Coffee Break Breakthrough
Discerning consumers are looking for quality, premium offerings they can enjoy both on-the-go and at home, as demonstrated by the fact that more than one in ten households now own a pod coffee machine.
17 September 2015
While Ireland traditionally has been a nation of tea drinkers, in recent years coffee consumption has shot up also, and a morning tea or coffee in or out of the house is a daily occurrence for hundreds of thousands of Irish people. Research shows that 56% of people drink tea at home in the morning, while 43% purchase a cup out of home, with 30% and 27% of respondents doing the same with regular coffee – a further 14% opting for cappuccino, 12% for a latte, 7% for other coffee, 6% for hot chocolate and 3% for herbal tea*. Innovations such as in-home coffee machines have also added a new dimension to saleable products, and research shows coffee experienced a growth of 12% in 2014, bringing sales to €81m. Sales are expected to grow also, and the value of the market is predicted at €157m in 2019**.
*(Source: Bord Bia out-of-home breakfast research, February 2010)
**(Source: Euromonitor International)
A quality cup every time
Using the same freshly ground Mocha Italia beans you’ll find in Costa stores and fresh milk in every cup, Costa Express believes it offers a great way for your customers to grab a quality Costa coffee on-the-go. The brand’s self-serve coffee bars are designed to be simple to use and maintain, and provide the same high standard of drink for every customer time and time again. Costa Express is the quickest and easiest way to ensure your customers enjoy a quality cup of Costa coffee every time. State-of-the-art Costa Express machines use precision grinding, tamping, temperature and perfectly steamed milk, to provide a quality cup of Costa coffee every time. With as little as 1m floor space required, it’s convenient for retailers as well, whatever the size of your premises. Costa’s telemetry allows the company to monitor and develop your coffee business 365 days a year.
Costa works with partners to enable them to provide a quality Costa coffee for their customers. There’s no capital outlay as the company installs your machine for free, and provides all of your coffee and consumables. The brand’s unique revenue share scheme means income is shared at an agreed rate and Costa is always on hand if a retailer needs assistance. The brand states that all Costa Express sites have dramatically increased coffee sales and driven new customers onto forecourts, so all retailers have to do is keep your machine topped up with fresh milk and watch your profits grow.
Interested? For more information, contact – ROI telephone: (021) 5003526 or NI telephone: 02892 688349.
Q: Why has Costa Express become so popular and widely available in such a short time period?
Since the launch of Costa Express last year, we have installed machines nationwide with the Costa brand delivering growth in like-for-like coffee sales from 50 – 100%. Costa Express is a proven driver of footfall into our partners’ businesses with sites seeing new customers that never visited their business before and now form part of their daily routine. Research in Ireland has shown that 11% of people are prepared to drive past other forecourts or convenience stores to visit one that is serving Costa Express. Costa truly is for coffee lovers of all ages as they seek out great tasting coffee.
Q: How do you differentiate your product from your competitors?
It takes time to make great coffee, not 30 – 40 seconds like some coffee machines produce. All Costa Express machines produce great tasting coffee because we take a little more time and we always use fresh coffee beans and fresh milk. Every drink is crafted to a very particular recipe that creates the same wonderful flavour as our Costa stores; consistency and great coffee is what customers want. Each Costa Express machine communicates to us via our bespoke telemetry package installed in every machine that closely monitors the quality and consistency of each drink and alerts us of any faults or downtime.
Q: What is the set up and running cost to a retailer of the Costa offering?
Costa Express is a turnkey operation for any retailer. There is no risk and no capital investment in equipment or stock. We use state of the art equipment and technology unmatched by any other supplier. If you would like to find out how Costa Express can increase your coffee revenue then call us on ROI: 021 500 3526 or NI: 02892 688349
Q: What feedback have you received from retailers who have installed your offering?
All feedback has been extremely positive, don’t just take our word for it, have a read below of exactly what our customers have to say. Mark Spitzer, fresh food manager for the Joyce Group: “For us it was an easy decision to work with Costa who are providing a super solution for the retailer and presenting our customers with great menu choice aligned with the Costa brand and expertise.”
Paedar Aspel, convenience and forecourt owner, Kanturk and Youghal, Co. Cork: “Since introducing the Costa brand to both our stores we have seen a significant increase in cup volume sales and many new customers visiting our stores to purchase Costa Coffee. I view the offer as a significant footfall driver within my two stores.”
Ray Morrissey, store owner, SuperValu Cashel: “In SuperValu Cashel we are all about good food and good karma. The Costa brand enhances this ethos.”
Eddie Kane, multi-site owner of Supervalu supermarkets: “I was looking for a branded coffee solution that would drive footfall and strengthen my overall offer to my customers. Costa has delivered for me on both fronts. Sales have been very positive and feedback from customers on the quality of the Costa Express solution had been superb.”
