High hopes

With figures currently cited as 1.7 billion cups of coffee in coffee shops and more than 60.2 billion cups of tea being consumed by Brits annually, it’s no wonder that operators have to up their game to satisfy savvier consumers. They are now experts in their choice of beans and leaves, and have standards for their brews – coffee, tea and chocolate – that they won’t give up.

However, with the possibility of prices rising for these commodities, operators have to ensure their offer justifies any increase. The latest report from the International Coffee Organisation, for example, shows that coffee prices soared at the beginning of the year, and there is still uncertainty about the crop from Brazil, a source of high quality Arabica beans, because of a serious drought problem.

There is a glimmer of good news, however, from foodservice specialist Horizons. It has predicted some growth in the market during 2014 and believes UK’s coffee outlets will be among the first to benefit from the improved economy and consumers looking for a relatively cheap and easy way to treat themselves.

High street chains have been flagging up high quality offers in their promotional activity. For example, Greggs’ recent media campaign highlighted that every coffee it brews is freshly ground to order and all its hot beverages are Fairtrade, as well as meal deals such as coffee with a bacon roll for breakfast for just £2.

Adrian O’Hare, sales director of Fairtrade beverages distributor Peros, says that, while coffee remains the most popular hot drink out of home, it is important to have a strong offering that includes tea and hot chocolate.

“Hot beverages are probably the single most profitable line in a café,” he says “It’s not just sales of hot beverages but also of incremental purchases, because a growing proportion of consumers buy cakes or pastries with their drink.

“The ‘third wave’ of coffee has also raised expectations; the market has become ‘premiumised’ with customers expecting to drink high quality coffee, anytime and anywhere, and this is an opportunity for operators to meet those expectations. Good barista skills will be a key differentiator in ensuring outlets stay ahead of the game.”

Another important trend is the steady increase in sales of ethical beverages, particularly Fairtrade, he says, while branding is also important in maximising sales, particularly when it talks about growers and origin, as well as expertise in serving coffee.

Origin has been highlighted by UCC Coffee UK & Ireland in its premium Threesixtyº range, which displays the co-ordinates of the beans’ origin on its packaging so that consumers can find them via Google. The range includes two blends and a single origin variant. The beans are sourced seasonally and artisanally slow-roasted to produce a distinctive taste for each variant.

Managing director Elaine Higginson says that trends include the premiumisation of coffee, preference of quality over convenience and price, and provenance. In the company’s research, eight out of 10 consumers said the quality and taste of coffee was the most important decision driver for purchases out of home, with price coming second – certification did not feature in the top three.

“This isn’t to say operators should remove certified coffee from their menus, but they should look at how they are marketed so consumers fully understand the coffee journey,” she comments.

Martin Sheridan, managing director at Ferns Coffee, says that Brits’ love of coffee has created a generation of ‘connoisseurs’, resulting in a rise in demand for specialist coffee blends. “A basic coffee is no longer enough to satisfy customers, and coffee needs change during the day,” he explains. “A consumer may opt for a latte in the morning but by afternoon be hitting the espresso.
“We are finding that operators are opting for signature coffee, which allows them to offer a point-of-difference. They then can tailor offers to suit their customer-base; for example, operators that experience high footfall in the mornings might look to stock one of our spicy Sassetta blends; perfect for a boost first thing.”

Kate Jones, who runs Cherizena Coffee, says quite a few coffee drinkers prefer decaffeinated coffee, however, some operators don’t have it on their menus and could be losing out because of it.
“There’s often a misconception that decaffeinated coffee is weaker than regular coffee, but it shouldn’t be the case,” she says. “Decaf has the caffeine removed but the depth of flavour should be the same as the regular bean.”

Jones also recommends a ‘guest coffee’ once a month: “We find that blueberry, Caribbean calypso and café crème flavoured coffee go down well in the summer as a guest coffee or for frappés, while menus can be boosted by a sticky gingerbread flavoured or spiced Jamaican rum flavoured coffee in the winter. Young coffee drinkers tend to like trying new flavours,” she adds.

Tea is another booming category, thanks to tea drinkers’ desire for quality and choice. Lali Smith, buyer at Acquire Services, claims the market value for tea was £647m in 2013 with the infusion sector worth around £50m, with English breakfast tea the most popular, followed by Earl Grey, peppermint and green tea.

“While English breakfast tea makes up the bulk of the market (70%), this figure is declining, making way for an increase in the popularity of fine tea, green tea and infusions,” she says. “Fruit and herbal bags increased 10% to £54m, while speciality bags (£52m) and decaffeinated bags (£36m) grew by 8% and 16% respectively. Green tea saw the biggest growth in the sector, with an 83% between 2011-13 meaning the market almost doubled in value from £12m to £22m.

“Chai lattes are popular with the 5% of people who visit coffee shops but don’t drink coffee, and so is hot chocolate. Think about the way in which these items are being served: including cinnamon sprinkles, cream, or a chunk of dark chocolate on the side can add value and keep customers loyal.
“It is important to offer a high quality, diversified range. Cheaper tea always comes at a cost to quality and customer satisfaction.”

