Coffee trends 2017
Between 6-9 April 2017 over 30,000 coffee lovers descended on East London's Brick Lane to attend The London Coffee Festival - an annual celebration of all things coffee. The official launch event for UK Coffee Week, the festival attracts those from the industry as well as coffee lovers, featuring over 250 artisan coffee and gourmet food stalls, tastings and demonstrations from world-class baristas, interactive workshops, street food, coffee-based cocktails, live music, DJs and art exhibitions.
So what's the next big thing in the world of coffee? Vice President of Research & Insights at Allegra Strategies, Anya Marco, took to the stage to present her findings from Allegra's Project Café 2017.
What are consumers looking for this year?
With over two thirds of the UK's population visiting coffee shops on a weekly basis, the UK branded coffee shop market is currently worth £3.7 billion in revenue, and with a growth of 11% each year, by 2021, it's expected to be worth £6.3 billion. Even in the last 12 months, 39% of consumers say that their visits to coffee shops have become more frequent, and those that visit less frequently have a higher spend per head. But surprisingly, coffee quality does not play the most important part in initially choosing a coffee shop - it's actually convenience of location. But when asked why they repeatedly visited, 39% cited great tasting coffee, along with loyalty schemes and value for money. While value for money is key, our perception of what constitutes value has changed - the average spend on drinks is now £2.40, with a ceiling of £3.
The UK consumer is also becoming much more savvy when it comes to coffee quality - but what does quality actually mean?:
- Flavour, texture and aroma - flavour profiles have been traditionally focused on a dark roast. The market is now moving towards a lighter roast, which is much more complex with fruity and floral notes
- Temperature - consumers are now starting to recognise that coffee doesn't have to be served extra hot - boiling water should never be used as it will effectively 'burn' the coffee
- Skill and presentation - the barista is key to producing great-tasting coffee and latte art is now seen as a key quality indicator
This year, we'll be seeing a raft of new products on the market, as well as those which have been the preserve of the independent making their way into the mainstream:
- Turmeric lattes/frappés/cortados - turmeric has long been associated with a myriad of health benefits, and now the coffee shop scence wants in. Often added to almond or coconut milk with ginger and honey (it needs the sweetener to avoid the 'curry' flavour profile), tumeric has been quitely springing up in independents, but it's set to become much bigger this year. It's not just turmeric either - other ingredients (in a variety of shades) are being used, such as beetroot and spriulina.
- Coffee cocktails and mocktails - a mainstay in bars over the last 30 years, the Espresso Martini is making an appearance on many coffee shop menus as they transition into the evening, but this year it's the turn of the coffee mocktail to take centre stage.
- Nitro cold brew - the next generation cold brew. Poured from a pressurised tap, compared to regular cold brew it's smoother, sweeter and creamier (even when served black).
- Functional/healthy drinks - everything from dairy alternatives to smoothies and fresh juices. 60% of consumers say they have a healthy diet, but find that coffee shops don't offer them an opportunity to keep to this - brands need to work out how to deliver 'healthy indulgence'.
- Premium teas - while coffee culture has exploded in the last ten years, the quality of tea in coffee shops has remained somewhat stagnant. Yet all that is about to change with the rise of speciliaty loose leaf teas and a move to make these quicker and easier to prepare.
On the subject of innovaiton at The London Coffee Festival, we caught up with Burr & Co.'s Edinburgh branch manager, Natalie Hunter: "I was impressed at the sheer scale and atmosphere of the festival. It was inspiring to see so many coffee enthusiasts coming together to showcase and celebrate coffee in all its versatility; from cold brew nitro to turmeric lattes, I really got to experience a huge variety of current and upcoming coffee trends. My biggest surprise and something I have decided to bring back to Burr & Co. was oat milk. We currently use almond and coconut milk, but I was amazed at how similar oat milk tasted to dairy milk, and how brilliantly it steams. We hope to be offering this very soon!"
Coffee shops as restaurants
A concept that's been lead by independents such as Grind and Caravan - coffee shop by day, restaurant by night - is now being taken on by the bigger brands. The challenge for the latter however is space - most of the footprint of each store is given over to the customer, so a back of house area to prepare food is minimal. In the case of Starbucks, this has meant only rolling out the concept in specific stores who can accommodate the extra space that food preparation requires. Other brands have focused on freshness and quality of their existing offering, rather than graduating to a full restaurant menu. With a shift towards table service and alcohol in the evenings at independents, it's a question as to whether the consumer who visits a national brand is ready for such a radical change - not least with research showing that millennials are drinking less alcohol.
Speed, convenience and the consumer experience is what's driving the latest technological advances in the coffee world:
- Smart stores and equipment - Starbucks has already begun testing a number of different smart items and this trend is only set to get bigger to cope with the demands of our fast-paced lives. Featuring no tills (and therefore, no queues), the Starbucks app facilitates ordering from your seat, plus there are wireless chargers and super-fast Wi-Fi. Menus appear on large screens (which can be changed throughout the day) and a 'micro kitchen' prepares different food items depending on the time of day.
- Virtual and augmented reality - if the popularity of Pokémon Go (even if short-lived) has taught us anything, it's that we love enhancing our everyday experiences. Many coffee shops were attracting Pokémon and offering discounts to players, and it's only a matter of time before we see this concept rolled out more widely (more augmented reality apps are in development, and coffee shops may choose to offer this experience on their own apps).
- Proximity-aware tech - this tech is all about recognising the presence of customers and letting them know they're important, as well as being able to target them to their individual needs - Apple iBeacon and Google Nearby will no doubt be the leaders in this field.
- At home/at work coffee delivery - from coffee subscription services allowing you to brew at home or delivery direct from stores to our offices, this type of service is only set to get bigger.
Transparency and sustainability
A hot topic across the whole of the hospitality industry, consumers now expect brands to be transparent about their sustainability and sourcing policies - from ethical sourcing of beans to recycling packaging and disposal of food waste. More than anything else, it's about doing 'The Right Thing' in regards to business honesty and integrity.
The new consumer generation
While all the talk is about millennials, this attitude is more of an approach to life, rather than just about age. From FOMO (the fear of missing out), almost total reliance on smartphones, the influence of bloggers and of social media in general, for this generation collecting experiences (and sharing them) is everything.
The fifth wave
The next coffee development wave has arrived - but what does it mean? Here's a quick recap of where we've come from:
- First wave: traditional coffee culture (20th-century) - commodity drivers, mass consumption, dominance bulk brew filter coffee, the introduction of instant coffee.
- Second wave: branded chains (mid-1990s) - rise of the branded chain concept, proliferation of coffee shop culture, customised espresso-based drinks, globalisation.
- Third wave: artisan coffee (mid-2000s) - focus on speciality and bringing out the unique flavours of the bean, sustainable methods of roasting and brewing, relationships with farmers, traceability.
- Fourth wave: science of coffee (mid-2010s) - using scientific principles to perfect the entire coffee-making process from bean to cup, greater attention to processing at origin, a better understanding of the properties of coffee and the effects of water chemistry.
However, the market has come to a point where we're experiencing artisan fatigure. There is an over-reliance on 'wordy' marketing, as well bigger brands reducing the value of the word artisan, for example Tesco's 'farm brands'.
The fifth wave is the next development step - an exciting new enduring era for the global coffee industry. A compelling combination of all four previous waves, it's all about high quality boutique businesses with sustainable, yet profitable brands, as well as a more advanced (read: scientific) set of business practices. Leading the way are London-based brands Caravan, Grind and The Department of Coffee and Social Affairs - we'll certainly be keeping an eye on how this new wave takes shape.