Q: What advice would you offer retailers to help drive sales in your category?
Call Costa Express on ROI: 021 500 3526 or NI: 02892 688349. Costa Express is a world class coffee platform that is fuelling the nation within forecourts and convenience stores throughout Ireland. The growth of the Costa Express brand is backed by our full store network of 99 Costa stores throughout Ireland with a further 11 stores due to open in 2015. With a Costa store in every majortown in Ireland, Costa brand awareness is very high.
HOT BEVERAGES AT A GLANCE
- Research in Ireland has shown that 11% of people are prepared to drive past other forecourts or convenience stores to visit one that is serving Costa Express*
- Nescafé Azera is growing by +40.7%, with its sales rising by €1.2 million in the last year**
- Sales of coffee pod machines are also accelerating, up 36%***
- An increasing number of households (now more than one in ten) own their own pod coffee machine****
- Nescafé Dolce Gusto has sold more machines this year than any other brand*** and will launch two machines in September – Stelia and Drop
- Coffee consumption has shot up in recent years with 4,558 tonnes of coffee consumed in Ireland last year
- More than 6,000 people from over 100 countries will converge on Dublin next 23-25 June for World of Coffee, Europe’s greatest coffee gathering
- 56% of people drink tea at home in the morning, while 43% purchase a cup out of home*****
*(Source: Costa Express)
**(Source: Nielsen 52 w/e 9 August 2015 Excluding Discounters)
***(Source: GFK Data 52 w/e July 2015)
****(Source: Kantar WP 52 w/e 16 August 2015 Pod Penetration 13.4%)
*****(Source: Bord Bia out-ofhome breakfast research, February 2010)
Premium coffee innovation
Consumers’ love of coffee shop culture is resulting in the longterm trend for coffee shop-quality coffee at home. As a result, coffee producers are on a mission to provide new, more premium products for the category. The launch of super premium coffee, and brands like Nescafé Azera, has been market-changing innovation. Nescafé Azera has proved an immediate success with consumers, growing by 40.7% and with its sales rising by €1.2 million in the last year.*
Nescafé Azera believes it is bringing the glamour back to instant coffee and is playing a key role in driving category growth. The new advertising campaign ‘Be Your Own Barista’ launched in March 2015 has resonated very strongly with consumers. The ad, set in Rome, shows that you can ‘Be Your Own Barista’ at home with the high quality Nescafé Azera range of coffees. Nescafé Azera continues to lead the way within the super-premium segment with the launch of Nescafé Azera Espresso last February.
Shoppers continue to want to get the best value from their coffee, and as such are buying brands they know and trust. Everyday coffee has benefitted significantly from this trend and Nescafé Gold Blend remains the undisputed leader.*
In spring, Nescafé Gold Blend launched a major new media campaign. Timed to support the launch of a new blend for Nescafé Gold Blend, which now has an even better taste, the campaign is aimed at re-engaging shoppers and consumers within the premium segment, which is the largest in the coffee sector in value. The campaign included TV, cinema, social media, digital and in-store media.
Sales of coffee pod machines are also accelerating up 36%**, and brands such as Nescafé Dolce Gusto continue to offer consumers choice akin to that found out of home. Consumers’ love of coffee shop culture is resulting in the long-term trend for coffee shop quality coffee at home. As they seek this experience, an increasing number of households (now more than one in ten)*** own their own pod coffee machine. Nescafé Dolce being introduced to tea during their formative years.
Gusto has sold more machines this year than any other brand** and will continue to lead the charge with the launch of two machines in September – Stelia and Drop, to further drive consumer desire.
*(Source: Nielsen 52 w/e 9 August 2015 Excluding Discounters)
**(Source: GFK Data 52 w/e July 2015)
***(Source : Kantar WP 52 w/e 16 August 2015 Pod Penetration 13.4%)
Q&A with . . .Sara Clifford, senior client director for ambient grocery, BWS and confectionery, Dunnhumby Ireland
Similar to many other categories, we are seeing that customers are seeking convenience, value, and are more conscious of their health. As a result we have seen growth within pods in the coffee category and in more non-standard teas within the tea category.
Q: How can hot beverage brands engage with consumers in-store to drive sales?
As I think about the success that we are seeing within coffee pods, two things really stand out to me. First, the growth in this segment is due to recruitment of new customers and in the most recent figures we are seeing that coffee has recruited customers that are actually spending less and visiting less often than their existing customer base. To maintain long term sales growth, brands need to focus on rewarding loyalty and encouraging their customers to develop consistent patterns with their products.
If a product is great value per serving, but has a slightly higher unit price – brands need to explain that to customers. Because health and wellness is such a growing trend, customers are also very responsive to messages that convey this. Not only does the content need to be relevant, but it is also important that consumers receive this information in the place and time that is relevant to them. Targeted and even personalised media will provide brands with the best return on their investment.
