired 328 21 5 - 5 4 Not working for any other reason 207 23 3 - 3 7 Socio-economic group: AB 578 34 8 2 6 11 C1 577 33 6 1 6 8 C2 414 37 6 1 5 11 D 290 33 3 1 2 11 E 141 24 5 - 5 5 Highest level of education: No formal qualification* 81 21 7 1 6 4 GCSE/O-level or equivalent 475 33 5 1 3 10 AS/A-level or equivalent 301 32 6 - 6 9 Vocational qualification (eg NVQs, BTEC) 315 33 5 1 4 9 Further qualification (HNCs, HNDs) 146 29 5 1 3 9 University degree (including undergraduate and masters degrees)

575 38 9 1 8 13

Gross annual household income: Under £9,500 145 30 7 1 6 8 £9,500-15,499 296 31 4 1 4 7 £15,500-24,999 391 31 5 1 4 12 £25,000-49,999 730 38 8 2 6 11 £50,000 or over 278 36 7 - 7 12 Don’t know/refused 160 26 5 1 4 6 Housing situation: My home is being bought on a mortgage 722 34 6 1 5 11 My home is owned outright 580 30 5 1 4 8 My home is rented from a local authority 173 29 6 2 4 7 My home is rented from a private landlord 358 39 8 1 7 12 My home is rented from a housing association/others

167 37 8 2 6 11

Presence of own children: Aged 0-4 210 50 15 3 12 17 Aged 5-9 254 49 17 4 13 14 Aged 10-15 364 46 11 3 8 15 Aged 16-18 295 35 7 2 5 11 Any children 786 42 10 2 8 14 No children in household 1,214 28 4 - 4 7 Household size: 1 320 26 3 - 3 6 2 642 27 4 1 3 7 3 444 38 6 1 6 14 4 390 39 8 2 6 12 5 or more 204 47 16 4 12 13 Current marital status: Single 608 34 4 1 3 10 Married/Civil partnership/Living as married 1,163 34 8 1 6 10 Separated, divorced or widowed 229 30 4 - 4 8




479 35 9 2 7 9


886 35 6 1 5 12


167 22 4 1 3 4


FIGURE 85: NEXT MOST POPULAR CONSUMPTION OF COFFEE-INSTANT CAPPUCCINOS/LATTE/MOCHA COFFEE (IE KENCO 3-IN-1, STARBUCKS VIA, ETC), BY DEMOGRAPHICS, JUNE 2013 Base: 2,000 internet users aged 16+ Sample



last 6 months

I have drunk this

out of home but


six months



home, in the past

six months % % % %


791 10 6 9 58





298 11 7 7 59


575 9 8 7 55


167 10 8 7 56





479 12 6 9 56


886 9 8 9 56


468 10 8 7 60


167 7 7 9 69


FIGURE 86: MOST POPULAR CONSUMPTION OF COFFEE-DECAFFEINATED COFFEE (ANY TYPE), BY DEMOGRAPHICS, JUNE 2013 Base: 2,000 internet users aged 16+ Sample

size Any


day

2 or more

times a day**

Once a day


% % % % %


791 30 11 4 7 7




Working status: Employee full-time (30+ hours/week) 812 31 10 4 6 10 Employee part-time (less than 30 hours/week)

298 26 8 2 6 6

Any self-employed 168 37 12 7 5 8 In full-time education 187 29 5 2 4 9 Retired 328 32 13 8 4 5 Not working for any other reason 207 25 8 6 2 6 Socio-economic group: AB 578 35 13 6 7 9 C1 577 31 9 3 6 9 C2 414 29 9 5 4 7 D 290 23 7 4 3 8 E 141 25 11 7 4 4 Highest level of education: No formal qualification* 81 22 6 4 2 4 GCSE/O-level or equivalent 475 26 9 5 4 6 AS/A-level or equivalent 301 32 9 4 6 8 Vocational qualification (eg NVQs, BTEC) 315 29 10 4 5 6 Further qualification (HNCs, HNDs) 146 25 5 2 3 8 University degree (including undergraduate and masters degrees)

575 35 11 5 7 11


167 29 7 2 5 9

Presence of own children: Aged 0-4 210 50 19 7 12 15 Aged 5-9 254 43 19 7 12 11 Aged 10-15 364 36 13 5 8 9 Aged 16-18 295 34 11 4 6 9 Any children 786 38 13 5 8 11 No children in household 1,214 25 8 4 4 6 Household size: 1 320 24 8 4 4 5 2 642 27 9 5 4 5 3 444 32 9 4 6 10 4 390 33 10 4 6 9 5 or more 204 43 16 6 10 11 Current marital status: Single 608 28 6 2 4 8 Married/Civil partnership/Living as married 1,163 32 12 6 6 8 Separated, divorced or widowed 229 27 8 3 5 6




479 35 13 6 7 7


886 32 9 4 6 9


167 15 4 2 2 4


FIGURE 87: NEXT MOST POPULAR CONSUMPTION OF COFFEE-DECAFFEINATED COFFEE (ANY TYPE), BY DEMOGRAPHICS, JUNE 2013 Base: 2,000 internet users aged 16+ Sample


At least once in the last

6 months

I have drunk this out of

home but not at home, in the past six

months



out-of-home, in the past six

months % % % %


791 6 6 7 63




Working status: Employee full-time (30+ hours/week) 812 7 5 8 61 Employee part-time (less than 30 hours/week) 298 5 6 9 64 Any self-employed 168 11 7 5 58 In full-time education 187 8 7 6 65 Retired 328 8 6 4 64 Not working for any other reason 207 3 7 6 69 Socio-economic group: AB 578 8 6 8 57 C1 577 7 7 6 63 C2 414 8 5 10 62 D 290 5 4 7 70 E 141 4 6 4 72 Highest level of education: No formal qualification* 81 4 9 2 75 GCSE/O-level or equivalent 475 6 6 8 66 AS/A-level or equivalent 301 8 7 5 63 Vocational qualification (eg NVQs, BTEC) 315 6 7 7 65 Further qualification (HNCs, HNDs) 146 5 6 10 65 University degree (including undergraduate and masters degrees)

575 9 5 7 57


167 6 7 7 65

Presence of own children: Aged 0-4 210 9 7 6 44 Aged 5-9 254 8 4 9 48 Aged 10-15 364 9 5 9 56 Aged 16-18 295 6 8 7 59 Any children 786 8 6 8 54 No children in household 1,214 6 6 6 68 Household size: 1 320 5 6 6 70 2 642 6 6 7 67 3 444 8 4 8 60 4 390 7 7 7 59 5 or more 204 8 8 7 50



Current marital status: Single 608 8 6 6 66 Married/Civil partnership/Living as married 1,163 7 6 8 60 Separated, divorced or widowed 229 6 7 7 66 Financial situation: Healthy – I have money left at the end of the month for a few luxuries or to add to my savings

479 9 5 6 59


886 7 7 7 61


167 2 5 8 77


FIGURE 88: MOST POPULAR CONSUMPTION OF COFFEE-WHOLE BEAN OR MICRO-GROUND INSTANT COFFEE (EG KENCO

MILLICANO, NESCAFÉ AZERA), BY DEMOGRAPHICS, JUNE 2013 Base: 2,000 internet users aged 16+ Sample

size Any


day

2 or more times a

day

Once a day**


% % % % %


791 30 8 2 6 8





298 32 9 2 7 6

Any self-employed 168 32 8 2 5 7 In full-time education 187 28 5 - 5 11 Retired 328 15 4 2 2 3 Not working for any other reason 207 27 6 3 3 5 Socio-economic group: AB 578 31 7 3 4 9 C1 577 32 10 3 7 8 C2 414 31 7 2 5 8 D 290 26 6 2 4 8 E 141 23 4 3 1 4 Highest level of education: No formal qualification* 81 19 4 - 4 2 GCSE/O-level or equivalent 475 28 6 3 3 8 AS/A-level or equivalent 301 32 7 2 5 9 Vocational qualification (eg NVQs, BTEC)

315 27 8 3 5 6

Further qualification (HNCs, HNDs) 146 28 4 1 3 10 University degree (including undergraduate and masters degrees)

575 34 9 3 6 9

Gross annual household income: Under £9,500 145 26 8 3 5 7 £9,500-15,499 296 26 6 2 4 6 £15,500-24,999 391 31 7 2 5 9 £25,000-49,999 730 32 9 3 6 9 £50,000 or over 278 36 6 1 5 9 Don’t know/refused 160 21 5 2 3 3 Housing situation: My home is being bought on a mortgage 722 33 9 3 5 9 My home is owned outright 580 25 6 2 4 7 My home is rented from a local authority 173 26 7 3 4 9 My home is rented from a private landlord

358 33 6 1 5 9


167 32 10 4 5 5

Presence of own children: Aged 0-4 210 44 16 4 12 14 Aged 5-9 254 47 16 6 10 13 Aged 10-15 364 41 12 5 7 12 Aged 16-18 295 32 8 2 6 10 Any children 786 38 11 4 7 12 No children in household 1,214 25 5 2 3 5 Household size: 1 320 24 4 2 3 7 2 642 23 6 3 4 3 3 444 34 9 3 6 11 4 390 35 7 2 5 11 5 or more 204 42 13 4 9 11



Current marital status: Single 608 30 5 1 4 9 Married/Civil partnership/Living as married

1,163 31 9 3 6 8

Separated, divorced or widowed 229 24 5 2 3 6 Financial situation: Healthy – I have money left at the end of the month for a few luxuries or to add to my savings

479 31 8 3 6 10


886 32 8 3 6 8


468 27 6 3 3 7


167 23 4 1 3 5


FIGURE 89: NEXT MOST POPULAR CONSUMPTION OF COFFEE-WHOLE BEAN OR MICRO-GROUND INSTANT COFFEE (EG KENCO

MILLICANO, NESCAFÉ AZERA), BY DEMOGRAPHICS, JUNE 2013 Base: 2,000 internet users aged 16+ Sample



last 6 months

I have drunk this out of home but

not at home, in the past six months



out-of-home, in the past six

months % % % %

All 2,000 8 6 7 63 Gender: Male 1,000 8 6 7 62 Female 1,000 9 7 7 64 Age: 16-24 344 10 7 7 62 25-34 381 9 6 7 54 35-44 379 7 5 8 60 45-54 370 10 8 8 61 55-64 266 8 8 7 68 65+ 260 3 5 5 80 16-34 725 10 6 7 58 35-54 749 9 6 8 61 55+ 526 6 6 6 74



Region: Inner and Greater London 271 11 10 8 48 South East/East Anglia 496 8 5 7 67 South West and Wales 267 7 8 7 64 East and West Midlands 326 8 6 7 60 North West 204 11 5 6 64 Yorkshire and Humberside 172 5 4 7 70 North and Scotland 264 7 5 8 68 Area: Urban location (ie living in a town/city) 825 9 6 7 59 Suburban location (ie close to town/city but living outside a town/city)

791 8 6 7 63


298 9 8 7 61

Any self-employed 168 10 8 10 59 In full-time education 187 7 5 6 66 Retired 328 3 5 5 79 Not working for any other reason 207 8 7 6 68 Socio-economic group: AB 578 9 6 7 62 C1 577 8 6 7 61 C2 414 10 7 10 59 D 290 7 5 4 70 E 141 6 9 3 74 Highest level of education: No formal qualification* 81 4 9 2 79 GCSE/O-level or equivalent 475 8 6 7 65 AS/A-level or equivalent 301 9 8 8 60 Vocational qualification (eg NVQs, BTEC)

