Supply issues set to hike tea and coffee prices

20 March 2017 by
Supply issues set to hike tea and coffee prices

This is according to research from purchasing company Beacon, which warns of the impact this could have on tea and coffee shops across the country considering passing the increased trade cost to their customers.

Coffee supply continues to struggle to meet demand, leading to a 4.9% year-on-year price increase in the coffee market, while droughts in Kenya have also heavily impacted tea supply, according to recent CGA data.

The survey found 75% said tea or coffee was their first drink of the day, compared to just 8% who opt for juice. Of those, almost 40% said they would order a speciality tea or coffee at least once a week - with 7% purchasing them on a daily basis - equating to an estimated weekly spend of £53.9m across the UK.

Some 65% of drinkers said they would not be willing to pay over £2.99 for a speciality drink - the average price for a cup of coffee at Starbucks is around £3.

Other findings from the research showed that, while English breakfast reigns supreme, over a third of consumers prefer drinks such as flat white, herbal tea, cappuccino or latte, to a standard tea or coffee.

A recent report from Tetley, also showed the importance of the tea market to the UK economy, with this category contributing around £3.4b in out-of-home sales in 2016.

Paul Connelly, Beacon managing director, said: "The tea and coffee market has seen a lot of fluctuation recently, with weather conditions and the political climate having a major impact on price. The trend for drinks with an American and Australian influence has changed the hot drinks market completely, with consumers now spoilt for choice when they enter a coffee shop.

"From our research, we know that there continues to be huge demand for these speciality drinks, which is driving growth in the category, however it's also placing strain on supply that inevitably leads to price increases."

Tetley's launches first Tea Report >>

Rise and shine: breakfast beverages to lift sales >>

Tea time: how to increase beverage sales >>

Videos from The Caterer archives

Are you looking for a new role? See all the current hospitality vacancies available with The Caterer Jobs

The Caterer Breakfast Briefing Email

Start the working day with The Caterer’s free breakfast briefing email

Sign Up and manage your preferences below

Check mark icon
Thank you

You have successfully signed up for the Caterer Breakfast Briefing Email and will hear from us soon!

Jacobs Media is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.

close

Ad Blocker detected

We have noticed you are using an adblocker and – although we support freedom of choice – we would like to ask you to enable ads on our site. They are an important revenue source which supports free access of our website's content, especially during the COVID-19 crisis.

trade tracker pixel tracking