Infographic credit: World Coffee Portal

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Tea turning heads amid rising coffee prices
 

With tea frequently made in UK homes and workplaces and subject to highly personalised preparation, the category is tricky to execute in coffee shops and has long been mired in poor value perceptions on the high street. However, with rising prices challenging coffee’s status as an affordable luxury, a growing number of coffee shop consumers are opting for tea out-of-home due to its lower price point.
 

World Coffee Portal’s Cakes, Shakes & Tea Breaks 2024 report shows 54% of UK coffee shop surveyed consumers now purchase tea out-of-home at least once a week, up from 48% in 2023.

Black tea remains the favourite tea type among UK coffee shop consumers, with 71% surveyed making a purchase over the last 12 months. Herbal, iced and fruit tea sales also increased last year, indicating that a broad tea menu remains an increasingly opportune sales channel for coffee shops facing less frequent coffee purchases.

Highlighting an opportunity for operators to innovate their tea range, 45% of consumers surveyed indicated they like to try new teas in coffee shops, up 9% year-on-year.

Indicating that affordability is a prime concern for UK coffee shop consumers, value-focused Greggs saw hot tea sales rise 5% over the last 12 months, with Starbucks and Caffè Nero also seeing an uptick in sales.

Specialist tea beverages are also becoming increasingly popular, with bubble tea gaining significant ground in the UK. This has prompted major UK operators, including Costa Coffee and boutique café group EL&N to introduce the category.
 

However, bubble tea’s typically higher price point means fewer consumers surveyed purchased the beverage from a coffee shop over the last 12 months. Additionally, coffee shops seeking to introduce bubble tea face increased competition from fast-growing specialist bubble tea chains, such as Chatime and Gong cha.

Nearly half of UK consumers surveyed now buy an iced beverage out-of-home at least once a week | Photo credit: Tamara Bellis

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Younger consumers opting for iced – but seasonality remains a sticking point
 

Iced beverages are a key fixture at UK coffee shops, with all major operators launching new iced products over the last 12 months. Additionally, brands such as Black Sheep Coffee and Blank Street Coffee now place iced beverages centre-stage in their marketing campaigns from early spring to late autumn and continue to promote the category into the winter months, albeit less frequently.
 

Nearly half of UK consumers surveyed now buy an iced beverage out-of-home at least once a week. As consumers ring-fence spending on smaller indulgent coffee shop purchases, average spend on iced beverages increased from £3.88 to £3.99 over the last 12 months.

Further highlighting the strong sales potential of iced beverages in coffee shops, 38% of UK consumers surveyed indicated that the category represents good value-for-money – a 14% rise on 2023.

Emphasising the importance of younger consumers for the category’s success, the proportion of consumers aged 35 and under purchasing an iced beverage at least once a week has risen to 66%.

New iced beverage ranges continue to entice coffee shop consumers, with 80% surveyed of those aged 35 and under compelled to try new iced beverages. Seeking to tap into this trend, Starbucks launched Iced Strawberry Matcha Tea Latte and Crème Brulée Cold Brew in the UK in March and May 2024 respectively. UK branded coffee shop market leader Costa Coffee unveiled new Raspberry Mini-Bubble Frappé and Blueberry Burst Bubble Tea products two months later.

Greggs has also scaled its iced beverage offer from a handful of stores to more than 200 outlets over the last 12 months, marking the emergence of a major value-focused iced category competitor.

However, the UK is yet to fully emulate the appeal of iced beverages in markets such as the US and South Korea, where consumption is strong year-round. Nearly 60% of UK consumers surveyed only buy iced beverages when the weather is hot, meaning operators must be nimble when it comes to marketing and restocking to maximise sales opportunities and reduce waste.

Cakes were the favoured food item purchase at UK coffee shops for 68% of consumers surveyed | Photo credit: Anastasiya Badun

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UK consumers prioritising indulgence over healthy food

With a growing number of UK consumers forgoing regular out-of-home food purchases during the cost-of-living crisis, less frequent indulgent and treat purchases have gained favour over previously on-trend healthy ranges.
 

Daily coffee shop food orders have declined over the last 12 months as consumers tighten their belts. Instead, many are making more occasional food purchases, with once-a-week and once-a-month purchases increasing in frequency compared to 2023.

Highlighting the growing appeal of indulgent food items, cakes were the favoured food item purchase at UK coffee shops for 68% of consumers surveyed, with croissants, cookies and muffins also growing in popularity year-on-year.

With discretionary spending limited, healthy food items have declined in popularity year-on-year from 60% to 51%. Additionally, fewer consumers now consider the nutritional information on menus and packaging important, falling 12% to 54%.

Highlighting a reduced focus on the health and wellness food trend, Pret A Manger converted the last three of its standalone Veggie Pret stores into standard outlets in April 2024.

In contrast, value-focused Greggs has broadened its food range to include savoury comfort items, such as pizza, chicken goujons and potato wedges, in a bid to increase evening footfall across its 2,520-plus sites. Underlining the bakery-cafè chain’s increased popularity, 17% of food-purchasing coffee shop consumers surveyed believe Greggs offers the best food, up from 12% last year.

Additionally, specialist dessert cafés, such as Kaspas, Heavenly Desserts and Creams, are vying for branded coffee shop trade with a focus on indulgence and younger consumers – each successfully scaling their UK presence over the last 12 months. 

 

Cakes, Shakes & Tea Breaks UK 2024 tracks the changing trends of UK consumers in out-of-home settings, ranging from consumption patterns through to flavour preferences and future purchase intentions. This unique report builds beyond its predecessors, the Project Iced UK, Project Tea UK and Project Food UK report series and is dedicated solely to consumer research, featuring over 6,000 UK respondents.

To purchase the report or to make an enquiry, please contact: enquiries@worldcoffeeportal.com +44(0)20 7691 8800