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    What’s brewing in hot beverage aisle: bestsellers, must-stocks, tips

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    In a cold country like ours, hot beverages are more of a lifeline than just a kitchen staple. Even when the sun shows some love and kindness, Brits prefer having its chiller cousins handy. In that way, tea, coffee and their newer and similar line of products is almost a lifeline – both to the public as well as for the grocery stores.

    The established category of packed hot beverages to be consumed at home along with food-to-go element of beverages promises to be an important source of sales and revenue to the convenience channel. According to industry reports, about £268 million worth of hot beverage sales go through convenience stores every year and it continues to grow, albeit slowly, at 0.4 per cent year on year.

    While standard black tea continues to be the top value segment in the UK tea market, younger consumers are turning away from the traditional brew. Recent reports suggest that coffee has overtaken to emerge as the UK’s favourite drink, implying Britons drink coffee more regularly than they do tea and spend more on it in grocery stores.

    According to the Statista Global Consumer Survey, spanning 2,400 respondents, some 63 per cent of consumers said they regularly drank coffee, with 59 per cent regularly having tea. According to the British Coffee Association, Britons drink about 98 million cups of coffee each day.

    Researchers at Kantar recently found that shoppers bought more than 533 million packs of coffee in the supermarkets over the year to March 2023, compared with 287 million packs of tea.

    Kantar confirmed the trend to Asian Trader when it stated that number of coffee-buying households has now exceeded the number of tea-drinking ones.

    “Our data confirms that when reflecting on solus coffee buyers vs solus tea buyers, around 850k households in the UK purchase coffee exclusively vs 521k households that are exclusive to tea. So, strictly focusing on these numbers, it is true that there are more coffee exclusive buyers than tea,” a Kantar spokesperson told Asian Trader, adding that around 4 million UK households purchase a combination of coffee and tea.

    The top five coffee andt ea brands listed by Kantar in terms of sales are Nescafe, Taylors, Kenco, Twinings & PG Tips, while the fastest growing are named as Taloyrs, L’Or, Typhoo, Pukka and Tetley.

    Tea-time

    Brits took to tea with such an enthusiasm that it continues to the present day.

    Everyday black with decaf remain the teas of choice for most households, with the top three tea brands accounting for over 61 per cent of total sales. Clearly, it is here that the majority of price promotions are expected to have maximum benefit.

    Top choices remain the product line from Tata Consumer- Tetley, Good Earth and teapigs. Tetley is a good value brand to offer as awareness and familiarity of the brand help attract shoppers’ interest to other areas at fixture like green and herbals. Tetley Original is a strong everyday black tea buy and keeping a mix of pack sizes catering to different shopper missions is sensible.

    Tetley and its sister brands Good Earth and teapigs are taking to the streets this year with its biggest sampling campaign to date, geared to reach multiple thousands of shoppers across the three brands.

    What’s brewing in hot beverage aisle: bestsellers, must-stocks, tips

    “It’s about reaching the right audiences with the right products and surprising them with something they may not have considered for some time. Reappraising tea and the variety available to meet all tastes and budgets will help reignite interest in the category,” Dan Adams, Senior Category Development Manager for Tata Consumer Products, said.

    Decaf remains a key opportunity so making sure decaf is prominently shown and the decaf selection is carefully curated on the basis of taste, will help sales and repeat purchase.

    The bold flavoured Good Earth teas are also performing well and are a great first step if you are considering stocking higher value items in this aisle. New flavour experiences like Good Earth Ginger Turmeric & Lemon, Good Earth Moroccan Mint and Good Earth Hibiscus Rose & Sweet Berries are creating quite a buzz among the younger shoppers.

    Although there is evidence that some shoppers are scaling back on tea spend, true tea aficionados are holding strong and in fact, some are also opting for the higher end of the category.

    Premium brand teapigs is particularly benefiting from this trend with Peppermint leaves, Everyday Brew and Chamomile Flowers topping its sales.

    October will see the availability of the Winter collection of limited-edition teas of Tata Consumer. October will also see the availability of the teapigs tea advent calendar, offering a different type of tea behind each door.

    In addition to value and assurance of taste there has been a major shift in consumer attitudes in tea linked to sustainability and ethical sourcing.

    Biodegradable products are making their way into British homes with increasing number of shoppers opting for plant-based tea bags.

    With multi million pounds of investment, Tetley has made a giant leap forward on its sustainable journey with the roll out of plant-based tea bags and the introduction of the most significant change to its pack format in 30 years.

