Get the latest hospitality news and inspiration straight to your inbox. Subscribe to our newsletter.

Some like it hot: the rise of the coffee shop

Written by:
Written by:
Some like it hot: the rise of the coffee shop

Drinkers are heading to their new local – the coffee shop – rather than the pub, so operators should be ready to offer a wide range of brews and infusions to keep them happy, says Richard McComb

For business or pleasure, the deal – or the mates’ catch-up – is increasingly likely to be done over the bean or the leaf, rather than the grain and the grape. Coffee shops and cafés have put the squeeze on pubs and bars as the nation’s appetite for flat whites continues to put the ‘mochas’ on out-of-home beer and wine consumption.

Although there are still fewer coffee shops than pubs, the two sectors are experiencing contrasting fortunes, offering big opportunities for operators championing innovation in hot beverages. According to Allegra World Coffee Portal, the total UK coffee shop market comprises 22,845 outlets and posted a turnover of £8.9b in 2016. That is approaching half the revenue of the pub and bar trade (£18b) as calculated by industry experts at IBISWorld.

Twinings Bollywood Chai Latte
Twinings Bollywood Chai Latte

Significantly, Allegra expects turnover in the coffee shop market, now viewed as ‘the local of choice,’ to hit £16b in eight years – with coffee units outstripping pubs by 2030.

At the same time, much has been made of the fact coffee has knocked tea off its perch, with Britons drinking two-and-a-half cups of coffee for every cuppa away from home. Tea consumption may be down nearly 19% on 2010, but the market is still huge, accounting for 874 million cups in 2015, according to global information company the NPD Group.

A refined palate
In the battle of the baristas, Kerttu Inkeroinen, marketing director at Union Hand-Roasted Coffee, points to consumers’ rising expectations and taste sophistication through the movement away from dark, bitter roasts to lighter roasts, which bring out natural flavours.

It is important not to forget the basics, too. Andrew Jack, head of marketing at Matthew Algie, says operators should prioritise training and machine maintenance, as this affects beverage quality. The company’s sales managers provide on-site training and advice on topics ranging from efficiency to seasonal menus.

Sweet syrups are a great way to add value to a latte or cappuccino and Matthew Algie’s Espresso Warehouse catalogue offers a range of flavours, such as Nutty Caramel Latte and Salted Caramel Latte. Monin recommends matching flavoured hot drinks with snacks and treats.

“It’s a great way to upsell, especially when they are promoted together at a special price,” says Lee Hyde, Monin’s beverage innovation manager. “Customers are happy to spend more money, so long as they feel they are getting luxury treatment.”

Union Coffee
Union Coffee

Bag of tricks
Less headline-grabbing is the convenience offered by coffee-in-a-bag options, which are ideal for hotel bedrooms and conference centres. They work in much the same way as teabags and do not leave messy grounds.

Café du Monde’s Coffee in a Bag comes in biodegradable, aluminium-free sachets. The company produces a Rainforest Alliance Certified 100% Arabica blend with coffees from El Salvador, Rwanda and Sumatra and a decaffeinated blend from Brazil, Peru and Honduras. The coffees are packed in dispenser boxes of 100 with a flip-down lid and are ideal for self-service or housekeeping.

Lyons has seen value sales of coffee bags rise by 15% year-on-year. “Coffee bags require minimal effort, and they use 100% fresh roasted coffee beans, so they produce a great-quality drink for customers to grab on the go, plus they can brew the bag to their own strength preference,” says Phil Smith, head of category and insight at UCC Coffee.

“Coffee is a perfect vehicle for maximising sales during slow trading times. A promotional offer for coffee and cake is a great way to drive sales, but make sure you also appeal to the more health-conscious coffee drinkers, for example those drinking black coffee, and offer healthier snacks.”

Nespresso continues to broaden its offer. After the introduction of the Pure Origin range in 2015, it has added two new flavours: Espresso Caramel and Espresso Vanilla, bringing the professional Grand Cru range to 13 flavours.

Matthew Algie
Matthew Algie

Not to be outdone, Bidvest Foodservice is launching the Black + White Coffee Co label to enable foodservice outlets to deliver the best coffee experience at a reasonable price. There are four different blends, including Fairtrade and single-origin options, as well as both dark and medium roasts.