Q: Consumers are increasingly seeking health and wellness options, have we seen this change in behaviour impact the hot beverage sector?
They are and we have seen this come through in our customer data. This is especially true in categories like tea, where we see that customers are adding green, fruit, and herbal teas to their repertoire or in some cases completely replacing their standard tea. We recently did attitudinal research within the tea category and what we found was that far fewer customers are introducing their children over 16 years of age to standard tea. I can say from personal experience, after only a short time living in Ireland, it was evident that tea is a huge part of culture and daily life here.
When we asked consumers why they drink tea, they shared messages of comfort, relaxation and referenced that it was something they grew up with. There is a genuine concern for the long term health of the tea category if fewer consumers are being introduced to tea in their formative years.
Q: What advice would you give retailers in order to further drive sales in this category?
Although there is a continued trend of customers spending more in the category and putting more of a focus on convenience, ensure that you have coverage across the full breadth of customer needs. As with many other categories, emerging trends do not suit all customers. Although we are seeing some switching of customers’ spend from instant soluble coffee products to new innovations such as pods, this only represents about 20% of the growth for this category. The majority of this is coming from customers expanding their current spend in the category. There are entire segments of customers that are not engaging with this new innovation. It is essential that retailers still serve all types of customers and their many needs – rather than putting all of their focus in a single area.
Sara Clifford joined Dunnhumby in Cincinnati, US, over five years ago and has been working for Dunnhumby Ireland since June 2014.
Make every day special
Ireland is traditionally a nation of tea drinkers, however, detailed research has found that coffee consumption has shot up in recent years with 4,558 tonnes of coffee consumed in Ireland last year. With this in mind, Aryzta Food Solutions has combined its expertise with Starbucks Corporation, and is proud to introduce to the marketplace a coffee proposition that caters for the Irish consumer’s new-found love for coffee.
Seattle’s Best Coffee started its journey in 1970. Named Stewarts Brothers Coffee, the company prided itself on roasting fresh coffee beans every day. Seattle’s Best knows that consumers love a rich, smooth and medium blend, and wanted to ‘Make every day special’.
Seattle’s Best Coffee listened to what the consumer had to say and created its unique Henry’s Blend. Using Fairtrade and 100% Arabica beans, Seattle’s Best Coffee is a premium and accessible offer. Dedicated to constantly innovating to ensure that retailers remain at the forefront of trends within the marketplace, the company believes it can offer a coffee proposition that is suited to the retail landscape and one that will drive growth within the hot beverage category. With an exciting range of coffee, it would be easy for consumers to lose themselves in a hot Cappuccino or cool down with an Iced Caramel Latte.
Seattle’s Best Coffee provides a fully branded solution in-store with self-serve and barista options. The touch screen functionality enables the consumer to choose their drink, whilst pouring, the screens will display coffee link deals to entice the consumer with a sweet treat to enjoy with their hot beverage.
Complementing this coffee offer and catering to the needs of tea drinkers, Seattle’s Best offers an exclusive range of speciality flavoured Tazo Teas. With classic blends like Earl Grey, English Breakfast or fusions such as Blossom Berry and Chai Spice, there is a combination to suit every tea lover’s preference.
Welcome to the world of Coffee!
More than 6,000 people from over 100 countries will converge on Dublin next 23-25 June for World of Coffee, Europe’s greatest coffee gathering and one of the world’s pre-eminent coffee events. As well as being the only pan-European event dedicated to specialty coffee, it’s also the only event that promotes speciality coffee to multiple market sectors, including cafés, roasters, green coffee traders, restaurants and hotels.
The event moves to a different European city each year and no matter who your target audience is, you can be sure that World of Coffee Dublin will offer an abundance of potential customers as thousands of coffee professionals and enthusiasts get together for a three day celebration of coffee. An exit survey at last year’s event showed that 98% of visitors thought it was excellent and a must-attend event on the coffee circuit. The World of Coffee event is owned and organised by the Speciality Coffee Association of Europe (SCAE). SCAE is a membership association for the speciality coffee industry that represents over 3,000 members in 90 countries around the world.
The 2016 event will host the World Barista Championship and the World Brewers Cup. There will also be an expansive programme of educational seminars, talks and cuppings, the SCAE Excellence Awards, New Product of the Show Awards, SCAE Photography Awards along with the Re:co Speciality Coffee Symposium, plus a busy social diary of parties and networking events.
It’s also a great event for those interested in spotting new trends and discovering exciting new innovations in the coffee and foodservice markets over the past 12 months.
An early bird offer is currently running until end of September. Check out www.worldofcoffeedublin.com for further information and to book a stand. ■