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Coffee in the United Kingdom

United Kingdom coffee market: Nestlé the key player in the industry

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2014-02-13 10:29:04 - Coffee in the United Kingdom - a new market research report on

Nestlé UK continued to lead the United Kingdom coffee market during 2012 with a retail value share of 38% and retail volume share of 32%. This is the result of its strong presence in instant coffee, which continues to dominate the coffee drinking culture in the UK with a total volume share of 57%, despite growing competition from fresh coffee. Furthermore, the company is also strong in fresh ground coffee pods, a very dynamic category that has slowly started to flourish.

This can be attributed to the development of Nescafé Dolce Gusto, which has experienced a rapid increase in sales due to an active marketing campaign allied with a stronger presence in terms of distribution. At the more premium end, the



company´s famous Nespresso brand also put in a good performance with further growth in both volume and value sales in 2012.

Retail volume sales of coffee declined in 2012 for the first time since 2003, largely as a result of the recession. This is quite a shocking reversal of a long-term trend in coffee which has benefited so much from the rise of coffee culture within the UK over the last decade. Whilst this is considered to be an exceptional blip in demand, it is still salutary that consumers have been cutting back on expenditures in this area. This decline is connected to the significant increase in unit prices in 2012, which saw the highest level of growth in the whole review period, fuelled by the weakening pound and the massive rise in commodity prices.

Premiumisation is expected to continue to be seen in coffee as more consumers move away from basic instant coffee. This trend will further evolve over the forecast period as consumers become increasingly aware of the benefits of coffee, but more importantly its origins and different flavours.

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Mike King
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