Analyst Corner: 3 reasons Coffee is the ultimate Convenience category

We are amidst a great coffee boom. Coffee is a perfect test bed for innovation that exemplifies the wider trends brewing in convenience. While all channels want a slice of the coffee cake, here’s three reasons why coffee is the ultimate Convenience category

Growing penetration in convenience

Coffee is winning a spot in more baskets this year. Our annual Convenience Tracking Program (CTP) found compared to last year, coffee turned up in +74% more baskets, demonstrating an increased importance for this product in convenience. Coffee is one of the few categories that attracts a younger shopper, with an average age about 5 years younger than CTP average. Bringing coffee drinkers in means winning more share of “shoppers of the future” as younger consumers turn to delivery models and online ordering

Coffee’s importance in food to go

14% of all convenience trips are driven by food to go and retailers without a hot drink dispenser are missing out. 77% of c-store retailers offer hot drinks in their store (up from 73% in 2018). These retailers sell an average of 31 cups a day (+15% compared to last year). However, if you can’t beat them, join them; 4 in 10 retailers are planning on adding a hot drink feature in the next year. Greggs is a great success story in how to win through coffee. Investment in coffee machines to improve speed of service and range of drinks was a hit. Greggs cited hot drinks as a key growth area in their latest end of year results

Innovation

We are drowning in brilliant coffee innovation that’s hitting all the c-store trends. Dairy free, low plastic packaging, vegan and soft drink experimentation can all be seen in the coffee category. Let’s highlight a few.

Taylors Coffee bags made their first foray into convenience last month, alongside a £2m advertising budget, ensuring these coffee bags are generating buzz. Genius or madness? The ultra-convenience angle of this product makes it a match made in heaven for this channel.

The trend for all things vegan continues to dominate and has led Nescafé to launch 3 plant based instant latte mixes in oat, soy and coconut flavours. A world first, this new product is bang on trend, especially with younger consumers, 3 in 10 of whom are planning to follow a vegetarian or vegan diet in the future.

Last but not least, Coca Cola have thrown their hat into the ring in partnership with Costa, launching a Costa branded RTD coffee in a can. These cans tap into the trend for cold coffee and are 100% recyclable. Essential, as 30% of UK consumers think that Plastic use is the sustainability issue that needs to be solved first, twice as many as any other factor (HIM Omnichannel Tracker June 2019).

Coffee is the ideal category for suppliers to innovate with NPD. Coffee shoppers in convenience are +5% more likely to enjoy trying new things when it comes to grocery shopping. There is plenty of scope for more exciting products to be launched into the convenience channel including local roasting, emerging origins and seasonal flavours. Time for an iced vegan pumpkin spiced latte in a bag?