Branded coffee chain sector growth mapped as garden centre interest grows

The branded coffee chain market recorded £2.6 billion turnover across 5,531 outlets in 2013, delivering sales growth of 9.3 per cent and outlet growth of 5.9 per cent, according to Allegra Strategies report Project Café 13 UK.

The total market is 16,501 outlets and grew 6.4 per cent in the last quarter with £6.2bn total turnover. In 2013 306 stores were added.

Costa Coffee (1,670 outlets), Starbucks Coffee Company (790) and Caffè Nero (560) remain the UK’s leading brands with 54 per cent branded chain market outlet share. Costa added 118 UK outlets and 18 per cent sales growth in calendar 2013.

The Garden Centre Group is planning to add Costas, as indicated by new food and beverage director Jason Danciger at the HTA Catering Conference on 12 February.

Other delegates such as Alan Roper and Jemma Swallow said serving high quality tea was a potential point of difference for garden centres, while HTA director Carol Paris said the whole garden centre catering market was now worth £200m and provided a footfall driver for garden retailers.

One in five coffee shop visitors visit coffee shops every day compared with one in nine in 2009, drinking an estimated 1.7 billion cups of coffee per year in coffee shops.

Allegra forecasts the total UK coffee shop market will exceed 20,500 outlets and turnover of £8.7 billion by 2018, with 4.5 per cent annual outlet growth over the five-year period.

The branded coffee shop segment is forecast to exceed £4.1 billion across 7,000 outlets by 2018, with outlets predicted to grow at 5.2 per cent compound and revenue at 10.0 per cent compound over the next five years.  It is estimated that the UK has the long-term potential to comfortably host more than 9,500 branded coffee shops.

Allegra Strategies’ managing director Jeffrey Young said: "The UK coffee shop industry is showing consistent strong growth in both sales and outlets.  Britain is now a nation of great coffee drinkers.  The UK consumer increasingly appreciates a quality cup of coffee and operators must continue to deliver innovation, fantastic quality while genuinely engaging with customers in order to stay ahead of the curve.

"UK Consumers will become even more knowledgeable on the subtleties of coffee preparation and delivery from bean to cup, in particular origin, roast, as well as the importance of milk foaming and water quality.  We expect to see growing consumer interest evolving beyond simple commoditisation of coffee as a drink, with artisan cafés and branded chains increasingly educating them about the craft of coffee."

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