315 7 7 5 68


575 11 5 8 58


358 11 7 7 60


167 12 5 3 65




1,163 8 6 8 61

Separated, divorced or widowed 229 10 4 6 69 Financial situation: Healthy – I have money left at the end of the month for a few luxuries or to add to my savings

479 8 5 8 61


886 8 8 8 60


468 10 4 6 67


167 5 8 4 73




FIGURE 90: MOST POPULAR CONSUMPTION OF COFFEE – COFFEE MADE USING WHOLE BEANS THAT I GRIND AT HOME, BY

DEMOGRAPHICS, JUNE 2013 Base: 2,000 internet users aged 16+ Sample

size Any


day

2 or more

times a day

Once a day**


% % % % %

All 2,000 25 6 2 4 7 Gender: Male 1,000 30 8 2 5 9 Female 1,000 20 5 1 3 6 Age: 16-24 344 32 6 2 4 12 25-34 381 35 13 3 10 10 35-44 379 27 5 1 4 9 45-54 370 18 5 2 3 4 55-64 266 18 3 2 2 2 65+ 260 14 2 2 1 3 16-34 725 34 10 2 7 11 35-54 749 23 5 2 3 7 55+ 526 16 3 2 1 3 Region: Inner and Greater London 271 41 12 3 9 14 South East/East Anglia 496 22 5 2 3 6 South West and Wales 267 21 3 - 3 5 East and West Midlands 326 24 6 2 4 6 North West 204 23 4 1 3 8 Yorkshire and Humberside 172 22 4 1 3 9 North and Scotland 264 23 8 3 5 5 Area: Urban location (ie living in a town/city) 825 31 9 3 6 9 Suburban location (ie close to town/city but living outside a town/city)

791 22 4 1 4 6

Village/Rural location/other 384 17 3 1 2 4 Working status: Employee full-time (30+ hours/week) 812 34 9 2 6 11 Employee part-time (less than 30 hours/week) 298 21 7 2 4 3 Any self-employed 168 24 7 1 5 5 In full-time education 187 26 3 1 2 12 Retired 328 14 2 2 1 2 Not working for any other reason 207 12 3 1 2 5 Socio-economic group: AB 578 33 10 3 7 8 C1 577 23 6 1 5 7 C2 414 26 5 2 3 9 D 290 16 1 1 - 6 E 141 13 2 1 1 4



Highest level of education: No formal qualification* 81 12 - - - 4 GCSE/O-level or equivalent 475 19 3 1 1 7 AS/A-level or equivalent 301 25 4 2 3 9 Vocational qualification (eg NVQs, BTEC) 315 19 3 2 2 4 Further qualification (HNCs, HNDs) 146 26 7 1 6 5 University degree (including undergraduate and masters degrees)

575 34 12 3 9 9


167 20 5 2 3 3


479 30 9 2 6 9


886 27 7 2 5 8


167 14 3 1 2 2




FIGURE 91: NEXT MOST POPULAR CONSUMPTION OF COFFEE – COFFEE MADE USING WHOLE BEANS THAT I GRIND AT HOME, BY



At least once in

the last 6 months

I have drunk this

out of home but


six months



home, in the past six months

% % % %


791 5 5 18 60


298 5 6 18 61




Socio-economic group: AB 578 8 7 19 48 C1 577 5 5 16 61 C2 414 6 6 19 54 D 290 4 5 14 70 E 141 4 4 13 73 Highest level of education: No formal qualification* 81 4 5 10 78 GCSE/O-level or equivalent 475 4 5 18 63 AS/A-level or equivalent 301 6 6 15 59 Vocational qualification (eg NVQs, BTEC) 315 5 6 16 65 Further qualification (HNCs, HNDs) 146 5 9 23 51 University degree (including undergraduate and masters degrees)

575 8 6 18 49


167 7 6 10 69





479 6 5 18 52


886 6 6 18 56


167 3 7 17 68


FIGURE 92: MOST POPULAR CONSUMPTION OF COFFEE-CHILLED READY-TO-DRINK COFFEE (IE STARBUCKS FRAPPUCCINO, ILLY

ICED COFFEE, ETC), BY DEMOGRAPHICS, JUNE 2013 Base: 2,000 internet users aged 16+ Sample

size Any

usage At least once a day**

2 or more

times a day

Once a day


% % % % %

All 2,000 24 4 1 3 7 Gender: Male 1,000 26 5 1 4 8 Female 1,000 23 3 - 3 6 Age: 16-24 344 39 7 2 6 10 25-34 381 40 9 1 8 14 35-44 379 25 4 1 3 9 45-54 370 15 1 - 1 4 55-64 266 9 - - - 2 65+ 260 9 - - - 1 16-34 725 39 8 2 7 12 35-54 749 20 3 - 2 6 55+ 526 9 - - - 1 Region: Inner and Greater London 271 44 10 2 8 14 South East/East Anglia 496 21 2 - 2 7 South West and Wales 267 19 4 - 3 4 East and West Midlands 326 22 4 1 3 7 North West 204 25 3 - 3 10 Yorkshire and Humberside 172 17 3 1 2 2 North and Scotland 264 22 3 - 2 6 Area: Urban location (ie living in a town/city) 825 32 7 1 5 9 Suburban location (ie close to town/city but living outside a town/city)

791 21 3 - 3 7

Village/Rural location/other 384 13 1 - - 2




298 22 4 1 3 6

Any self-employed 168 19 4 1 4 5 In full-time education 187 37 5 1 4 10 Retired 328 9 1 - - 1 Not working for any other reason 207 14 - - - 2 Socio-economic group: AB 578 28 5 1 4 10 C1 577 26 6 1 5 6 C2 414 24 3 - 3 7 D 290 21 1 - 1 7 E 141 9 1 - 1 1 Highest level of education: No formal qualification* 81 12 - - - 4 GCSE/O-level or equivalent 475 19 2 - 2 6 AS/A-level or equivalent 301 29 4 1 3 9 Vocational qualification (eg NVQs, BTEC) 315 20 2 - 2 3 Further qualification (HNCs, HNDs) 146 19 5 1 4 8 University degree (including undergraduate and masters degrees)

575 31 6 1 5 10

Gross annual household income: Under £9,500 145 27 2 1 1 7 £9,500-15,499 296 22 2 1 1 5 £15,500-24,999 391 19 4 - 4 7 £25,000-49,999 730 26 4 1 3 8 £50,000 or over 278 34 7 1 6 12 Don’t know/refused 160 16 3 1 2 2 Housing situation: My home is being bought on a mortgage 722 25 5 1 4 8 My home is owned outright 580 19 3 - 2 6 My home is rented from a local authority 173 18 4 1 3 4 My home is rented from a private landlord 358 35 4 - 4 9 My home is rented from a housing association/others

167 23 4 2 2 8

Presence of own children: Aged 0-4 210 48 12 3 9 19 Aged 5-9 254 41 14 2 11 15 Aged 10-15 364 35 8 2 6 14 Aged 16-18 295 26 5 2 3 8 Any children 786 34 8 2 6 12 No children in household 1,214 18 1 - 1 4 Household size: 1 320 17 1 - 1 4 2 642 16 1 - 1 4 3 444 29 6 1 5 7 4 390 29 4 - 4 11 5 or more 204 42 12 3 9 14 Current marital status: Single 608 29 4 1 3 8 Married/Civil partnership/Living as married 1,163 23 4 1 4 8 Separated, divorced or widowed 229 17 2 - 2 3




479 29 8 2 6 8


886 26 4 - 3 9


167 12 - - - 2


FIGURE 93: NEXT MOST POPULAR CONSUMPTION OF COFFEE-CHILLED READY-TO-DRINK COFFEE (IE STARBUCKS

FRAPPUCCINO, IILY ICED COFFEE, ETC), BY DEMOGRAPHICS, JUNE 2013 Base: 2,000 internet users aged 16+ Sample


At least once in

the last 6 months






% % % %


791 6 5 8 71





298 7 6 8 70

Any self-employed 168 7 3 10 71 In full-time education 187 12 11 10 53 Retired 328 3 4 5 86 Not working for any other reason 207 5 7 7 79 Socio-economic group: AB 578 9 5 9 63 C1 577 8 7 8 66 C2 414 8 5 11 65 D 290 7 7 5 74 E 141 4 4 4 87 Highest level of education: No formal qualification* 81 4 5 5 83 GCSE/O-level or equivalent 475 7 4 7 74 AS/A-level or equivalent 301 9 8 8 63 Vocational qualification (eg NVQs, BTEC)

315 9 6 6 74


575 9 5 10 59


358 13 8 10 55


167 7 5 7 69

Presence of own children: Aged 0-4 210 10 7 6 46 Aged 5-9 254 8 3 10 49 Aged 10-15 364 10 3 9 57 Aged 16-18 295 9 4 10 64 Any children 786 9 5 9 57 No children in household 1,214 7 6 8 74 Household size: 1 320 7 6 7 76 2 642 5 6 7 77 3 444 9 6 9 62 4 390 9 6 11 59 5 or more 204 13 3 6 52



Current marital status: Single 608 10 7 9 62 Married/Civil partnership/Living as married

1,163 6 5 8 68

Separated, divorced or widowed 229 8 4 4 79 Financial situation: Healthy – I have money left at the end of the month for a few luxuries or to add to my savings

479 9 5 9 63


886 8 6 8 66


468 7 6 8 72


167 5 4 9 79


FIGURE 94: MOST POPULAR CONSUMPTION OF COFFEE-COFFEE PODS (EG NESPRESSO), BY DEMOGRAPHICS, JUNE 2013 Base: 2,000 internet users aged 16+ Sample

size Any

usage At least

once a day 2 or more

times a day

Once a day


% % % % %

All 2,000 23 7 2 5 7 Gender: Male 1,000 26 7 2 6 9 Female 1,000 20 6 2 5 5 Age: 16-24 344 26 6 - 6 9 25-34 381 35 12 4 8 12 35-44 379 29 9 2 7 8 45-54 370 17 4 1 3 6 55-64 266 17 5 3 2 3 65+ 260 10 3 - 3 2 16-34 725 31 9 2 7 10 35-54 749 23 7 1 5 7 55+ 526 13 4 1 3 2 Region: Inner and Greater London 271 40 13 4 9 11 South East/East Anglia 496 21 6 2 4 6 South West and Wales 267 19 5 1 4 7 East and West Midlands 326 26 8 2 6 9 North West 204 22 6 - 5 6 Yorkshire and Humberside 172 15 3 1 2 5 North and Scotland 264 18 5 1 4 5



Area: Urban location (ie living in a town/city)

825 29 8 2 6 9

Suburban location (ie close to town/city but living outside a town/city)

791 22 6 1 5 6

Village/Rural location/other 384 15 5 2 4 4 Working status: Employee full-time (30+ hours/week)

812 33 10 3 7 11

Employee part-time (less than 30 hours/week)