    Rolling out convenience this autumn, Tetley has introduced a new carton pack to replace its soft pack packaging for its black tea range- Tetley Original, Extra Strong and Gold.

    With the transition, Tetley will hit a major milestone of 97 per cent of its packaging being reusable, recyclable or compostable in line with its commitment to the UK Plastics Pact to achieve 100 per cent by 2025, says Adams.

    Another name to vouch for in the tea section is Yorkshire Tea.

    What’s brewing in hot beverage aisle: bestsellers, must-stocks, tips

    Helen Boulter, Yorkshire Tea Multi-Sector Sales Controller At Yorkshire Tea, highly recommends stocking PMPs as they are a great way of communicating value.

    “Stores should prioritise stocking our best-selling lines within convenience – our 40s and 80s PMPs. If you have limited space on fixture, we suggest prioritising these lines,” Boulter tells Asian Trader.

    Interestingly, Boulter points out that decaf tea is worth £4.8 million and boasted +6.4 per cent growth YOY in convenience as shoppers are increasingly looking to reduce or replace their caffeine intake.

    “We often hear from tea drinkers that a big factor when considering decaf tea is taste, and whether it can match up to a caffeinated brew. We believe that that Yorkshire Tea Decaf does exactly this, and as the UK’s number one decaf tea.”

    Despite the cost-of-living crisis, shoppers continue to purchase premium brands, so stocking Yorkshire Gold 40s PMP is a great option to complement the rest of the Yorkshire Tea range.

    Coffee Break

    Well, as mentioned earlier, the UK is now moving from tea-loving to a coffee-gulping nation, so it is time to have a fresh look at the coffee section. Instant coffee still makes up 53 per cent of the market, with granules and freeze-dried the biggest sub-segment (64 per cent) within that. But the strongest growth is coming from higher-priced segments such as micro-ground (up 5 per cent) and roast and ground (6.3 per cent).

    Cafédirect product line is a safe bet here, considering its wide range as well as sustainability aspects.

    With sales topping £18.5m in retail over the last year, Cafédirect has been causing an even bigger stir this year with the launch of new recyclable packaging that will reassure consumers they really are making a difference when they choose Cafédirect.

    “Famous for working directly with farmer cooperatives around the world for more than 30 years with the aim of improving smallholder farmer livelihoods, Cafédirect is already popular with a wide group of shoppers who love that they’re getting great coffee that also has a purpose,” explains Lesley Parker, Brand Controller for Cafédirect at distributor RH Amar

    “And with the nation’s discerning coffee drinkers continuing to trade up to premium options at home, there has never been a better time to take this message further, as well as giving shoppers even more reasons to choose Cafédirect,” she says.

    Among them is a new look and feel for the Cafédirect family. An evolved logo now gives the brand an even more distinctive and characteristic presence on shelf, whilst a move to recyclable polyethylene across the brand’s Blends and Single Origins pouches – coupled with new 100 per cent premium recycled tin across its instant range – means that 99 per cent of its packaging became recyclable from April.

    With an aim of being instantly recognisable as the coffee brand that’s better for everyone, a high impact marketing campaign from this spring has been playing out across social and digital channels of Cafédirect.

    What’s brewing in hot beverage aisle: bestsellers, must-stocks, tips

    Furthermore, Cafédirect is introducing two new ranges to its lineup- Empower, Cafédirect’s smoothest coffee to date, medium roasted for a balanced flavour and natural sweetness, and Restore,a vibrant, well-rounded coffee roasted medium-dark to deliver a deliciously nutty taste.

    Thrive (RRP: £4.45), meanwhile, is a deliciously dark roasted coffee blended that delivers a rich, intense flavour, profits from which will be invested in future coffee production by fostering employment opportunities from farming and selling, to logistics and digital specialist roles.

    Decaf Machu Picchu, Machu Picchu, and Mayan Gold variants (RRP: £4.50) also from great line of products.

    With the coffee category growing in popularity, the demand for retailers to stock a diverse range across the category has never been more important.

    “With round 10.6 million households buying JDE coffee products, retailers should consider stocking household favourites such as Kenco, L’OR, Douwe Egberts and Tassimo which allows shoppers to purchase convenient, but still delicious, ways to enjoy their coffee shop favourites,” says Juliette McConnell, Demand Accelerator Controller at Jacobs Douwe Egberts (JDE).

    Another noteworthy trend here is that Brits are keen to recreate café culture at home with 65.1 per cent of consumers looking for coffee shop quality drinks to enjoy in the comfort of their own home.

