According to the latest report from Allegra World Coffee Portal: Project Café 2016, the UK coffee shop market continues to expand rapidly. Total turnover in 2015 was £7.9bn, an increase of 10 per cent on 2014.
Allegra predicts the total coffee shop market will comfortably exceed 30,000 outlets and hit £15bn turnover by 2025, driven by branded coffee chain expansion and non-specialist operator growth.
The greater commitment to coffee from the non-specialist sector, such as pubs, fast food outlets, supermarkets and retail stores, has also generated wider consumer interest. The result is that this sector has experienced outlet growth of 10.5 per cent, reaching 7,976 establishments, says the research.
Consumers are not only demanding better quality and consistency but are going out more often to experience it. Daily visits have increased with 16 per cent of visitors frequenting a coffee shop at least once a day in 2015 compared with 14 per cent in 2014.
This view is backed up by research from The Caffè Culture Show, which reveals similar trends in that nearly half (48 per cent) of consumers visit coffee shops several times a week, and one in eight (12.4 per cent) visit every day.
Its statistics also reveal that the quality of coffee served was the biggest motivating factor for consumers in choosing which coffee shop to visit (81.3 per cent) and 82.5 per cent refuse to return if quality is poor.
Capitalise on coffee
It would seem that consumers want to be able to have that premium coffee anywhere at anytime. This provides an opportunity for hospitality operators to capitalise on this growing market.
“Coffee is absolutely thriving and it is happening all over the world. There is a global trend towards better quality coffee,” says Jeffrey Young, CEO of the Allegra World Coffee Portal.
Pubs have embraced the coffee market much more openly that the restaurant sector, Young argues. This is due in part to the high number of pub closures, which forced venues to look at other revenue streams to build trade. Many used coffee to boost sales at quieter times during the day and in the evenings innovating with coffee cocktails such as the espresso martini.
“Coffee has a higher margin than alcohol and if you serve it well and get an audience then your profit margins will rise,” he argues.
However, restaurants in particular, have been failing to capitalise on the growing trend and some have neglected their coffee offer.
“Restaurants are the ones that haven’t switched on fully to the opportunity of coffee,” he says.
“They will spend a lot of time on menus and forget the coffee or go for a default solution.”
Young believes one of the major issues for restaurants is the lack of training in coffee serve.
“In many cases the coffee is left to the waiter to make. They are generally customer service orientated and focused on giving the customer that attention. They are not necessarily trained baristas,” he says.
The ideal for any venue would be to employ a specialist barista to ensure all coffee is consistent and meets those consumer demands. But is that really an affordable for many operators and what are the options available?
Coffee 'akin to wine'
Ian McDonald, commercial manager for Nespresso UK, says that the coffee market is seeing a boom that is akin to the wine market.
“People liken it to the development of wine 25-years ago when there was simply red or white. People now know everything about wine and pay to go on courses, “ he argues.
“There is a story about how coffee is produced from the coffee tree to beans to roasting them, drying them to blending them. It is an interesting story with parallels to wine.”
He agrees that not all restaurants are capitalising on the coffee opportunity and points to the need for staff to be fully trained in the product to be able to up-sell at the end of a meal.
“The number of people taking a coffee after a meal in a restaurant is quite low and therefore there is a good opportunity for restaurateurs to improve that,” he says.
In addition, he highlights the issue of staff turnover as a major task for operators. Serving a good quality coffee is a technical skill that takes training and it is hard to ensure the consistency of product with changing staff members.
“With the best will in the world, the industry has high staff turnover and trying to train top of the range baristas on a traditional coffee machine is quite challenging,” he says.
One of the ways around this is to use a machine that does it for you. The advantage is that it is simple to use and means no wastage.
“One of the benefits of portioned coffee is the consistency. This is a real key criteria for premium restaurants and hotels and it is useful when you have to consider staff training,” McDonald argues.
The latest Nespresso Aguila 220 machine offers four one-touch recipes and 12 customisable pre-programmed hot milk-based recipes, including the classic latte and flat white. Venues get a choice of 11 Grand Cru coffees including three of single origin and a number of blends as well as decaffeinated.