298 20 7 2 5 4

Any self-employed 168 24 6 2 4 8 In full-time education 187 19 3 1 3 9 Retired 328 11 3 1 3 2 Not working for any other reason 207 11 4 - 4 1 Socio-economic group: AB 578 30 11 3 8 8 C1 577 23 7 2 5 8 C2 414 23 6 1 5 7 D 290 17 3 - 2 7 E 141 13 2 - 2 1 Highest level of education: No formal qualification* 81 11 2 - 2 2 GCSE/O-level or equivalent 475 18 6 1 5 5 AS/A-level or equivalent 301 22 6 2 4 7 Vocational qualification (eg NVQs, BTEC)

315 20 4 2 2 7

Further qualification (HNCs, HNDs) 146 25 4 - 4 7 University degree (including undergraduate and masters degrees)

575 31 11 3 8 9

Gross annual household income: Under £9,500 145 16 5 1 3 6 £9,500-15,499 296 19 4 1 3 4 £15,500-24,999 391 21 5 1 4 7 £25,000-49,999 730 26 8 2 5 9 £50,000 or over 278 35 15 3 12 9 Don’t know/refused 160 12 3 - 3 3 Housing situation: My home is being bought on a mortgage

722 26 9 2 6 7

My home is owned outright 580 19 6 1 5 6 My home is rented from a local authority

173 19 4 2 2 9

My home is rented from a private landlord

358 27 8 2 6 8


167 22 2 1 2 8

Presence of own children: Aged 0-4 210 43 18 5 13 11 Aged 5-9 254 44 18 4 14 12 Aged 10-15 364 34 11 2 9 10 Aged 16-18 295 26 9 2 7 8 Any children 786 34 12 3 9 10 No children in household 1,214 17 4 1 3 5



Household size: 1 320 14 4 1 3 5 2 642 18 5 2 3 5 3 444 27 9 2 6 8 4 390 28 8 2 6 7 5 or more 204 37 13 2 10 13 Current marital status: Single 608 20 5 1 4 7 Married/Civil partnership/Living as married

1,163 26 9 2 7 8


479 28 10 3 8 9


886 25 8 2 6 8


468 20 4 1 2 6


167 10 2 1 1 4




FIGURE 95: NEXT MOST POPULAR CONSUMPTION OF COFFEE-COFFEE PODS (EG NESPRESSO), BY DEMOGRAPHICS, JUNE 2013 Base: 2,000 internet users aged 16+ Sample


At least once in the last 6

months**






% % % %

All 2,000 5 4 10 67 Gender: Male 1,000 6 4 10 64 Female 1,000 5 4 9 70 Age: 16-24 344 8 4 7 67 25-34 381 7 4 11 54 35-44 379 7 5 11 60 45-54 370 4 2 13 70 55-64 266 4 5 8 76 65+ 260 2 2 6 85 16-34 725 7 4 9 60 35-54 749 5 4 12 65 55+ 526 3 4 7 80 Region: Inner and Greater London 271 8 7 10 50 South East/East Anglia 496 5 3 9 70 South West and Wales 267 3 4 12 68 East and West Midlands 326 5 4 8 66 North West 204 6 4 8 70 Yorkshire and Humberside 172 6 1 13 72 North and Scotland 264 4 4 8 73 Area: Urban location (ie living in a town/city)

825 6 5 10 61


791 6 4 9 69


298 4 5 10 69




Socio-economic group: AB 578 6 5 10 60 C1 577 5 3 10 67 C2 414 6 4 12 65 D 290 4 3 6 77 E 141 6 4 4 84 Highest level of education: No formal qualification* 81 2 4 2 86 GCSE/O-level or equivalent 475 4 3 9 73 AS/A-level or equivalent 301 5 4 8 70 Vocational qualification (eg NVQs, BTEC)

315 5 3 10 70


575 6 5 11 59

Gross annual household income: Under £9,500 145 3 2 8 76 £9,500-15,499 296 5 5 7 74 £15,500-24,999 391 5 4 10 69 £25,000-49,999 730 5 4 10 64 £50,000 or over 278 8 4 10 54 Don’t know/refused 160 4 2 9 79 Housing situation: My home is being bought on a mortgage

722 6 4 10 64

My home is owned outright 580 4 4 9 72 My home is rented from a local authority

173 2 4 10 71


358 7 4 11 62


167 6 5 7 72


1,163 6 4 10 64

Separated, divorced or widowed 229 3 3 10 74




479 6 3 8 64


886 6 4 11 64


468 6 4 9 71


167 1 4 7 83


FIGURE 96: MOST POPULAR CONSUMPTION OF COFFEE-OTHER COFFEE TYPES (EG ONE-CUP COFFEE FILTER BAGS), BY


size Any


day

2 or more

times a day

Once a day

At least once a week**

% % % % %

All 2,000 19 3 1 2 5 Gender: Male 1,000 22 4 2 3 6 Female 1,000 17 3 1 2 4 Age: 16-24 344 25 4 1 3 7 25-34 381 30 8 3 5 10 35-44 379 21 5 1 4 4 45-54 370 13 - - - 2 55-64 266 12 1 - - 1 65+ 260 10 1 1 - 2 16-34 725 27 6 2 4 9 35-54 749 17 3 1 2 3 55+ 526 11 1 1 - 1 Region: Inner and Greater London 271 35 10 3 7 9 South East/East Anglia 496 17 3 1 1 4 South West and Wales 267 15 1 - 1 3 East and West Midlands 326 21 4 1 3 6 North West 204 17 1 - 1 6 Yorkshire and Humberside 172 13 2 1 2 2 North and Scotland 264 16 2 1 2 3 Area: Urban location (ie living in a town/city) 825 25 5 1 4 6 Suburban location (ie close to town/city but living outside a town/city)

791 17 3 1 2 4




Working status: Employee full-time (30+ hours/week) 812 27 5 1 3 7 Employee part-time (less than 30 hours/week) 298 17 3 1 2 5 Any self-employed 168 17 4 2 2 3 In full-time education 187 19 3 1 3 7 Retired 328 11 1 1 - 1 Not working for any other reason 207 9 1 - 1 2 Socio-economic group: AB 578 23 6 2 4 4 C1 577 19 3 1 2 5 C2 414 21 2 - 2 7 D 290 16 2 1 1 5 E 141 11 3 1 2 3 Highest level of education: No formal qualification* 81 11 - - - 2 GCSE/O-level or equivalent 475 16 3 1 1 4 AS/A-level or equivalent 301 21 3 1 2 5 Vocational qualification (eg NVQs, BTEC) 315 16 2 - 2 3 Further qualification (HNCs, HNDs) 146 18 1 1 1 5 University degree (including undergraduate and masters degrees)

575 24 6 2 4 6

Gross annual household income: Under £9,500 145 17 4 2 2 6 £9,500-15,499 296 18 3 1 2 5 £15,500-24,999 391 20 3 - 3 6 £25,000-49,999 730 20 3 1 2 4 £50,000 or over 278 24 5 1 4 5 Don’t know/refused 160 10 1 1 - 2 Housing situation: My home is being bought on a mortgage 722 22 4 1 3 5 My home is owned outright 580 17 2 1 2 4 My home is rented from a local authority 173 14 3 1 3 3 My home is rented from a private landlord 358 21 4 1 3 5 My home is rented from a housing association/others

167 18 2 2 1 7

Presence of own children: Aged 0-4 210 38 11 3 8 15 Aged 5-9 254 39 11 4 7 10 Aged 10-15 364 27 5 2 4 7 Aged 16-18 295 20 4 1 3 5 Any children 786 28 6 2 5 8 No children in household 1,214 14 2 1 1 3 Household size: 1 320 13 2 1 1 3 2 642 13 1 1 1 2 3 444 23 4 - 4 6 4 390 24 5 2 3 6 5 or more 204 33 8 3 5 9 Current marital status: Single 608 20 2 1 1 5 Married/Civil partnership/Living as married 1,163 20 4 1 3 5 Separated, divorced or widowed 229 14 2 1 1 2




479 23 5 2 4 5


886 21 4 1 2 6


167 7 2 1 2 2


FIGURE 97: NEXT MOST POPULAR CONSUMPTION OF COFFEE-OTHER COFFEE TYPES (EG ONE-CUP COFFEE FILTER BAGS), BY



At least once in

the last 6 months

I have drunk this


the past six months




% % % %


791 6 4 7 76





298 5 4 10 73


575 7 6 8 68


167 6 2 4 78





479 7 6 6 71


886 6 5 8 71


167 1 1 5 88


Appendix – Consumer – Factors Influencing Choice Coffee UK, August 2013


Appendix – Consumer – Factors Influencing Choice FIGURE 98: FACTORS INFLUENCING CHOICE OF COFFEE, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home %

Rich taste 53 Is a fair trade product 29 Is a premium brand (eg Nespresso) 25 Convenient packaging (eg re-sealable) 23 Ethical packaging (eg eco refill packs) 15 Comes with a free gift (eg coffee mug) 14 Comes from a specific country/region (eg Costa Rican, Guatemalan) 14 Added flavours (eg chocolate, amaretto, vanilla flavoured coffee) 14 Is an organic product 13 Made by a coffee shop brand (eg Costa) 12 Limited/special editions 10 Made by a small producer 5 Other 10 I never buy coffee 2 SOURCE: GMI/MINTEL FIGURE 99: MOST POPULAR FACTORS INFLUENCING CHOICE OF COFFEE, BY DEMOGRAPHICS, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home Sample

size Rich taste

Is a fair trade

product

Is a premium brand (eg

Nespresso)

Convenient packaging

(eg re-sealable)

Ethical packaging

(eg eco refill

packs) % % % % %

All 1,633 53 29 25 23 15 Gender: Male 841 54 28 26 20 11 Female 792 53 30 23 26 19 Age: 16-24 236 45 36 26 24 14 25-34 303 46 26 25 19 13 35-44 314 53 24 27 23 13 45-54 314 59 28 25 27 17 55-64 230 64 30 26 23 21 65+ 236 53 32 17 24 13 16-34 539 46 31 26 21 13 35-54 628 56 26 26 25 15 55+ 466 59 31 22 23 17 Region: Inner and Greater London 230 50 30 30 23 13 South East/East Anglia 408 52 28 23 23 16 South West and Wales 219 54 28 24 22 16 East and West Midlands 262 55 29 25 27 13 North West 169 53 30 26 22 13 Yorkshire and Humberside 136 58 29 21 30 17 North and Scotland 209 54 31 23 18 18



Area: Urban location (ie living in a town/city) 683 52 30 26 22 14 Suburban location (ie close to town/city but living outside a town/city)

646 53 27 27 26 16

Village/Rural location/Other 304 56 31 18 19 15 Working status: Employee full-time (30+ hours/week) 677 50 26 29 22 14 Employee part-time (less than 30 hours/week)

232 57 28 24 23 16

Any self-employed 145 59 33 23 26 16 In full-time education 121 50 36 27 28 12 Retired 298 55 32 18 25 16 Not working for any other reason 160 57 29 21 19 19 Socio-economic group: AB 498 53 33 25 23 15 C1 449 53 31 26 24 15 C2 352 52 26 25 22 14 D 222 57 22 27 24 14 E 112 53 25 14 22 22 Highest level of education: GCSE/O-level or equivalent 395 53 22 25 25 14 AS/A-level or equivalent 231 51 26 27 23 13 Vocational qualification (eg NVQs, BTEC)

249 51 31 22 24 15

Further qualification (HNCs, HNDs) 122 61 31 25 17 11 University degree (including undergraduate and masters degrees)

