2022 was not short of challenges for those in the restaurant, coffee shop and F2G sectors; from soaring energy costs, labour shortages, supply chain challenges and more but as a whole the coffee industry remained positive believing trading conditions would improve in the year ahead.
So what trends are on the horizon for 2023 that could help your coffee sales soar? Here we break down 3 key areas of opportunity all of which derive from truly understanding one key piece of information…’Who are your customers?’. This piece of information is vital to help you understand which trends for the year ahead provide your business with growth opportunity.
1. Customisation
The growth in being able to customise coffee based drinks continues to grow, from flavours to milk products to functional options this area is full of sub sectors that provide both niche and broad opportunities for growth. Here’s a run-down of five to explore.
- Iced coffee – as temperatures soared in 2022 consumers turned to iced versions of their favourite coffees to help them cool down but still enjoy their caffeine fix. Iced coffee saw a 22.8% increase in sales1 resulting in it contributing the majority of the 8.8% growth seen in the dairy drinks category. With warm temperatures expected in 2023 it is likely this will be an area of growth during the warmer months.
“Iced coffee drove 7% of the growth in the entire soft drinks market.” (Head of Beverages at Arla)2
- Flavoured coffee – providing an all year round opportunity the ‘syrups-for-coffee’ market segment provides an opportunity to capitalise on the consumers desire to customise their coffee. Peak seasonal events such as Easter, Halloween and Christmas provide increased opportunity to bolster this footfall. Some companies have taken this further by creating flavours that not only target specific age groups and trends but locality too.
- Mocktails and cocktails – in line with the increase in demand for customisation through flavour, there is also an opportunity for cold brew cocktails, popular among consumers under 40 years old who are looking for new drinks to explore this area has already seen some bars and restaurants successfully offer espresso martinis and frozen Irish coffee on tap.3
- Functional coffee – with the continued rise in the health and wellness sector functional coffee is a more niche opportunity but, one that with the right audience provides growth opportunity. The functional coffee sub segment sees coffee mixed with ingredients such as botanicals and vitamins e.g. turmeric and matcha those perceived as ingredients that offer functional benefit.4
- Milk alternatives – although dairy milk (semi-skimmed for the UK)5 currently remains the most popular in coffee shops, oat milk continues to gain pace and is deemed as the best dairy alternative to pair with coffee. If you are stocking milk alternatives ensure that your team know how to prepare them, this is an important part of providing your customers with a consistent experience.
2. Convenience
From drive-thru to delivery and ready to drink (RTD) products ensure the ability to access your products are convenient.
- Drive-thru – Where other countries see drive-thru models adopted during COVID continuing to be fruitful and help reduce the labour shortage challenges it seems UK consumers are still growing in terms of this model. 70% of UK consumers under the age of 30 indicated they would use a drive-thru if they were more readily available and only 40% of those over 50 agree.6
- Beverage delivery – another area that is being adopted across the world. In the UK Costa Coffee who utilised the likes of Uber Eats and Deliveroo saw sales via this delivery method grow by 10% between June 2022 – September 2022.7 This method when it comes to beverage delivery appears to be in the early stages of consumer adoption with only 24% of UK consumers indicating they would order coffee for delivery if the service was more available.8
- Ready to drink (RTD) – 2022 saw a 27% increase in sales of RTD products with them being particularly popular among Gen Z and Millennial consumers9. The ultimate in convenience, enabling a ‘grab and go’ via food to go outlets (F2G).
3. Eco-conscious
As an industry there is a responsibility to ensure that operations continually strive to be as sustainable as possible. At individual outlet levels there are multiple ways in which environmental impact can be reduced and this should be reviewed and implemented as part of your overall business strategy. In terms of coffee provision to consumers there are two key areas that should be considered and actively supported by all in the industry.
- Coffee cups – cited as the most important sustainability issue for the industry to solve.10 From recycling points, to initiatives such as the Cup Collective that aims to recycle half a billion cups within two years to mandatory levy’s on disposable cups that are being proposed in new legislation for Republic of Ireland this is a topic that needs to be supported by all. Whether you can encourage consumers to utilise re-usable cups through incentives, provide your own recycling scheme, ensure the cups you do need are sustainably sourced, there are many options to help support making the use of coffee cups more sustainable.
- Coffee pods – as coffee pods soar in use as consumers adopt the convenience and ease of pod machines at home, it also sees an increase in the number of pods heading to general waste and onward to landfill. With the majority of pods being made from aluminium they are a perfect candidate for recycling and reuse again and again. With pod recyclers now more widely available they provide a quick and easy way to separate the pod shell and grounds leaving a coffee free pod ready to be recycled. If you are selling coffee pods or pod machines educate your consumers and help reduce the amount of pods going to landfill.
These are just some of the trends we expect to see across 2023. If you’re looking to grow your existing coffee sales or, introduce coffee as a new growth opportunity to your existing business get in touch. With over 30 years’ experience in coffee we can help you make the most of these growing trends.
Sources
- https://www.thegrocer.co.uk/the-dairymen/flavour-of-the-year-the-dairymen-dairy-drinks-category-report-2022/671740.article
- https://www.thegrocer.co.uk/the-dairymen/flavour-of-the-year-the-dairymen-dairy-drinks-category-report-2022/671740.article
- https://marcobeveragesystems.com/breaking-down-the-biggest-emerging-coffee-shop-trends-in-2022/
- https://marcobeveragesystems.com/breaking-down-the-biggest-emerging-coffee-shop-trends-in-2022/
- https://www.thegrocer.co.uk/the-dairymen/flavour-of-the-year-the-dairymen-dairy-drinks-category-report-2022/671740.article
- https://www.worldcoffeeportal.com/Latest/InsightAnalysis/2023/January-(2)/Global-coffee-shop-trends-to-watch-in-2023
- https://www.worldcoffeeportal.com/Latest/InsightAnalysis/2023/January-(2)/Global-coffee-shop-trends-to-watch-in-2023
- https://www.worldcoffeeportal.com/Latest/InsightAnalysis/2023/January-(2)/Global-coffee-shop-trends-to-watch-in-2023
- https://marcobeveragesystems.com/breaking-down-the-biggest-emerging-coffee-shop-trends-in-2022/
- https://www.worldcoffeeportal.com/Latest/InsightAnalysis/2023/January-(2)/Global-coffee-shop-trends-to-watch-in-2023