“You don’t have to worry about ‘do I need to grind some beans and get it ready and no-one comes in?’” says McDonald.
He advises operators to look at how much more they can do with coffee as a business driver. While training and knowledge is essential staff should be able to confidently up-sell to the customer.
“Instead of approaching a table as the plates are being cleared and saying ‘would you like a coffee madam?” and they reply ‘just the bill please’, perhaps they could have a better way of approaching with a story?” he advises.
Boutique hotel GreyFriars in Colchester chose Nespresso as its coffee supplier for the restaurant, tea parlour, bar and 26 bedrooms. As well as traditional coffees, Nespresso is used at the hotel bar as the base for its signature espresso martini.
The hotel serves a European-with-a-British-twist menu and offers a range of coffees to complement each meal, assisted by a top barista.
Nadir Suleman, operations director at GreyFriars, selected the Nespresso Aguila 220 machine, as it is able to respond to busy service periods, producing between 2,000 and 4,000 cups of coffee each month.
“It guarantees the finest quality coffee is served every time, delivering a premium taste with the touch of a button, ” he says.
The Coaching Inn Group, the 10-strong pub and hotel chain, has taken a different approach investing £100,000 in developing a quality coffee offer across its estate. It launched a new-look coffee house and eatery concept working with supplier Bewley’s.
Managing director Kevin Charity says the coffee offer, is an extremely important way to 'sweat out' the square footage of the property. This means that areas within the site are fully utilised enabling each venue to drive sales at traditionally quiet times.
Get it right
Each site offers a coffee counter and alongside that is able to sell additional items such as cakes and patisseries. The early results show a 50 per cent increase in both coffee and patisserie sales.
Charity says the priority was searching for a supplier that could deliver the quality of the coffee and the training support.
“It is like anything if you haven’t got the product right you will fail,” says Charity.
He admits that getting the coffee right was 'hard work' and admires chains such as Costa and Starbucks because they 'just get it right all the time'.
Operationally keeping the quality and consistency at a high level across all the sites is a challenge, which needs to be monitored.
“The company that supplies our coffee and training also audits. They do about four audits per site per year so we are constantly getting results to see how we are doing, ” Charity says.
Getting staff fully trained on how to deliver a consistently good quality coffee involves a level of technical expertise, which also includes how to clean the machine, set the machine up and make sure the coffee is ground correctly.
“It is far more skilled than you imagine. We are constantly training on site and there is some intensive off-site training to get skills up to scratch,” Charity says.
Training is the focus for new operation The Black Penny, in London’s Covent Garden. The house serves between 200 to 300 coffees a day and has just started to roast its own coffee on site. Staff training is conducted once a week to ensure the consistency of the coffee served. Also both the coffee supplier and milk supplier conduct training with the staff.
Co-owner Zoe Newitt admits: “It is expensive but it is a passion.”
She says that while the site does not lose many staff the industry overall does have a high turnover which is a challenge.
“This is just part and parcel of the industry and you need to put the time into people to have good quality for a short amount of time,” she says.
Drake & Morgan, the pub restaurant chain, recently signed a deal with Caffeine Limited and auditing is also a part of that deal.
Justin Stockwell, managing director Caffeine Limited, admits that it is essential for operators to be able to serve coffee from a fine tasting espresso, cappuccino, latte and flavoured milk drinks, especially as not all operators can afford to train and employ full-time baristas.
“The best modern bean-to-cup machines can do the job of a trained barista at the touch of a button,” he says.
“Caffeine regularly audits each Drake & Morgan site, checking that the coffee service is up to scratch.”
For operators wanting to ensure the consistency of coffee there is no doubt it is a massive challenge. Investing in staff training on whatever system is chosen and monitoring the quality of the product is essential.
For time-pressured operators worried about staff turnover and training a quality capsule system could be the answer. But there is no denying that the market is growing and operators need to ensure they are able to capitalise on this.