    “Consumers are trading up on their weekly shop with products that allow them to easily recreate their favourite coffee shop experiences. This trend is being proven through the immense growth within the specialties and mixes segment,” McConnell from JDE tells Asian Trader.

    The notable key brands from JDE are Kenco Original Cappuccino and Latte Sachets, Tassimo Costa Range, Kenco’s Iced/Hot Salted Caramel and Vanilla Lattes, Kenco Milicano- Original, Intense and Decaf, L’OR freeze-dried instant coffee range.

    McConnell recommends retailers to offer shoppers a good range and availability and where possible, stock a diverse range of products from brands that consumers know and trust. In addition, stocking different coffee sub-categories is a great way to appeal to a wider range of shoppers and ensuring you have good availability, means they don’t have to shop around.

    JDE’s top products for c-stores are Kenco Smooth (100g), Kenco Rich (100g), L’OR Classique (100g), L’or Intense (100 g) and Douwe Egberts Pure Gold (95g), says McConnell.

    To expand its range, JDE has recently launched L’OR Decorative Jars. Available on shelf this month, premium coffee brand L’OR, is launching a range of new limited-edition jars across its leading six SKUs. Coming in three highly collectible designs, the illustrations are inspired by the beauty of coffee flowers and plants from around the world. The new jars have been created to drive collectability and encourage shoppers to refill and reuse, a behaviour which is set to grow 5 per cent annually by 2027.

    Apart from packaged coffee selection, it is always crucial to stock a wholesome line of iced coffee too, particularly that can be consumed on the go.

    Now worth £230m, the Ready-To-Drink (RTD) iced coffee category is growing rapidly, with symbols and independents sales having now grown to over £44m.

    Caramel (+36 per cent), Mocha (18.4 per cent), Espresso (+16 per cent) and Latte (+14 per cent), all of which feature in Boost’s offering, are the top four flavours in the space and account for 84 per cent of the category’s sales value.

    Boost is now the second largest selling and first fastest growing RTD Iced Coffee brand in unit sales, with its 250ml variety being the biggest selling format, witnessing +19 per cent value growth .

    In the words of Adrian Hipkiss, Marketing Director at Boost Drinks, iced beverages continue to be a popular option for consumers as an afternoon pick me up or a convenient beverage that travels well when on the go.

    What’s brewing in hot beverage aisle: bestsellers, must-stocks, tips

    “We know that the RTD Iced Coffee category is growing rapidly at +24 per cent volume and +31 per cent value YOY, providing a huge opportunity for retailers to draw customers in and maximise sales,” Hipkiss tells Asian Trader, adding that to successfully capitalise on this trend, retailers and wholesalers should provide enough space to allow for future growth in the category and stock fast-growing brands.

    While talking about on-the-go beverages, it is not easy to ignore the rapidly rising popularity of energy drinks. Boost again is a great choice here to stock considering that it is the only brand that caters the three functional drinks categories – Energy Stimulation, Sports Drinks and RTD Iced Coffee. Boost Drinks has expanded its popular Energy Stimulation range, with the reformulation of its Citrus Zing 250ml Energy drink, which has been relaunched as Lemon & Lime Energy.

    Other than contemporary tea and coffee, hot chocolate is also in huge demand, contributing £138m to the category. The rest of the category is split between malted drinks and cocoa worth £60m.

    Worth £19m, Galaxy Hot Chocolate is one of the leading brands in this category, with more than three million households purchasing the delicious drink. It has a strong customer base with loyalty of 10.2 per cent YOY outperforming the hot chocolate category.

    Michelle Frost, general manager at Mars Chocolate Drinks and Treats, calls Galaxy Hot Chocolate “a household staple rather than a luxury choice”.

    “While there is no doubt that hot chocolate has become an all-year-round purchase, the seasonal and gifting products including Galaxy and Maltesers Hot Chocolate Station and Galaxy Movie Night Pack all offer a creative experience for consumers to enjoy.

    “It’s great that we are able to offer a variety of formats including Celebrations Hot Chocolate Pods, allowing consumers to enjoy iconic brands in a matter of minutes,” he tells Asian Trader.

    Brew them more

    Beverages are comparatively easy to sell but a slight tweak here and a smart move there can do great wonders.

    McConnell emphasises on meticulous planning of shelves for maximum results.

    Allow good shelf space for your coffee display as maximising visibility can attract more customers to your range. Offer a breadth of brand choice to meet evolving shopper needs with two facings per SKU and use eye-catching signage and POS to create intrigue, suggests McConnell, as sales figures in impulse are rising in comparison to 2022, suggesting that more shoppers are making their decisions once in store.

