The 5th wave is coming...
81% of people now visit a coffee shop weekly, spending £9.6bn a year in over 24,000 outlets according to Allegra Project Cafe 2018 lastest research
The numbers are staggering; the growth is continuing but slowing, new entrants to the market are disrupting the market and gaining traction, consumers are getting more sophisticated, but with a squeezed income and disposable cups are on the front pages of the newspapers.
Despite a mixed year for the big chains, the excellent news for the smaller chains and independents is that it's the year of the disruptors who are bucking the trends and selling the experience, not just the coffee.
It's for precisely the reason that consumers are feeling the pinch that they are choosing to spend their money more wisely. For a quick cup of coffee, affordable and reasonable quality, people are using the likes of Gregs and Pret-a-manger. To justify spending more they want to experience something exceptional as well.
Hense the recent success and growth of Joe & The Juice and Blacksheep coffee. They are both market disruptors and both part of the 5th Wave.
Blacksheep offer something different to the market, using Robusta beans to roast their coffee in the face of every other speciality chain using Arabica. Visiting Joe & The Juice is a joyous occasion - you just need to have a look at their website for confirmation.
"Allegra defines The 5th Wave as delivering a boutique experience at scale, which follows the 4th Wave, the science of coffee, and the 3rd Wave, appreciation of speciality coffee."
The top reasons for visiting a coffee shop haven't changed much over the years with convenient location, coffee quality, habit and loyalty scheme being the top 4.
Interestingly the reason that people will not revisit is not the opposite of these. Poor tasting or bad coffee, poor cleanliness, poor service and high prices deter people from coming back for a second time.
This year it seems that apps are reaching critical mass, with 63% of people saying they use a coffee shop app, with 13% of people more likely to buy food on the app rather than in a store.
38% of people agree that there should be a takeaway cup levy to combat the environment, just like the charge on plastic bags. We will see where that goes this year in the UK.
The growth of the coffee pod machine marches on with 36% of people saying they used a pod machine at home. This has doubled in 5 years. The availability of good coffee in your home is another factor why people are looking for a unique experience and not just the coffee when they visit a coffee shop. It is also educating those consumers on the different flavours and characters of different types of coffee.
Overall the coffee shop market is showing no signs of deterioration, the appetite of the consumer is moving away from the mainstream to the boutique. Which is a significant opportunity the independent coffee shop or cafe operator needs to embrace.
Andrew & Claire
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