Britain’s love for a caffeinated drink – be it coffee or tea – remains as strong as ever and now is the time for convenience to reap the rewards.
By Elena Dimama
Some things hardly change – and Brits’ love for beverages is one of them.
According to Mintel, 48% of British tea lovers say they sometimes drink tea as an alternative to alcohol. At the same time, sales of ready-to-drink (RTD) iced coffee rose to over £44m within independents by the end of 2022. The RTD segment is crucial to watch for convenience, as its increasing appeal can drive sales, especially in the summertime.
Smell the coffee
“The surge in brand innovation around ready-to-drink coffees presents convenience stores with a big opportunity to tap into the UK’s coffee market and capture the younger generations who are leading the way in the RTD sector,” says Scott Markham, Founder of Rokit Health.
Indeed, revenue in the RTD coffee segment amounts to £87.30m in 2023 and is expected to grow annually by 5.12% (CAGR 2023-2027) according to Statista, with research showing that Generation-Z shoppers are more likely to consume RTD coffee than brewed coffee. Caramel (+36%), Mocha (18.4%), Espresso (+16%) and Latte (+14%) are the top four flavours in the space and account for 84% of the category’s sales value, according to IRI.
“We’re finding that consumers are increasingly looking for coffee products that do much more than just offer a caffeine hit. They want something with great taste, more natural ingredients, and less sugar,” Markham adds. “Innovation is the number one driver for RTD dairy-free beverages, with brands like Rokit Health catering to flavour and wellness trends with new product launches.”
Following these trends, Coca-Cola Europacific Partners (CCEP) recently launched its first-ever on-pack promotion for its Costa Coffee ready-to-drink (RTD) chilled Coffee Latte range. The promotion is designed to reward Costa fans, keep the brand front of mind and help drive sales for retailers during the important summer period.
Running until 30 September, consumers can scan QR codes on promotional 250ml cans of Costa Coffee Latte, Caramel Latte and Vanilla Latte variants.
“Our first-ever on-pack promotion and uplifting summer campaign will reward our Costa Coffee fans with exclusive experiences and prizes,” says Pippa Foster, Associate Director of Commercial Development at CCEP GB. “The Costa Coffee chilled RTD range has already enjoyed tremendous value and volume sales growth over the last year, and is now the fastest-growing major chilled coffee brand in GB, so we’re confident this will help maintain the growth momentum.”
“The RTD chilled coffee sector in convenience is growing ahead of the total market so we wanted to further incentivise convenience retailers to get behind the on-pack promotion by giving something back to them and their local communities in addition to the existing prizes for their shoppers.”
Stocking up on brands that offer innovation and a diverse range of products appears to be key in tapping into this growing trend. “We know that the RTD Iced Coffee category is growing rapidly at +24% volume and +31% value YOY, providing a huge opportunity for retailers to draw customers in and maximise sales,” Adrian Hipkiss, Marketing Director at Boost Drinks, notes. “To successfully capitalise on this trend, retailers and wholesalers should provide enough space to allow for future growth in the category and stock fast-growing brands such as Boost.”
Müller Milk & Ingredients has launched a mainstream dairy barista milk line in Tesco and One Stop stores.
Aimed at coffee lovers wishing to recreate professional-quality coffees at home, the Müller Good Stuff Barista Milk can be frothed with any domestic frothing gadget, warmed and whisked, or added cold.
The brand will roll out the range to more retailers this month.
Helen Priestley, Marketing and Category Director for Müller Milk & Ingredients, said: “Sourcing and sustainability are becoming increasingly important for our customers and consumers and that’s why we’re reinforcing the British milk and natural ingredients messaging on our fully recyclable packaging.
“The carton will also carry a QR code for consumers to scan and find out more about Müller’s sustainability plans as well as more information on Müller Good Stuff Barista Milk.”
Cuppa love
As the cost-of-living crisis continues, Mintel research has found that a “posh” cup of tea is proving to be a viable luxury, as two-thirds (64%) of those swapping alcohol for tea believe that high-quality teas are an affordable treat. And in a bid to tighten the purse strings, savvy Brits are turning to their faithful flasks as half (48%) of tea lovers say they like to save money while out of home by bringing their own tea with them in a thermos or travel mug. This rises to 67% of tea lovers aged 25-34.
“Six in ten (61%) people think drinking tea is a good way to boost mood, rising to 70% of tea drinkers. The cost-of-living crisis will increase the appeal of this wellbeing, boosting perception as consumers seek out emotional support during stressful times,” Angharad Goode, Mintel Research Analyst, mentions.
Emmi has launched limited-edition Love Island packaging and a new popcorn flavour to mark the second year of its partnership with the ITV2 reality show.
The brand is also running competitions, with prizes including Love Island merchandise and two pairs of all-expenses-paid tickets to watch the final in Majorca.
John Mulvey, Head of Marketing at Emmi UK, said: “There can be a lot of FOMO about missing out on Love Island, so we’ll be supporting our partnership with a campaign amplifying the moments people love across traditional and social media, be that revelling in the gossip when we ‘spill the beans’ or connecting with friends over that morning coffee and a catch-up on the drama from the show.”