488 55 34 26 24 19

Gross annual household income: Under £9,500 111 50 34 23 21 20 £9,500-15,499 238 51 27 19 23 13 £15,500-24,999 334 54 30 23 22 16 £25,000-49,999 586 55 29 26 24 16 £50,000 or over 244 57 34 32 23 14 Don’t know/refused 120 43 18 19 31 8 Housing situation: My home is being bought on a mortgage

569 50 27 23 23 15


142 54 25 22 27 14


295 55 34 30 24 17


132 54 23 22 21 14

Presence of own children: Aged 0-4 178 44 24 24 20 15 Aged 5-9 218 52 22 28 23 11 Aged 10-15 302 55 24 29 24 11 Aged 16-18 245 58 29 24 28 16 Any children 652 53 26 26 24 13 No children in household 981 53 31 24 23 16



Household size: 1 263 54 33 22 21 19 2 534 55 33 24 24 16 3 361 51 24 28 23 12 4 308 51 26 22 22 15 5 or more 167 54 26 28 28 12 Current marital status: Single 439 48 33 26 23 15 Married/Civil partnership/Living as married

989 55 28 24 23 15


405 50 32 28 23 13


727 54 28 25 24 15


379 52 30 23 24 18


122 61 25 16 20 13

SOURCE: GMI/MINTEL

FIGURE 100: NEXT MOST POPULAR FACTORS INFLUENCING CHOICE OF COFFEE, BY DEMOGRAPHICS, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home Sample

size Comes with a

free gift (eg

coffee mug)

Comes from a specific country/

region (eg Costa Rican, Guatemalan)

Added flavours (eg chocolate, amaretto,

vanilla flavoured

coffee)

Is an organic product

Made by a coffee

shop brand (eg Costa)

% % % % %

All 1,633 14 14 14 13 12 Gender: Male 841 12 15 10 12 12 Female 792 16 12 17 14 13 Age: 16-24 236 19 10 26 23 16 25-34 303 16 13 18 16 15 35-44 314 15 14 14 13 14 45-54 314 17 16 10 10 10 55-64 230 12 18 7 5 10 65+ 236 4 13 5 10 8 16-34 539 17 12 22 19 15 35-54 628 16 15 12 11 12 55+ 466 8 15 6 8 9



Region: Inner and Greater London 230 15 13 15 23 15 South East/East Anglia 408 14 16 14 9 12 South West and Wales 219 14 13 11 14 13 East and West Midlands 262 15 13 14 13 9 North West 169 17 12 14 10 17 Yorkshire and Humberside 136 15 17 15 11 12 North and Scotland 209 9 12 11 12 9 Area: Urban location (ie living in a town/city)

683 15 13 15 15 14


646 13 14 13 10 11

Village/Rural location/Other 304 13 16 12 13 10 Working status: Employee full-time (30+ hours/week)

677 14 16 15 13 15


232 16 9 11 14 9

Any self-employed 145 18 21 14 19 11 In full-time education 121 18 11 25 21 21 Retired 298 6 12 4 9 8 Not working for any other reason

160 17 11 19 9 8

Socio-economic group: AB 498 13 19 12 17 13 C1 449 13 12 13 11 12 C2 352 16 13 17 13 13 D 222 17 12 15 11 13 E 112 7 7 6 7 11 Highest level of education: GCSE/O-level or equivalent 395 13 9 13 8 14 AS/A-level or equivalent 231 14 10 19 16 11 Vocational qualification (eg NVQs, BTEC)

249 16 13 12 11 11

Further qualification (HNCs, HNDs)

122 12 21 9 11 12

University degree (including undergraduate and masters degrees)

488 14 18 14 17 14

Gross annual household income:

Under £9,500 111 16 10 14 17 11 £9,500-15,499 238 14 10 15 11 11 £15,500-24,999 334 13 13 11 11 12 £25,000-49,999 586 14 14 14 14 13 £50,000 or over 244 15 22 14 14 13 Don’t know/refused 120 13 12 18 8 10



Housing situation: My home is being bought on a mortgage

569 16 14 15 12 14


142 14 11 11 13 11


295 13 16 17 15 14


132 18 9 13 9 17

Presence of own children: Aged 0-4 178 19 14 19 16 11 Aged 5-9 218 13 11 17 17 18 Aged 10-15 302 15 16 15 14 17 Aged 16-18 245 17 14 13 12 16 Any children 652 15 14 17 14 15 No children in household 981 13 14 11 12 10 Household size: 1 263 14 15 6 10 13 2 534 10 15 12 12 9 3 361 16 12 17 10 12 4 308 17 15 17 19 15 5 or more 167 17 12 16 15 18 Current marital status: Single 439 18 13 18 19 13 Married/Civil partnership/Living as married

989 13 15 12 11 12

Separated, divorced or widowed

205 10 13 9 9 11


405 12 18 16 15 11


727 13 13 13 12 14


379 16 13 12 12 11


122 24 9 11 15 11

SOURCE: GMI/MINTEL



FIGURE 101: OTHER FACTORS INFLUENCING CHOICE OF COFFEE, BY DEMOGRAPHICS, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home Sample

size Limited/ special editions

Made by a small

producer**

Other I never buy coffee

% % % %

All 1,633 10 5 10 2 Gender: Male 841 9 7 11 3 Female 792 11 4 9 2 Age: 16-24 236 14 8 3 5 25-34 303 13 6 7 3 35-44 314 13 6 9 2 45-54 314 9 4 12 2 55-64 230 5 3 14 2 65+ 236 5 5 16 2 16-34 539 14 7 5 4 35-54 628 11 5 11 2 55+ 466 5 4 15 2 Region: Inner and Greater London 230 10 7 4 3 South East/East Anglia 408 11 6 12 1 South West and Wales 219 9 4 11 2 East and West Midlands 262 9 5 11 3 North West 169 12 5 10 2 Yorkshire and Humberside 136 8 7 12 1 North and Scotland 209 10 4 10 2 Area: Urban location (ie living in a town/city) 683 11 7 9 2 Suburban location (ie close to town/city but living outside a town/city)

646 10 4 11 3

Village/Rural location/Other 304 7 5 11 1 Working status: Employee full-time (30+ hours/week) 677 12 6 10 2 Employee part-time (less than 30 hours/week) 232 10 4 8 3 Any self-employed 145 9 3 7 1 In full-time education 121 11 6 2 4 Retired 298 4 4 18 2 Not working for any other reason 160 15 6 9 3 Socio-economic group: AB 498 8 7 10 1 C1 449 9 5 8 4 C2 352 12 5 10 2 D 222 16 4 10 3 E 112 7 3 17 5



Highest level of education: GCSE/O-level or equivalent 395 11 4 10 3 AS/A-level or equivalent 231 10 5 10 3 Vocational qualification (eg NVQs, BTEC) 249 10 3 10 3 Further qualification (HNCs, HNDs) 122 11 8 13 2 University degree (including undergraduate and masters degrees)

488 10 7 8 1


132 11 5 11 3

Presence of own children: Aged 0-4 178 17 7 4 3 Aged 5-9 218 11 7 6 2 Aged 10-15 302 11 9 6 2 Aged 16-18 245 8 6 5 3 Any children 652 12 7 6 2 No children in household 981 9 4 13 2 Household size: 1 263 8 5 13 1 2 534 10 4 13 2 3 361 12 6 9 3 4 308 10 7 6 4 5 or more 167 12 7 4 1 Current marital status: Single 439 13 5 7 4 Married/Civil partnership/Living as married 989 10 6 11 1 Separated, divorced or widowed 205 7 3 15 2 Financial situation: Healthy – I have money left at the end of the month for a few luxuries or to add to my savings

405 9 6 12 2


727 10 6 7 2


122 9 1 12 5

** low response rate (75-100) SOURCE: GMI/MINTEL



FIGURE 102: WORDS ASSOCIATED WITH COFFEE, TEA AND HOT CHOCOLATE, FEBRUARY 2013 Base: 1,500 internet users aged 16+ Coffee Standard tea Speciality tea

(eg Earl Grey, Darjeeling)

Herbal tea (eg green tea, fruit

tea)

Hot chocolate

% % % % %

Energy boosting 36 14 6 10 11 Convenient 36 36 12 14 17 Refreshing 34 50 22 27 13 Flavoursome 31 25 20 20 33 Traditional 30 57 15 6 18 Comforting 29 40 15 12 51 Premium 21 13 27 12 15 Bitter 17 5 8 7 2 Indulgent 12 7 17 10 41 Exciting 11 8 8 9 16 Healthy 7 21 17 40 5 Bland 4 9 8 11 3 None of these 16 15 35 34 19 SOURCE: GMI/MINTEL FIGURE 103: MOST POPULAR WORDS ASSOCIATED WITH COFFEE, BY DEMOGRAPHICS, FEBRUARY 2013 Base: 1,500 internet users aged 16+ Energy

boosting Convenient Refreshing Flavoursome Traditional Comforting

% % % % % %

All 36 36 34 31 30 29 Gender: Male 32 35 38 30 30 30 Female 40 36 31 32 29 27 Age: 16-24 40 21 22 22 19 24 25-34 38 29 36 27 28 28 35-44 40 35 36 30 28 29 45-54 35 45 38 37 37 32 55-64 31 47 36 37 33 27 65+ 26 42 41 35 34 33 16-34 39 25 29 25 24 26 35-54 38 40 37 33 33 31 55+ 29 45 38 36 34 30



Region: Inner and Greater London

38 30 37 29 29 28

South East/East Anglia

34 35 33 30 31 27

South West and Wales

39 34 34 28 25 28

East and West Midlands

35 37 30 31 33 28

North West 36 39 43 36 29 31 Yorks, Humberside

39 35 27 27 29 27

North and Scotland

33 40 36 37 28 32

Area: Urban location 40 34 37 30 27 28 Suburban location 35 37 32 29 30 29 Village/rural location/Other

30 37 32 36 34 27

Working status: Employee full-time (30+ hours/week)

37 34 37 28 29 28


38 37 31 28 29 27

Any self-employed

44 38 27 40 32 26

In full-time education

38 22 23 22 23 25

Retired 28 45 42 39 37 34 Not working for any other reason

31 39 35 36 26 31

Socio-economic group:

AB 38 33 30 32 27 24 C1 39 34 32 31 29 30 C2 33 38 37 32 31 31 D 34 40 38 25 30 29 E* 27 41 45 34 36 33 Highest level of education:

GCSE/O-level or equivalent

32 42 38 29 26 31

AS/ A-level or equivalent

36 33 29 27 25 29

Vocational qualification (eg NVQs, BTEC)

37 41 35 32 37 29


36 40 34 37 35 25

University degree (including undergraduate and master’s degrees)

40 31 33 31 27 25




Under £9,500 32 28 34 27 33 34 £9,500-15,499 34 39 40 37 31 31 £15,500-24,999 37 36 34 31 29 29 £25,000-49,999 35 39 34 32 28 25 £50,000 or over 43 35 34 33 34 35 Don’t know/refused

29 23 26 17 24 23

Housing situation:

Bought on a Mortgage

39 32 30 26 26 26

Own outright 29 42 37 37 33 29 Rented from Local Authority

32 36 47 31 29 33

Rented from private landlord

43 34 32 34 31 31

Rented from housing association/ Others

33 35 39 25 30 31

Presence of own children:

