Retail volume sales of hot drinks in the UK continue to decline in 2024, due to increasing price pressures, although the latter ensures further value growth. Unit prices are rising across all categories, influenced by higher raw material costs and climate-related disruptions, impacting supply availability.
Some of the main trends shaping hot drinks in 2024 include premiumisation, the pursuit of value, a focus on health and wellbeing, and the search for convenience. As many local consumers continue to spend time at home post-pandemic, moments of indulgence have gained importance, encouraging their investment in more premium coffee options.
In 2024, Nestlé UK Ltd remains the leading player in hot drinks, largely due to its stronghold in coffee. On the other hand, the brand Costa Coffee is driving growth by prioritising value offerings and innovation amid economic challenges.
Despite the dominance of supermarkets and hypermarkets in the distribution of hot drinks in the UK, discounters remains an attractive alternative, as inflation continues to pressure consumer spending and drive budget-conscious shopping. E-commerce also retains higher share than pre-pandemic levels, particularly with an increasing variety of premium hot drink options available online.
The split between foodservice and retail continues to reflect similar trends to previous years. Foodservice volumes are recovering, driven by increased foot traffic in city centres and a stronger return to office work, while the retail channel is experiencing a decline in volumes.
Hot drinks in the UK is evolving rapidly, with the influence of rising costs leading to the greater search for value. The focus on sustainability and health and wellness is also expected to continue.
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Hot Drinks
This report originates from Passport, our Hot Drinks research and analysis database.
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