    Placing tea close to complementary items like breakfast products or tea-time treats can help sales across categories.

    “With smaller stores in particular, our advice is not to overstretch the offering, focusing on a core range with the right mix of pack sizes in the most shopped sectors of original black and decaf will attract both regular top up shoppers, and those making small changes to how they shop as they work to manage household budgets,” Adams from Tata Consumer Products says.

    What’s brewing in hot beverage aisle: bestsellers, must-stocks, tips

    Dominic Plomer-Roberts, supplier relationship manager at multi-award winning independent convenience group Green’s Retail, vouches for the line of tea products by Tata.

    “Having the Royal Warranted Fisher and Donaldson bakers in store, means tea is a top complementary buy too, so variety is important to us. The 4th P of Greens core values is “Planet” which means the environmental credentials of our brand choices is important. Tetley’s move to plant-based tea bags and introduction of new carton packaging for original and decaf, which will be available to us in the Autumn, is an important development which fits well with our values and those of our customers.”

    Wholesaler Bestway points out that consumers will be looking for a trusted brand when it comes to hot and cold beverages like Nescafe Gold Blend, Nescafe

    Original Granules and Kenko Smooth/Rich. In tea, Tetley leads for independents and convenience stores since 2021.

    Cold Brew is now becoming popular with younger customers, with brands such as Starbucks, states Best

    Bestway, adding Costa Coffee too see good response with sales of +135 per cent from 2020-2021. According to Global Brands, stated that Costa Coffee has become a customer’s favourite for click and collect as well as delivery.

    Bestway recommends keeping a main section fully stocked with best-selling brands of hot beverages which should be merchandised next to sugar, biscuits, cakes, and morning goods to get maximum sales.

    What’s brewing in hot beverage aisle: bestsellers, must-stocks, tips

    Cold beverages should be cross merchandised with Food to Go products, including chilled sandwiches and cold meats.

    Use the right size pack sizes to fit with the shopper mission and to suit the channel’s typical basket spend. 80’s pack of tea and 100g jars of coffee are a great pack size to cater for the top mission. Use smaller, lower price points packs such as 40’s packs of tea and 50g jars of coffee to cater for the distress mission.

    Premiumisation and health continue to be key drivers in this category with customers switching to healthier, decaffeinated options. Bestway stock specialty tea including Twinings Pure Green Tea and Twinings Pure Peppermint Tea.

    Apart from stocking Tetley Original Tea Bags, Twining’s Pure Green Tea, Best-One Rich Roast Instant Coffee, Taylors of Harrogate Rich Italian Ground Roast Coffee, Ovaltine Original, Bestway also stocks the nondairy milk range like Alpro Barista Coconut Long Life Milk, Alpro Barista Almond and Alpro Barista Soya.

    Bestway also stocks Starbucks Frappuccino Caramel Flavoured Milk Iced Coffee, Starbucks Frappuccino Cookies and Cream Flavoured Milk Ice Coffee. Starbucks Doubleshot Espresso Iced Coffee and Nesquick Chocolate Flavoured Milkshake Powder.

    Bestway ensures that it is always on trend with its campaigns and special offers, with its digital promotions use of social media through its WhatsApp and latest brochures notifies its retailers of promotions, deals and value for money products and events.

    Wrapping it up

    Independents should keep a wide variety in this section to cater for different tastes and preferences.

    Sampling and tasting events, coupled with limited-period discounts,are a great idea to push new launches as they give consumers a chance to try products thus encouraging them to purchase.

    Alcohol moderation trends also presenta great potential area of growth for tea in the longer term. Green tea is also expected to see a continuous rise in demand with different flavours with dedicated health benefits will continue to pique customer interest.

    Coffee sales are rising so it is best to buck the trend by widening the range and keeping the bestsellers of each price-bracket.

    Overall, both tea and coffee are affected by the ongoing cost of living crisis. The cost of commodities such as coffee and cocoa jumped in May and was touted as one of the huge factors driving grocery inflation.

    Talking about coffee, it is reported that it is one of the items that is increasingly getting targeted by shoplifters lately, along with beef and cheese. In fact, in an effort to combat thievery, Co-op has resorted to dummy display of jars of Kenco coffee. Spar has gone the extra mile by putting empty jars of coffee such as Nescafe Gold Blend, L’Or Classic, Nescafe Gold Blend Alta Rica and Douwe Egberts Pure Gold. Sad reality!

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