Aged 0-4 35 34 31 22 21 26 Aged 5-9 39 34 41 23 24 32 Aged 10-15 34 35 35 29 27 30 Aged 16-18 36 39 30 32 26 28 Any children 36 36 34 28 26 29 No children in household

36 36 34 33 32 28

Household size: 1 36 41 36 31 33 28 2 33 36 35 34 33 28 3 39 41 36 31 29 31 4 38 31 29 30 23 26 5 or more 36 30 36 23 27 31 Current marital status:

Single 40 28 29 28 27 26 Married/civil partnership/living as married

33 38 37 31 29 30


38 49 36 39 40 28

Financial situation:

Healthy 36 38 33 33 32 25 OK 34 34 34 28 27 27 Tight 40 37 36 36 32 33 Struggling/In Trouble

33 34 33 28 30 31


Appendix – Consumer – Drivers to Drinking Coffee Coffee UK, August 2013


Appendix – Consumer – Drivers to Drinking Coffee FIGURE 104: REASONS TO DRINK COFFEE, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home %

Coffee is a good way to start the day 50 Coffee helps me to stay alert 37 Coffee makes a nice treat 35 Coffee gives me an energy boost 34 I always drink coffee when having a break 25 Coffee is a healthier option compared to fizzy caffeine drinks 22 I am sometimes put off by the bitter taste of coffee 17 Coffee is a good way to stay hydrated 11 I have switched to drinking coffee more at home to save money 10 I tend to add flavourings (eg syrup) to my coffee to disguise the bitter taste 8 I rarely have time to drink coffee at home in the morning 5 None of these 7 SOURCE: GMI/MINTEL FIGURE 105: MOST POPULAR REASONS TO DRINK COFFEE, BY DEMOGRAPHICS, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home Sample

size Coffee is a good way to

start the day

Coffee helps me

to stay alert

Coffee makes a

nice treat

Coffee gives me

an energy boost

I always drink coffee when

having a break

Coffee is a healthier

option compared

to fizzy caffeine drinks

% % % % % %

All 1,633 50 37 35 34 25 22 Gender: Male 841 51 38 30 33 25 24 Female 792 50 36 39 36 26 21 Age: 16-24 236 44 32 29 41 12 18 25-34 303 49 33 34 37 19 15 35-44 314 58 44 33 41 25 20 45-54 314 54 45 39 35 31 26 55-64 230 51 36 37 28 32 27 65+ 236 43 27 36 21 31 30 16-34 539 47 33 32 39 16 16 35-54 628 56 45 36 38 28 23 55+ 466 47 31 36 24 32 28 Region: Inner and Greater London 230 48 38 36 35 22 20 South East/East Anglia 408 49 39 38 38 25 27 South West and Wales 219 52 37 34 31 31 16 East and West Midlands 262 52 34 33 35 23 21 North West 169 51 37 33 36 22 22 Yorkshire and Humberside 136 54 40 35 32 29 28 North and Scotland 209 49 33 32 28 26 21



Area: Urban location (ie living in a town/city)

683 50 37 32 36 22 21


646 50 38 37 34 27 24

Village/rural location/Other 304 51 35 36 31 29 21 Working status: Employee full-time (30+ hours/week)

677 55 40 30 39 23 20


232 50 39 38 32 25 23

Any self-employed 145 49 34 37 37 29 25 In full-time education 121 46 36 34 45 15 17 Retired 298 45 29 37 21 32 28 Not working for any other reason

160 46 37 41 31 28 23

Socio-economic group: AB 498 53 37 35 34 25 25 C1 449 47 37 35 33 22 17 C2 352 52 39 34 38 30 24 D 222 53 36 32 37 24 23 E 112 40 29 37 25 26 27 Highest level of education: GCSE/O-level or equivalent 395 49 38 39 34 29 23 AS/A-level or equivalent 231 47 32 31 31 19 18 Vocational qualification (eg NVQs, BTEC)

249 55 36 32 34 30 24


122 54 33 32 35 23 25


488 51 41 36 37 22 24


Under £9,500 111 54 38 32 35 18 26 £9,500-15,499 238 48 34 34 33 26 24 £15,500-24,999 334 48 37 34 30 26 21 £25,000-49,999 586 53 38 36 39 26 23 £50,000 or over 244 54 42 34 33 23 20 Don’t know/refused 120 39 25 35 26 24 19 Housing situation: My home is being bought on a mortgage

569 51 37 30 35 28 21

My home is owned outright 495 47 34 39 31 25 25 My home is rented from a local authority

142 46 37 32 40 23 24


295 54 43 37 37 22 21


132 57 36 33 30 25 20



Presence of own children: Aged 0-4 178 47 33 30 39 21 14 Aged 5-9 218 53 35 25 43 21 16 Aged 10-15 302 55 44 31 39 28 21 Aged 16-18 245 50 42 36 38 26 23 Any children 652 52 39 32 38 25 19 No children in household 981 50 35 36 31 25 25 Household size: 1 263 54 37 37 31 29 27 2 534 49 35 37 29 25 25 3 361 51 39 33 38 24 21 4 308 50 38 31 39 24 18 5 or more 167 49 37 32 39 23 17 Current marital status: Single 439 49 38 34 40 18 20 Married/Civil partnership/Living as married

989 50 36 35 33 26 22


205 55 37 34 28 35 30


405 49 34 34 30 24 24


727 51 37 36 38 24 21


379 49 38 33 33 28 25

Struggling– I’m in danger of falling behind with bills or loan repayments/in trouble – I’ve missed loan repayments or household bills

122 54 42 34 31 30 19

SOURCE: GMI/MINTEL



FIGURE 106: NEXT MOST POPULAR REASONS TO DRINK COFFEE, BY DEMOGRAPHICS, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home Sample

size I am

sometimes put off by the bitter taste of coffee

Coffee is a good way to

stay hydrated

I have switched

to drinking coffee

more at home to

save money

I tend to add

flavourings (eg syrup)

to my coffee to disguise the bitter

taste

I rarely have time to drink coffee at home in

the morning**

None of these

% % % % % %

All 1,633 17 11 10 8 5 7 Gender: Male 841 14 11 11 7 3 7 Female 792 21 10 9 9 6 7 Age: 16-24 236 27 7 18 19 8 4 25-34 303 19 12 16 12 6 5 35-44 314 11 12 12 10 4 7 45-54 314 17 10 5 3 5 7 55-64 230 14 10 6 - 2 9 65+ 236 16 13 3 1 1 11 16-34 539 22 9 17 15 7 5 35-54 628 14 11 8 6 5 7 55+ 466 15 11 4 - 2 10 Region: Inner and Greater London

230 23 16 16 15 4 6

South East/East Anglia

408 16 9 9 6 4 8

South West and Wales

219 20 9 8 5 4 8

East and West Midlands

262 13 14 7 7 3 9

North West 169 16 9 11 10 8 6 Yorkshire and Humberside

136 22 7 10 5 5 6

North and Scotland 209 12 9 11 5 5 5 Area: Urban location (ie living in a town/city)

683 17 12 13 11 5 7


646 16 11 8 6 4 7

Village/rural location/Other

304 19 7 6 5 4 7




677 15 12 12 9 6 5


232 19 9 10 9 4 9


160 19 6 11 5 3 10


AB 498 17 12 11 10 4 5 C1 449 17 10 10 7 6 8 C2 352 16 12 8 7 4 7 D 222 17 9 13 9 6 7 E 112 17 6 5 - 1 12 Highest level of education:


395 15 8 9 6 4 7

AS/A-level or equivalent

231 19 10 10 12 5 7


249 15 10 9 5 6 7


122 18 13 6 6 2 12


488 19 13 13 10 6 5



569 16 9 10 8 6 8

My home is owned outright

495 18 12 8 6 3 6

My home is rented from a local authority

142 15 11 15 6 4 8


295 17 11 11 10 4 5


132 17 9 10 9 6 11




Aged 0-4 178 20 13 17 16 4 3 Aged 5-9 218 20 17 17 13 4 4 Aged 10-15 302 20 15 15 13 5 7 Aged 16-18 245 24 11 12 13 8 7 Any children 652 20 13 13 12 5 6 No children in household

981 15 9 8 5 4 8

Household size: 1 263 16 10 7 3 4 7 2 534 14 9 7 3 3 9 3 361 19 11 9 11 6 4 4 308 18 10 13 8 6 8 5 or more 167 22 15 18 21 5 6 Current marital status:

Single 439 20 9 14 13 6 6 Married/Civil partnership/Living as married

989 15 11 9 6 4 7


205 18 12 4 4 5 8


405 20 12 10 11 5 6


727 15 10 9 6 3 6


379 19 11 11 6 7 9

Struggling– I’m in danger of falling behind with bills or loan repayments/in trouble – I’ve missed loan repayments or household bills

122 14 9 11 9 5 12

** low response rate (75-100) SOURCE: GMI/MINTEL

Appendix – Consumer – Attitudes Towards Drinking Coffee Coffee UK, August 2013


Appendix – Consumer – Attitudes Towards Drinking

Coffee FIGURE 107: AGREEMENT WITH STATEMENTS ON COFFEE, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home %

Coffee makers (eg cafetière, stove top) deliver a stronger taste than instant coffee 31 Instant coffee (eg Nescafé original, Kenco) provides the same caffeine hit as non-instant 31 The quality of coffee is more important to me than how easy it is to make 31 It’s hard to recreate coffee shop style drinks at home 24 I notice a difference in quality between standard and micro ground instant coffee (eg Nescafé Azera, Kenco Millicano)

21

Standard instant coffee tastes bland 19 The coffee bean has a strong flavour which is lost in the process of creating instant coffee 16 Coffee made using pod machines matches the quality of coffee from shops/cafes 14 I would like to recreate coffee shop flavours (eg eggnog at Christmas) at home 13 Some coffee makers (eg cafetière, stove top) create too much mess 13 I wouldn’t know how to use a coffee maker (eg filter, cafetière, stove top) 11 None of these 11 SOURCE: GMI/MINTEL FIGURE 108: MOST POPULAR AGREEMENT WITH STATEMENTS ON COFFEE, BY DEMOGRAPHICS, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home Sample

size Coffee

makers (eg cafetière, stove top) deliver a stronger

taste than instant coffee

Instant coffee (eg Nescafé original, Kenco)

provides the same caffeine

hit as non-instant

The quality

of coffee is more impor-tant to

me than how

easy it is to make

It’s hard to

recreate coffee shop style

drinks at home

I notice a difference in quality between standard

and micro ground instant

coffee (eg Nescafé Azera, Kenco

Millicano)

Standard instant coffee tastes bland

% % % % % %

All 1,633 31 31 31 24 21 19 Gender: Male 841 28 29 32 23 21 20 Female 792 34 33 30 25 22 18 Age: 16-24 236 23 19 30 34 23 22 25-34 303 29 25 25 24 25 17 35-44 314 28 28 29 28 22 22 45-54 314 35 37 31 24 22 16 55-64 230 35 36 39 19 20 20 65+ 236 36 42 33 15 15 18 16-34 539 27 23 27 28 24 19 35-54 628 32 32 30 26 22 19 55+ 466 35 39 36 17 17 19



Region: Inner and Greater London

230 23 27 35 20 27 23

South East/East Anglia 408 35 30 30 25 20 18 South West and Wales 219 40 32 32 25 24 21 East and West Midlands