Bean-to-cup machines are a good option if time is critical. Justin Stockwell, managing director of Caffeine Ltd, insists the machines are faster than a barista, capable of delivering 350 beverages per hour, and the quality is “just about indistinguishable.”

A new leaf
So what of tea, the deposed queen of the hot beverages market? Sales may have dipped, but Britons’ love affair with the humble leaf is far from over as consumers embrace new tastes.

Natalie Cross, out of home manager at Taylors of Harrogate, says: “While black tea should always take prime position on a tea menu, out-of-home establishments can capitalise on trends by increasing their range and variety of tea to incorporate speciality black teas, seasonal flavours and more unusual blends.”

Taylors has a range of fruit and herbal infusions, including Peppermint Leaf, Lemongrass & Ginger and best-selling Sweet Rhubarb. It has also developed a range of tea cocktails, iced teas and smoothies, including the whiskey and Yorkshire tea sour and a green tea and blueberry smoothie.

Tetley’s Envelope range includes fruit and herbal blends. Berry and lemon flavours are the most popular, with blends featuring Raspberry and Pomegranate and Lemon and Ginger.

Twinings Apple & Elderflower Tea
Twinings Apple & Elderflower Tea

The company launched Tea Masters, an online training platform, in October. Marshall Kingston, Tetley’s senior brand manager for out of home, says: “It is important that staff have the knowledge and confidence to offer advice on the variety of tea blends they offer. A key point we cover is the art of the perfect tea serve. It’s important to ask your customers, ‘How do you like your tea?’”

Tea can also play a crucial role in driving sales during the afternoon lull. Kathryn Oldershaw, marketing director at tableware specialist Utopia, points to the boom in afternoon tea sales where presentation is everything. “It’s about the whole experience of the occasion,” she says. “And in a world where social media dominates, the theatre of the serve and its social shareability can have a huge impact upon sales. Try choosing a theme for your afternoon tea to capitalise on this. For a truly traditional feel, floral and ditsy prints evoke a sense of charm and nostalgia, making for the perfect kitsch serve.”

Jacqui Chapman, Twinings shopper marketing manager, says: “The most successful operators are those already responding to this increased consumer demand by promoting pure and flavoured green teas and fruit and herbal infusions alongside their regular black tea offering.”

The rise in popularity of chai – up 28% year on year – is even more pronounced, and Chapman says chai lattes are a great way to attract younger consumers. She adds: “Outlets should use a strong black tea, such as Assam, as a base. While traditionally the spices would be added separately, Twinings adds them to the tea for convenience.”

Teapigs Feel-good teas
Teapigs Feel-good teas

Teapigs taster and co-founder Louise Cheadle flags up the “explosion” of the matcha market. Teapigs sells a premium organic Japanese matcha, ideal for green tea or green matcha latte. “Consumers are looking for drinks that give them specific health benefits and demand for healthy green and herbal teas is growing,” says Cheadle.

And with summer not far off, it might be time to consider cooling things down – with iced coffee and tea.

Super-smooth “nitro cold brew” coffee, infused with nitrogen gas, is tipped for big things in 2017. It is slightly sweeter than traditionally coffee and appeals to new drinkers who do not like “bitter” tastes, according to Wyatt Cavalier, co-founder at Honest Coffees. “Darker roasts tend to suit cold brew better, because the cold brew process dampens and mutes many of the coffee’s aromas and tasting notes,” says Cavalier.

Nespresso
Nespresso


Suppliers

Black + White Coffee Co (via Bidvest Foodservice)
www.bidvest.co.uk

Café du Monde
www.cafedumonde.co.uk

Lyons
www.lyonscoffeeuk.com

Matthew Algie
www.matthewalgie.com

Monin
www.monin.com

Taylors
www.taylorsoutofhome.co.uk

Teapigs
www.teapigs.co.uk

Union
www.unionroasted.com

Utopia
www.utopia-tableware.com

Start the discussion

Sign in to comment or register new account

Start the working day with

The Caterer’s free breakfast briefing email

Sign up now for:

  • The latest exclusives from across the industry
  • Innovations, new openings, business news and practical advice
  • The latest product innovations and supplier offers
Sign up for free