The speciality coffee market is set to double in value by 2020 as established coffee brands, pubs and restaurants try to compete with artisan operators.
A new report published today by Allegra World Coffee Portal reveals that speciality coffee accounts for an estimated 15% of the total volume of the out-of-home coffee market. It forecasts 13% year-on-year growth, outperforming wider coffee market growth of 10% per annum.
The Future of Coffee report predicts speciality coffee chains such as Department of Coffee and Social Affairs, Taylor St Baristas, and Notes will grow and focus on vertical integration.
It says branded chains such as Starbucks, Costa and Caffè Nero will adopt speciality credentials, further increasing competitive pressure and contributing to a blurring of lines between branded chains and speciality venues. Meanwhile, non-traditional operators such as retailers, pubs and restaurants will integrate speciality coffee into their businesses.
It also predicts a culture of training will become entrenched leading to a more professionalised industry.
In the report Allegra gives an overview of the size of the market saying approximately 180 speciality coffee roasters now operate in the UK. 61% of roasters interviewed for the study have been roasting for 2 years or less.
The total green coffee market (excluding coffee destined for the retail grocery market) is estimated at 46,690 tonnes per annum. This is forecast to reach 75,200 tonnes by 2020 with a YoY growth rate of 10%. Allegra estimates the speciality green coffee market at 7,020 tonnes and forecast to reach 12,940 tonnes by 2020 with a growth rate of 13% p.a.
The speciality green coffee market has an estimated value of £40m per annum and Allegra forecasts it to reach £80.4m by 2020 representing 15% growth p.a. Growth will be driven by demand from an increasing number of artisan microroasters and commercial roasters broadening their offer to include speciality.
The UK speciality roasted coffee market is estimated at 5,830 tonnes per annum (based on an average mass reduction of 17% during the roasting process) and Allegra expects it to reach 10,740 tonnes by 2020. The market has an estimated annual value of £80.1 million and with value growth of 16% p.a it is forecast to reach £168.3m in value by 2020. This growth is being driven by strong consumer demand for quality-focused coffee, together with the proliferation of speciality coffee in a variety of non-traditional channels.
Allegra estimates there are 1,400 independent speciality coffee venues in the UK, rising to 2,500 by 2020, a YoY growth rate of 12%. Nearly half of venues interviewed for the study indicated that they have been operating for 2 years or less. 65% of speciality coffee venue owners plan to open new stores in the next 3 years.
Jeffrey Young, managing director, Allegra Group, said: “The last 3-5 years have seen a significant transformation of the UK coffee market with the explosion of speciality coffee venues nationwide and a particular focus on London and the South East. We have witnessed a growing presence of quality artisan roasters producing volumes of high grade speciality coffee.”
