UK Coffee Shops Expected to Be a Lucrative Business in 2018

This is not the first time Sycphus have stressed that the Coffee Shop Business, both Branded and Boutique are growing to grow by leaps and bounds for the coming many years. They write again on Coffee Market and Possibilities.

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Leslie Carr wrote about coffee business and the potential on the Branded Paper Cups blog was back in 2014 when he wrote about the "5 steps to a successful startup coffee shop". Since then Scyphus have been pretty upbeat about the potential of gourmet coffee, boutique coffee shops and everything related to coffee market, and they have been writing about it regularly. This is an updated review of the market as it stands in 2018.

Project Café2018 UK, a report recently published by Allegra World Coffee Portal, reveals that the coffee industry is boding well in the United Kingdom (UK). For 2017, the total UK coffee shop market expanded with 1,215 new stores seeing the day. The coffee shop market thus reached 24,061, reflecting a growth of 5.3%. For 2018, a similar positive trend is expected to carry forward the coffee market as players in the industry remain confident about the trading environment. According to Allegra, by 2022 the total number of coffee shops in the UK will exceed 31,400 outlets. This should generate a turnover of more than US$ 18 billion. 

The coffee industry reflected a healthy performance in 2017. 71 % of executives in the sector questioned by Allegra equally state that they remain positive for the industry this year. The report highlights that Britons have a penchant for Costa Coffee, Starbucks Coffee, and Caffè Nero, helping the companies dominate the coffee market with 2,326, 956 and 675 outlets respectively. Altogether they represent 52.9 % of the total branded chain market share. For the eighth consecutive year, Costa Coffee was voted as the ‘Nation’s Favourite’ coffee shop by an independent panel of consumers.

The global coffee industry is also faring well. For the 2018-2019 season, the global coffee supply is anticipated to reach a 4 million 60 kilogram bag surplus. Traders and analysts expect Brazil to harvest a record crop of about 60 million bags, making 44 million bags of arabica and 16 million bags of robusta varieties of coffee. For the next five years, the total market is expected to grow by about 1.1%. 

Artisan coffee has triggered a new era of development

Artisan coffee mushroomed in the mid-2000s and is now enjoying a peak in the UK. Initially considered as a niche market, it is now widespread in the country, bringing about a fresh wave of outstanding professionalism as well as a new level of development. Referred to as the ‘5th wave’ or ‘the business coffee’, artisan coffee is urging multiple sophisticated chains to innovate and offer boutique concepts through high-end business practices.

Allegra’s report equally revealed that certain specialized artisanal chains such as Gail’s, Grind, and Joe & The Juice enjoyed a considerable growth in 2017 by embracing the ‘5th Wave’ trend with the aim to attract Millennials who are known to be more discerning and less influenced by brands. As such, premium-quality coffee and service were the keywords adopted by the chains in their strategy. In the wake of this new trend, other leading brands are adopting the same steps to compete for excellence. More than ever, they are laying significant focus on customer experience in the hope to stay ahead of competitors. This strong sense of competition coupled with the similar endeavour for excellence and professionalism is helping the coffee market remain robust. Simultaneously, this fertile environment is presenting opportunities for brands to capitalise on.

Coffee brands are redefining meanings

Years ago, the coffee market rumbles with brands playing the same game. Today, the scene is obviously different; established rules are rapidly becoming outdated as the quest is now to give a new meaning to coffee which was viewed since a long time simply as a beverage to give an energy fix. If certain coffee shops or brands may find it frightening to have to revamp the very foundation of their concept, others are taking this as an opportunity to make their business lucrative.

Many brands have understood that coffee is no longer just coffee. By subtly knowing how to change its meaning and everything associated with it, they are changing the very dynamics of the coffee market. These brands are encouraging consumers to pay attention and explore the essence of what they are drinking. A multiplicity of tastes, experiences, and emotions are all being intricately linked to allow consumers explore and discover. Suddenly, by adding value to everything around coffee, the beverage means so much more than just coffee.  

For instance, if nitrogen coffee and cold brews are already varieties that are much appreciated, new recipes keep on mushrooming. The latest trend is the butter coffee also known as Bulletproof coffee where a grass-fed butter and medium-chain triglyceride (MCT) oil are added to coffee to supposedly cur appetites and help in weight loss. Another hot trend is the Greenlandic coffee which is concocted with a mixture of Kahlua, whiskey, Grand Marnier and a dash of whipped cream. This trending beverage on Instagram is generally accompanied by dinner or a food platter. Obviously, the possibilities for innovation and surprise seem endless and are definitely not ready to be exhausted so soon.

Coffee shops are reviving the art of hospitality

Since some years coffee shops have become a place for social or business meetings. For certain people, they have even become a second office; seeing consumers having their cup of coffee while typing on their laptops or other connected devices is a usual scene. However, a growing number of owners wish to transform their coffee shops by bringing back the art of hospitality and conviviality by banning laptops and stopping free Wi-Fi on the premises.

With the strong urge to focus on meanings, they hope to encourage people to have a natural cycle that they would have as in old times: enjoying their coffee, having some food, engaging in a conversation and leaving with a smile. Without laptops and Internet consumers would naturally be more inclined to consider this coffee moment as a break or escape from the tedious day and get untangled rather than just another spot to continue working or check their social networks.  In other words, these brands want their consumers to take time to appreciate the simple yet important pleasures in life, and of course, engage in the atmosphere and enjoy what the coffee shop has to offer. This old-fashioned hospitality is also multipronged as it equally represents an endeavour to demarcate oneself from competitors and consequently amplifying revenues by betting on a niche market. 

Source: Scyphus Ltd

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