Allan Pirret, sales director of Novus Tea, says that, surprisingly, more than 165 million cups of tea are consumed daily in the UK, more than twice the number of cups of coffee. “This statistic seems even more unexpected when one considers the huge growth in out of home coffee availability over the last few years,” he comments.

He says this points to a huge, untapped market for out of home tea, but only by serving a tea experience on a par with the best artisan coffee. “Premium tea has an increasingly cool image. Young people aged 25-34 are the biggest users of whole leaf tea, and this group is driving the dynamic of the fast growing premium tea sector.

“Premium tea sales are set to double over the next 10 years, according to analyst Mintel, and sales of healthier green and herbal tea have already doubled in the past two years. English breakfast is the top selling black tea and Earl Grey is the leading flavoured tea, however, green tea and Egyptian mint often outsell Earl Grey and come close to English breakfast volumes, while other flavours such as Persian pomegranate, chai and citrus chamomile make up a significant percentage of sales.
“Apart from getting the range right, it’s important to convey this sense of value through the presentation and serve, as well as the selling ability of staff.”

John Sutcliffe, out of home and convenience controller at Taylors of Harrogate, says tea accounts for seven out of 10 hot drinks served out of home and, unlike coffee, the popularity of tea and the sheer range of blends available enable it to support all-day dining menus. “The key to making tea profitable is to make sure customers know it is on the menu,” he comments.

This includes blackboards, windows and other POS as well as classy display cabinets that stand out on counters, he explains.

Health concerns have also boosted fruit and herbal infusions by 15.7% and green tea by 19.7%. Taylors’ bestselling green tea includes Earl Grey green tea, green tea with jasmine and green tea with lemon.

Last year saw the first Teapigs tea schools offering free training sessions, which it says will continue throughout the UK this year. Teapigs co-founder Louise Allen sees this as crucial to the growth of the tea market. “The coffee industry is really good at training baristas, but there’s a limited amount of knowledge around tea,” she explains. “If people see whole leaf tea of good quality, they’re prepared to pay for it.”

Natural chai latte and iced tea are seen as key areas where awareness is developing and training needs to match up, she adds. Another must-have is organic matcha made from natural green tea leaves from Japan, which is traditionally drunk hot but, because it’s a powder, it can be drunk cold as a shot, whisked for matcha latte, or added to juices and smoothies for feel-good drinks.
Tetley marketing director Dorothy Sieber says that its Tetley Tea Academy recommends serving between seven to eight tea varieties, including the must-have black tea, plus decaf options for health-conscious consumers.

Sieber says that caffeine-free Tetley redbush is likely to appeal to customers whether they are health-focused or otherwise, and pairs well with sweet goods, while its green tea complements tangy, flavoursome food such as a Mediterranean tuna wrap.

“A key driver of demand for dining out of home generally has been consumers’ increasingly busy lifestyles,” says Sieber. “Tetley is responding with its On The Go complete beverage solution. Perfect for customers taking a hot beverage with them on their way to work or leisure activities, it raises standards with its double-walled cups, sip lids to prevent spillages and drawstring teabags to eliminate drips.”

Unilever Food Solutions (UFS) recently relaunched its on-the-go range of Rainforest Alliance-certified tea, PG2GO, and has produced some new, fun POS merchandising support fronted by the PG Tips tea monkey. Cups have also been revamped and are now double-walled for better insulation.

Switching to a reliable branded tea is an effective step in making out of home tea more attractive to consumers, says UFS category mix manager Rebecca Smith. “A cup of tea is a personal thing; some people like it weak, some prefer ‘builder’s tea’ while others prefer it without milk. It’s very subjective and no one solution would fit all,” she explains.

“We know from our research that operators can make use of some simple ideas to make tea more attractive. For example, let customers finish off their own tea by adding their milk and allowing them to brew it for as long as they want.”

Novel approaches to tea offers includes Zacely’s Teaforia tea concentrates that eliminate the need to brew, taking just 30 seconds to create a range of iced and hot tea, which provides a quick and consistent serve. Its Simplicitea variants include: Alishan High Mountain oolong, Assam black tea with strawberry, jasmine green tea with passion fruit, and oolong tea with peach, which can be served as iced tea, traditional hot tea or lattes.

“Tea has been left to the traditional yet mundane brewing method of steeping a bag in hot water,” comments Zacely co-founder Diana Novoa. “With the Teaforia range we are aiming to change this and hope to drive growth by boosting tea sales in foodservice outlets.”

Meanwhile, Bistrotea’s TeaPod is a single-use, high-tech tea diffuser with a filtration system that produces richly flavoured tea and, unlike tea bags, requires no squeezing to extract flavour. Once used, it can be returned to its moisture-proof envelope for recyclable disposal. Each TeaPod is packed at point of origin using premium grade, organic tea leaves processed in Sri Lanka on Fairtrade estates, and there are 12 blends in the range.

Café du Monde, which distributes Newby Teas, has also enhanced its range with Moroccan Nights, which can be served as a traditional cuppa or the Moroccan way with sugar; Black Tea and Thyme, a malty black tea; and Winter Dream, which combines the finest black tea with a ginger and sweet lemony flavour. Café du Monde managing director David Latchem says the varieties are very different and “well worth trying”.

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