262 27 32 28 23 22 16

North West 169 30 35 28 25 20 24 Yorkshire and Humberside

136 31 34 35 24 21 16

North and Scotland 209 29 29 29 27 15 16 Area: Urban location (ie living in a town/city)

683 28 28 32 24 23 20


646 32 33 31 26 22 18

Village/Rural location/Other

304 35 32 29 22 15 17


677 30 28 30 25 25 19


232 30 31 31 25 21 16


160 29 31 30 25 19 18


AB 498 35 28 36 24 22 26 C1 449 31 30 25 26 22 18 C2 352 30 31 33 23 22 16 D 222 27 33 30 27 22 14 E 112 27 42 26 13 12 13 Highest level of education:


395 25 37 28 26 20 14

AS/A-level or equivalent

231 28 24 32 26 23 20


249 33 34 32 23 22 16


122 42 30 31 17 19 18


488 34 27 34 25 22 25





569 33 29 27 26 23 18

My home is owned outright

495 32 33 35 22 20 20

My home is rented from a local authority

142 18 30 31 18 17 19


295 34 30 33 27 25 23


132 28 36 24 21 16 12


Aged 0-4 178 30 24 31 23 23 17 Aged 5-9 218 24 22 28 28 28 19 Aged 10-15 302 30 30 30 29 23 20 Aged 16-18 245 32 32 35 28 21 20 Any children 652 30 27 31 27 25 19 No children in household

981 32 33 30 23 19 19

Household size: 1 263 30 39 29 24 21 19 2 534 37 32 34 22 19 20 3 361 29 26 29 25 24 20 4 308 27 30 31 25 22 16 5 or more 167 27 26 28 28 26 20 Current marital status:

Single 439 26 24 26 32 20 20 Married/civil partnership/living as married

989 34 31 33 21 22 19


205 29 44 31 20 20 17




405 34 29 33 25 22 23


727 31 30 30 22 24 17


379 29 33 31 25 17 17

Struggling– I’m in danger of falling behind with bills or loan repayments/In trouble – I’ve missed loan repayments or household bills

122 30 33 25 32 20 19

SOURCE: GMI/MINTEL

FIGURE 109: NEXT MOST POPULAR AGREEMENT WITH STATEMENTS ON COFFEE, BY DEMOGRAPHICS, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home Sample

size The

coffee bean has a strong flavour

which is lost in the process

of creating instant coffee

Coffee made

using pod machines matches

the quality of coffee

from shops/ cafes

I would like to

recreate coffee shop

flavours (eg

eggnog at Christmas)

at home

Some coffee

makers (eg

cafetière, stove top)

create too much

mess

I wouldn’t know how to use a coffee

maker (eg filter,

cafetière, stove top)

None of

these

% % % % % %

All 1,633 16 14 13 13 11 11 Gender: Male 841 17 14 11 14 10 11 Female 792 15 13 16 12 12 11 Age: 16-24 236 19 11 22 11 17 9 25-34 303 15 16 19 16 12 8 35-44 314 16 16 16 13 11 11 45-54 314 17 12 10 18 10 15 55-64 230 14 15 8 10 8 11 65+ 236 17 11 4 9 10 15 16-34 539 17 14 20 14 14 8 35-54 628 16 14 13 15 10 13 55+ 466 16 13 6 10 9 13



Region: Inner and Greater London 230 20 18 14 14 10 9 South East/East Anglia 408 18 15 13 16 11 12 South West and Wales 219 14 13 14 14 11 11 East and West Midlands 262 15 10 12 13 11 14 North West 169 18 17 14 11 11 12 Yorkshire and Humberside 136 14 13 15 10 14 12 North and Scotland 209 13 9 13 11 12 9 Area: Urban location (ie living in a town/city)

683 17 13 15 13 11 11


646 16 14 12 14 11 10

Village/Rural location/Other

304 14 14 13 12 11 14


677 17 16 15 16 10 10


232 17 10 13 10 10 13


160 13 12 18 13 16 14

Socio-economic group: AB 498 21 15 13 18 9 7 C1 449 12 14 14 12 10 12 C2 352 16 13 14 13 13 13 D 222 16 12 15 9 15 12 E 112 12 9 8 9 13 20 Highest level of education:


395 10 13 13 11 12 14

AS/A-level or equivalent 231 18 13 16 11 14 10 Vocational qualification (eg NVQs, BTEC)

249 14 10 14 15 13 12


122 19 13 9 8 8 14


488 20 17 14 16 9 8


Under £9,500 111 17 9 16 12 18 14 £9,500-15,499 238 16 12 10 9 13 13 £15,500-24,999 334 16 11 10 12 11 13 £25,000-49,999 586 16 16 15 15 11 10 £50,000 or over 244 19 18 16 17 7 6 Don’t know/refused 120 11 7 13 13 8 18



Housing situation: My home is being bought on a mortgage

569 17 16 15 17 11 11

My home is owned outright 495 15 12 10 12 9 12 My home is rented from a local authority

142 13 13 8 9 13 15


295 22 13 17 14 12 8


132 11 11 17 7 17 15


Aged 0-4 178 18 18 15 15 12 7 Aged 5-9 218 16 18 20 16 13 7 Aged 10-15 302 19 17 16 19 11 10 Aged 16-18 245 17 16 18 18 14 10 Any children 652 17 16 17 17 12 9 No children in household 981 16 12 11 11 11 13 Household size: 1 263 15 9 9 10 12 13 2 534 16 15 10 12 10 12 3 361 16 11 15 16 11 11 4 308 16 16 19 12 11 11 5 or more 167 19 17 18 17 14 9 Current marital status: Single 439 16 9 17 12 16 11 Married/civil partnership/living as married

989 17 16 13 14 8 11


205 14 11 7 13 14 13


405 16 13 14 10 11 10


727 17 14 12 15 10 9


379 16 14 15 14 13 13

Struggling– I’m in danger of falling behind with bills or loan repayments/In trouble – I’ve missed loan repayments or household bills

122 13 10 12 15 16 22

SOURCE: GMI/MINTEL

Appendix – Consumer – Attitudes Towards Coffee Coffee UK, August 2013


Appendix – Consumer – Attitudes Towards Coffee FIGURE 110: ATTITUDES TOWARDS COFFEE, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home Any

agree Strongly

agree Agree Neither agree

nor disagree Any

disagree Disagree Strongly

disagree % % % % % % %

I would notice if the price of my favourite coffee rose

77 28 49 16 7 6 1

I am more likely to stock up on my favourite brand when it is on promotion

76 31 45 15 9 7 2

It’s only worth paying more for coffee if there is an obvious difference in taste from cheaper ones

71 17 53 22 8 5 3

It’s worth paying more for packaging that keeps coffee fresher for longer

40 7 33 42 18 13 5

I would be more willing to try a higher priced coffee if recommended to me (eg by friends/family/ online)

39 6 33 36 25 18 7

I would be more likely to buy a premium version of one of my favourite brands than switch to a new premium brand

36 6 30 44 20 14 5

I am more likely to use premium coffee when drinking with others than when drinking alone

33 7 26 34 33 25 8

Information on product origin (eg Java Volcanic Island coffee) reassures me of high quality

32 5 27 47 21 15 6

Micro-ground coffee (eg Kenco Millicano) is worth paying more for than regular instant

27 5 22 42 31 23 8



I would be more likely to buy premium coffee if they were sold in smaller formats (eg single serve sachets, 40g jars)

27 5 22 32 41 29 12

Coffee pod machines/pods are worth the cost for the quality you get

23 6 17 42 35 23 12

Coffee-shop brands (eg Starbucks Via) make better in-home coffee than brands like Nescafé and Kenco

23 6 17 43 35 25 10

SOURCE: GMI/MINTEL FIGURE 111: AGREEMENT WITH THE STATEMENT ‘I WOULD NOTICE IF THE PRICE OF MY FAVOURITE COFFEE ROSE’, BY

DEMOGRAPHICS, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home Sample

size Any agree Neither agree

nor disagree Any

disagree % % %

All 1,633 77 16 7 Gender: Male 841 75 17 8 Female 792 80 15 6 Age: 16-24 236 72 19 9 25-34 303 73 21 7 35-44 314 80 16 5 45-54 314 84 11 5 55-64 230 76 15 10 65+ 236 79 15 6 16-34 539 72 20 8 35-54 628 82 13 5 55+ 466 77 15 8 Region: Inner and Greater London 230 70 21 9 South East/East Anglia 408 77 17 6 South West and Wales 219 79 12 8 East and West Midlands 262 81 12 7 North West 169 85 12 3 Yorkshire and Humberside 136 79 15 6 North and Scotland 209 72 20 8 Area: Urban location (ie living in a town/city) 683 76 16 8 Suburban location (ie close to town/city but living outside a town/city)

646 78 15 7

Village/rural location/other 304 79 16 5



Working status: Employee full-time (30+ hours/week) 677 77 17 6 Employee part-time (less than 30 hours/week) 232 78 16 7 Any self-employed 145 79 14 6 In full-time education 121 69 22 8 Retired 298 76 16 8 Not working for any other reason 160 86 9 4 Socio-economic group: AB 498 77 15 8 C1 449 74 19 7 C2 352 80 14 6 D 222 79 16 5 E 112 79 16 4 Highest level of education: GCSE/O-level or equivalent 395 80 15 6 AS/A-level or equivalent 231 74 17 9 Vocational qualification (eg NVQs, BTEC) 249 78 16 6 Further qualification (HNCs, HNDs) 122 79 18 3 University degree (including undergraduate and masters degrees)

488 77 15 8

Gross annual household income: Under £9,500 111 74 21 5 £9,500-15,499 238 84 11 5 £15,500-24,999 334 75 19 6 £25,000-49,999 586 79 14 7 £50,000 or over 244 75 15 10 Don’t know/refused 120 73 23 4 Housing situation: My home is being bought on a mortgage 569 77 17 7 My home is owned outright 495 77 16 7 My home is rented from a local authority 142 80 12 8 My home is rented from a private landlord 295 77 16 7 My home is rented from a housing association/others

132 80 16 5

Presence of own children: Aged 0-4 178 79 18 3 Aged 5-9 218 78 17 5 Aged 10-15 302 80 13 6 Aged 16-18 245 80 14 6 Any children 652 78 16 6 No children in household 981 77 16 7 Household size: 1 263 78 18 4 2 534 77 14 9 3 361 76 18 6 4 308 76 16 8 5 or more 167 83 14 3 Current marital status: Single 439 74 19 7 Married/Civil partnership/Living as married 989 79 15 7 Separated, divorced or widowed 205 79 16 5




405 74 18 9


727 78 15 7

Tight – I’m making ends meet, but only just 379 79 17 5 Struggling – I’m in danger of falling behind with bills or loan repayments/In trouble – I’ve missed loan repayments or household bills

122 83 11 6

SOURCE: GMI/MINTEL

FIGURE 112: AGREEMENT WITH THE STATEMENT ‘I AM MORE LIKELY TO STOCK UP ON MY FAVOURITE BRAND WHEN IT IS ON

PROMOTION’, BY DEMOGRAPHICS, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home Sample

size Any

agree Neither

agree nor disagree

Any disagree

% % %


646 76 16 8

Village/rural location/other 304 80 11 9 Working status: Employee full-time (30+ hours/week) 677 77 16 7 Employee part-time (less than 30 hours/week) 232 79 14 7 Any self-employed 145 71 17 12 In full-time education 121 72 14 14 Retired 298 75 14 11 Not working for any other reason 160 76 15 9



Socio-economic group: AB 498 76 14 10 C1 449 77 14 9 C2 352 76 16 8 D 222 73 20 6 E 112 75 13 12 Highest level of education: GCSE/O-level or equivalent 395 81 11 8 AS/A-level or equivalent 231 75 14 11 Vocational qualification (eg NVQs, BTEC) 249 78 17 6 Further qualification (HNCs, HNDs) 122 74 16 10 University degree (including undergraduate and masters degrees)

488 74 17 9

Gross annual household income: Under £9,500 111 68 22 11 £9,500-15,499 238 79 15 6 £15,500-24,999 334 75 15 10 £25,000-49,999 586 77 15 8 £50,000 or over 244 77 14 9 Don’t know/refused 120 71 17 13 Housing situation: My home is being bought on a mortgage 569 78 14 8 My home is owned outright 495 78 13 9 My home is rented from a local authority 142 79 11 11 My home is rented from a private landlord 295 72 21 7 My home is rented from a housing association/others 132 65 22 13 Presence of own children: Aged 0-4 178 72 20 8 Aged 5-9 218 78 16 6 Aged 10-15 302 80 13 7 Aged 16-18 245 81 12 7 Any children 652 78 15 7 No children in household 981 75 15 10 Household size: 1 263 76 16 7 2 534 75 15 10 3 361 77 14 9 4 308 77 16 8 5 or more 167 72 18 10 Current marital status: Single 439 69 20 12 Married/Civil partnership/Living as married 989 78 14 8 Separated, divorced or widowed 205 80 13 7 Financial situation: Healthy – I have money left at the end of the month for a few luxuries or to add to my savings

405 74 14 12


727 77 16 7


122 73 15 12

SOURCE: GMI/MINTEL



FIGURE 113: AGREEMENT WITH THE STATEMENT ‘IT’S ONLY WORTH PAYING MORE FOR COFFEE IF THERE IS AN OBVIOUS

DIFFERENCE IN TASTE FROM CHEAPER ONES’, BY DEMOGRAPHICS, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home Sample

size Any agree Neither agree

nor disagree Any disagree

% % %


646 72 21 7

Village/rural location/other 304 71 21 8 Working status: Employee full-time (30+ hours/week) 677 71 22 7 Employee part-time (less than 30 hours/week) 232 69 23 7 Any self-employed 145 74 15 10 In full-time education 121 65 26 9 Retired 298 70 20 10 Not working for any other reason 160 71 21 8 Socio-economic group: AB 498 75 18 7 C1 449 72 21 7 C2 352 68 24 8 D 222 68 26 7 E 112 59 23 18



Highest level of education: GCSE/O-level or equivalent 395 67 24 9 AS/A-level or equivalent 231 68 25 7 Vocational qualification (eg NVQs, BTEC) 249 69 23 8 Further qualification (HNCs, HNDs) 122 71 20 9 University degree (including undergraduate and masters degrees)

488 78 17 5

Gross annual household income: Under £9,500 111 68 25 7 £9,500-15,499 238 68 21 11 £15,500-24,999 334 69 21 10 £25,000-49,999 586 72 22 6 £50,000 or over 244 77 18 5 Don’t know/refused 120 63 27 11 Housing situation: My home is being bought on a mortgage 569 70 22 8 My home is owned outright 495 73 19 8 My home is rented from a local authority 142 65 24 11 My home is rented from a private landlord 295 72 21 7 My home is rented from a housing association/others

132 62 30 8

Presence of own children: Aged 0-4 178 71 23 6 Aged 5-9 218 70 23 7 Aged 10-15 302 73 20 7 Aged 16-18 245 71 19 9 Any children 652 70 23 7 No children in household 981 71 21 8 Household size: 1 263 70 21 9 2 534 71 21 8 3 361 71 21 8 4 308 70 24 6 5 or more 167 69 21 10 Current marital status: Single 439 67 24 9 Married/Civil partnership/Living as married 989 72 20 7 Separated, divorced or widowed 205 70 21 9 Financial situation: Healthy – I have money left at the end of the month for a few luxuries or to add to my savings

405 71 22 7


727 72 22 6


122 66 18 16

SOURCE: GMI/MINTEL



FIGURE 114: AGREEMENT WITH THE STATEMENT ‘IT’S WORTH PAYING MORE FOR PACKAGING THAT KEEPS COFFEE FRESHER

FOR LONGER’, BY DEMOGRAPHICS, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home Sample

size Any

agree Neither agree nor disagree

Any disagree

% % %


646 38 44 18





488 50 37 13


405 45 38 17


727 43 43 14


122 31 36 33

SOURCE: GMI/MINTEL



FIGURE 115: AGREEMENT WITH THE STATEMENT ‘I WOULD BE MORE WILLING TO TRY A HIGHER PRICED COFFEE IF

RECOMMENDED TO ME (EG BY FRIENDS/FAMILY/ONLINE)’, BY DEMOGRAPHICS, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home Sample

size Any

agree Neither agree nor disagree

Any disagree

% % %


646 38 36 26





488 48 34 18


405 40 35 26


727 45 35 20


122 30 33 37

SOURCE: GMI/MINTEL



FIGURE 116: AGREEMENT WITH THE STATEMENT ‘I WOULD BE MORE LIKELY TO BUY A PREMIUM VERSION OF ONE OF MY

FAVOURITE BRANDS THAN SWITCH TO A NEW PREMIUM BRAND’, BY DEMOGRAPHICS, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home Sample

size Any

agree Neither

agree nor disagree

Any disagree

% % %


646 37 46 17





488 39 48 13


405 39 45 16


727 39 44 17


122 31 38 31

SOURCE: GMI/MINTEL



FIGURE 117: AGREEMENT WITH THE STATEMENT ‘I AM MORE LIKELY TO USE PREMIUM COFFEE WHEN DRINKING WITH OTHERS

THAN WHEN DRINKING ALONE’, BY DEMOGRAPHICS, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home Sample

size Any

agree Neither

agree nor disagree

Any disagree

% % %


646 31 35 34





488 41 32 28


405 36 29 35


727 35 34 30


122 23 33 44

SOURCE: GMI/MINTEL



FIGURE 118: AGREEMENT WITH THE STATEMENT ‘INFORMATION ON PRODUCT ORIGIN (EG JAVA VOLCANIC ISLAND COFFEE) REASSURES ME OF HIGH QUALITY’, BY DEMOGRAPHICS, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home Sample

size Any agree Neither

agree nor disagree

Any disagree

% % %


646 29 49 21





488 41 46 13


405 33 46 21


727 35 46 19


122 26 44 30

SOURCE: GMI/MINTEL



FIGURE 119: AGREEMENT WITH THE STATEMENT ‘MICRO-GROUND COFFEE (EG KENCO MILLICANO) IS WORTH PAYING MORE

FOR THAN REGULAR INSTANT’, BY DEMOGRAPHICS, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home Sample

size Any

agree Neither

agree nor disagree

Any disagree

% % %


646 26 42 32





488 32 44 25


405 28 39 33


727 31 42 27


122 21 39 40

SOURCE: GMI/MINTEL



FIGURE 120: AGREEMENT WITH THE STATEMENT ‘I WOULD BE MORE LIKELY TO BUY PREMIUM COFFEE IF THEY WERE SOLD IN

SMALLER FORMATS (EG SINGLE SERVE SACHETS, 40G JARS)’, BY DEMOGRAPHICS, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home Sample

size Any

agree Neither

agree nor disagree

Any disagree

% % %


646 25 33 42





488 31 31 38


405 27 31 42


727 31 32 38


122 16 30 53

SOURCE: GMI/MINTEL



FIGURE 121: AGREEMENT WITH THE STATEMENT ‘COFFEE POD MACHINES/PODS ARE WORTH THE COST FOR THE QUALITY YOU

GET’, BY DEMOGRAPHICS, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home Sample

size Any agree Neither

agree nor disagree

Any disagree

% % %


646 20 42 38





488 27 40 33


405 27 38 35


727 24 44 32


122 16 43 41

SOURCE: GMI/MINTEL



FIGURE 122: AGREEMENT WITH THE STATEMENT ‘COFFEE-SHOP BRANDS (EG STARBUCKS VIA) MAKE BETTER IN-HOME

COFFEE THAN BRANDS LIKE NESCAFÉ AND KENCO’, BY DEMOGRAPHICS, JUNE 2013 Base: 1,633 internet users aged 16+ who have drunk coffee at home Sample

size Any

agree Neither

agree nor disagree

Any disagree

% % %


646 21 44 35





488 25 43 32


405 23 41 36


727 25 43 32


122 17 37 46

SOURCE: GMI/MINTEL

Appendix: Research methodology

UK Research Methodology Coffee UK, August 2013

UK Research Methodology Mintel is an independent market analysis company that prides itself on supplying objective

information on a whole range of markets and marketing issues.

There are five main sources of research that are used in the compilation of Mintel reports:

Consumer research

Desk Research

Trade research

Statistical forecasting.

Mintel’s exclusive archive of over 40 years of analysis and expertise

Mintel reports are written and managed by analysts with experience in the relevant markets.

Consumer research

Exclusive and original quantitative consumer research is commissioned for almost all Mintel reports.

In addition, qualitative research is also undertaken for a large proportion of reports in the form of

online focus groups. Mintel invests a considerable sum each year in consumer research, and the

purchaser of a Mintel report benefits, as the price of an individual report is less than the cost of the

original research alone. The research brings an up-to-date and unique insight into topical issues of

importance.

Consumer research is conducted among a nationally representative sample of either adults or internet

users and is generally carried out by GMI (online), Ipsos Mori (face to face), while other suppliers are

used on an ad hoc basis as required. The results are only available in Mintel reports.

Sampling and weighting Face to Face Surveys Ipsos Mori

Ipsos MORI Capibus uses a two-stage random location sample design which generates a very high

quality sample representative of the Great Britain adult population. Interviews are sampled from 145

Output Areas, randomly selected every week, and MOSAIC is employed to set interlocking quota

controls specific to each interviewer location. This ensures consistent accurate representation of the

locations interviewed every week. By using this proven sample design, all sub-sectors of the

population are represented – at a national and regional level.

All information collected on Capibus is then weighted to reflect the known profile of the adult

population in Great Britain. Capibus uses a rim weighting system which weights to mid-2010 census

and NRS defined profiles for age, social grade, region and working status - within gender. Additional

profiles used include tenure and car in household, for example.

Because the sampling process is repeated every week, the Capibus sample is matched wave on wave,

making it ideal for taking successive measurements on the same issue.


Online Surveys

GMI

Founded in 1999, GMI’s double opt-in online consumer panel has reach to approximately 350,000

consumers in the UK. GMI delivers uniquely identified online respondents via extensive use of fraud

detection and location-verification technology at multiple points in the research cycle, from initial

registration through survey fielding and incentive redemption. GMI panelists are profiled on a wide

variety of attributes to deliver the specific hard-to-reach demographics.

TGI data

Additional quantitative data are taken from Kantar Media UK Ltd.’s Target Group Index surveys. The

main TGI survey used is a continuous self-completion survey among a representative sample of

around 25,000 adults throughout Great Britain.

Unless otherwise stated, consumer research data is presented as penetration, ie as a percentage of

demographic sub-groups (usually in rows) such as age.

Population profile

GB population profile, by demographic group, 2012 Q2

Base: adults aged 15+ All 100.0 Gender:

Men 48.8 Women 51.2 Age group:

15-24 15.7 25-34 16.1 35-44 16.8 45-54 16.9 55-64 14.2 65+ 20.3 Socio-economic group:

AB 26.4 C1 28.0 C2 21.7 D 15.4 E 8.5 Presence of children:

Under 1 year 2.4 1-4 years 10.4 5-9 years 11.2 10-15 years 14.4 No children in household 71.1 Marital status:

Single 25.7 Married/living as married 60.6 Separated/divorced/widowed 13.7 Working status:

Full-time 37.7 Part-time 14.4 Not working 47.9


Household size:

1 person 19.1 2 persons 36.0 3 persons 19.4 4 persons 16.5 5 persons+ 9.0 Region:

Greater London 12.8 South East/East Anglia 23.7 South West 8.9 Wales 5.0 East & West Midlands 16.4 North West 10.6 Yorkshire & Humberside 8.8 North 5.2 Scotland 8.6 SOURCE: TGI /MINTEL

Definitions

Socio-economic group

Socio-economic groups are based on the head of household or chief income earner and are defined as

follows:

Socio-economic group Occupation of chief income earner

A Higher managerial, administrative or professional B Intermediate managerial, administrative or professional C1 Supervisory or clerical, and junior managerial, administrative or professional C2 Skilled manual workers D Semi and unskilled manual workers E All those entirely dependent on the state long term, through sickness, unemployment,

old age or other reasons

Retired persons who have a company pension or private pension, or who have private means are

graded on their previous occupation.

Students in higher education living at home are graded on the occupation of the head of the

household. Students living away from home are graded C1 (no account is taken of casual or vacation

jobs).

Lifestage and Special Groups

In addition to the standard breaks, Mintel also analyses consumer research in the following manner.

Lifestage

Lifestages are derived from analysis of consumer research and are split into four main groups, as

follows. The following percentages are nationally representative. An internet representative would

differ slightly.

% of population

Pre-family/no family aged under 45 who are not parents 29.1 Family any age with at least one child aged under 16 still at home 24.6 Third age aged 45-64 with no children aged under 16 still at home 26.0 Retired aged over 65 with no children aged under 16 still at home 20.3


Special Groups

As part of an on-going policy to find new ways of analysing data, Mintel has created of consumers to

typify consumer habits in the early years of the 21st Century. Unlike the lifestage groups, these groups

represent only sections of the population and do not account for all adults.

% of population

ABC1 Pre/no family ABC1 Socio-economic group and in the pre/no

family lifestage 16.7

ABC1 Families ABC1 Socio-economic group and in the family lifestage

12.7

ABC1 Third Age ABC1 Socio-economic group and in the third age lifestage

13.5

ABC1 Retired ABC1 Socio-economic group and in the retired (65+) lifestage

11.1

Two full-time earners couples where both partners work full-time 16.1 One person households under 65 aged under 65 and living alone 11.2 SOURCE: TGI / MINTEL

ACORN

Some reports also use consumer research analysed by ACORN category. ACORN is a geo-

demographic segmentation method, using census data to classify consumers according to the type of

residential area in which they live. Each postcode in the country can, therefore, be allocated an

ACORN category.

The classification is a more powerful differentiator of consumer behaviour than traditional socio-

economic and demographic indicators. The categories, and their components, are as follows:

ACORN category ACORN group % of population 19.3 Wealthy Achievers – Category 1 A – Wealthy Executives 5.7 B – Affluent Greys 6.2 C – Flourishing Families 7.4 10.4 Urban Prosperity – Category 2 D – Prosperous Professionals 1.9 E – Educated Urbanites 4.6 F – Aspiring Singles 3.9 29.7

Comfortably Off – Category 3 G – Starting Out 5.1 H – Secure Families 15.9 I – Settled Suburbia 6.8 J – Prudent Pensioners 1.9 16.8 Moderate Means – Category 4 K – Asian Communities 1.9 L – Post Industrial Families 5.4 M – Blue Collar Roots 9.5 23.3 Hard Pressed – Category 5 N – Struggling Families 15.0 O – Burdened Singles 4.5 P – High Rise Hardship 1.6 Q – Inner City Adversity 2.2

SOURCE: TGI / MINTEL


Confidence levels

Statistical confidence levels of + or – 2% or 3% can be applied to the data, depending on sample size

and percentage of respondents. For example, if 20% of a total sample of 1,000 adults say that they do

something, you can be 95% certain that the figure for the population lies between 17% and 23%. For a

sample of 2,000 adults, you can be 95% certain that the figure lies between 18% and 22%.

Consumer research is stored in a database supervised by Mintel’s statisticians. Additional analysis of

information too abundant to be included in published reports may be available for an additional

charge.

Qualitative Research Toluna/ 2020 Research

Toluna in partnership with 20/20 Research provide Mintel with qualitative bulletin board software.

This allows the creation of Internet-based, ‘virtual’ venues where participants recruited from Mintel’s

online surveys gather and engage in interactive, text-based discussions lead by Mintel moderators.

Trade research

Informal

Trade research is undertaken for all reports. This involves contacting relevant players in the trade, not

only to gain information concerning their own operations, but also to obtain explanations and views of

the strategic issues pertinent to the market being researched. Such is Mintel’s concern with accuracy

that draft copies of reports are sent to industry representatives, to get their feedback and avoid any

misrepresentation of the market. These comments are incorporated into reports prior to final

publication.

Formal

Internally, Mintel’s analysts undertake extensive trade interviews with selected key experts in the field

for the majority of reports. The purpose of these interviews is to assess key issues in the market place

in order to ensure that any research undertaken takes these into account.

In addition, using experienced external researchers, trade research is undertaken for some reports. This

takes the form of full trade interview questionnaires and direct quotes are included in the report and

analysed by experts in the field. This gives a valuable insight into a range of trade views of topical

issues.

Desk research

Mintel has an internal team of desk researchers who monitor: government statistics, consumer and

trade association statistics, manufacturer sponsored reports, annual company reports and accounts,

directories, press articles from around the world and online databases. The latter are extracted from

hundreds of publications and websites, both British and overseas. All information is cross-referenced

for immediate access.

Data from other published sources are the latest available at the time of writing the report.

This information is supplemented by an extensive library of Mintel’s reports produced since 1972 and

added to each year by the 500+ reports which are produced annually.


In addition to in-house sources, researchers also occasionally use outside libraries such as the British

Library or the Department of Trade and Industry. Other information is also gathered from store and

exhibition visits across Europe, as well as using other databases within the Mintel Group, such as the

Global New Product Database (GNPD), which monitors FMCG sales promotions.

All analysts have access to Mintel ’s Market Size and Economic Database – a database containing all

areas of consumer spend and retail sales as well as macroeconomic and demographic factors which

impinge on consumer spending patterns, going back some 20 years.

The database is used in conjunction with an SPSS forecasting program which uses weighted historical

correlations of market dynamics, with independent variables, to produce future spending scenarios.

Statistical Forecasting

Statistical modelling

For the majority of reports, Mintel produces five-year forecasts based on an advanced

statistical technique known as ‘multivariate time series auto-regression’ using the statistical

software package SPSS.

Historical market size data feeding into each forecast are collated in Mintel’s own market size

database and supplemented by macro- and socio-economic data sourced from organisations

such as the Office for National Statistics, HM Treasury and the Bank of England.

Within the forecasting process, the model searches for, and analyses relationships between,

actual market sizes and a selection of key economic and demographic determinants

(independent variables) in order to identify those predictors having the most influence on the

market.

Factors used in a forecast are stated in the relevant report section alongside an interpretation

of their role in explaining the development in demand for the product or market in question.

Qualitative insight

At Mintel we understand that historic data is limited in its capacity to act as the only force

behind the future state of markets. Thus, rich qualitative insights from industry experts

regarding future events that might impact upon various markets play an invaluable role in our

post statistical modeling evaluation process.

As a result, the Mintel forecast complements a rigorous statistical process with in-depth

market knowledge and expertise to allow for additional factors or market conditions outside of

the capacity of the statistical forecast.


The Mintel fan chart

Forecasts of future economic outcomes are always subject to uncertainty. In order to raise

awareness amongst our clients and to illustrate this uncertainty, Mintel has introduced a new

way of displaying market size forecasts in the form of a fan-chart.

Next to historical market sizes and a current year estimate, the fan chart illustrates the

probability of various outcomes for the market value/volume over the next five years.

At a 95% confidence interval, we are saying that 95 out of 100 times the forecast will fall

within these outer limits, which we call the best and worst case forecasts. These, based on the

statistically driven forecast, are the highest (best case) and lowest (worst case) market sizes

the market is expected to achieve.

Over the next five years, the widening bands successively show the developments that occur

within 95%, 90%, 70% and 50% probability intervals. Statistical processes predict the central

forecast to fall within the darker shaded area which illustrates 50% probability, i.e. a 5 in 10

chance.

A general conclusion: Based on our current knowledge of given historic market size data as

well as projections for key macro- and socio-economic measures that were used to create the

forecast, we can assume that in 95% of the time the actual market size will fall within the

purple shaded fan. In 5% of all cases this model might not be correct due to random errors and

the actual market size will fall out of these boundaries.

Weather analogy

To illustrate uncertainty in forecasting in an everyday example, let us assume the following

weather forecast was produced based on the meteorologists’ current knowledge of the

previous weather condition during the last few days, atmospheric observations, incoming

weather fronts etc.


Now, how accurate is this forecast and how certain can we be that the temperature on

Saturday will indeed be 15°C?

To state that the temperature in central London on Saturday will rise to exactly 15°C is

possible but one can’t be 100% certain about that fact.

To say the temperature on Saturday will be between 13°C and 17°C is a broader statement

and much more probable.

In general, we can say that based on the existing statistical model, one can be 95% certain that

the temperature on Saturday will be between 13°C and 17°C, and respectively 50% certain it

will be between about 14.5°C and 15.5°C. Again, only in 5% of all cases this model might not

be correct due to random errors and the actual temperature on Saturday will fall out of these

boundaries and thus will be below 13°C or above 17°C.

( To learn more about uncertainty in weather forecasts visit:

http://research.metoffice.gov.uk/research/nwp/ensemble/uncertainty.html )

http://research.metoffice.gov.uk/research/nwp/ensemble/uncertainty.html


European Research Methodology

Mintel surveys the four major European markets - France, Germany, Spain and Italy - with varying

samples of 1,000 and 2,000 adults aged 16+. The surveys are conducted online, via GMI, spanning ten

waves of research a year and all are representative of the online population in each country with quotas

on age, gender and region.

GMI

Founded in 1999, GMI’s double opt-in online consumer panel has reach of approximately 240,000

consumers in Germany, 210,000 consumers in France, 110,000 consumers in Italy and 90,000

consumers in Spain. GMI delivers uniquely identified online respondents via extensive use of fraud

detection and location-verification technology at multiple points in the research cycle, from initial

registration through survey fielding and incentive redemption. GMI panelists are profiled on a wide

variety of attributes to deliver the specific hard-to-reach demographics.

Documents

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