Premiumisation and variety are the key words in the hot beverage market right now according to analyst Key Note.
In its latest Hot Beverages market update it says in the year to May total UK sales grew by 1% but adds that consumers are increasingly turning away from traditional black tea in favour of pod coffees and green, herbal and fruit teas.
The report breaks the market down into four categories: instant and ground coffee; black and green leaf teas; hot chocolate and malted drinks; and fruit and herbal teas.
It says: “The UK hot beverages market is well-established, with a wide and varied range of products on offer across the four main market sectors.
“With an estimated 165m cups of tea and 70m cups of coffee consumed each day in Britain, according to the UK Tea Council, hot beverages continue to represent a vital aspect of daily life.”
Key Note says in value terms, instant and ground coffee is the largest sector with black and green teas remaining in second place.
The coffee shop culture which has developed in the UK in recent years, it says, has created a demand for better flavours and improved quality which has seen the pod market take off.
It’s figures show that between May 2011 and May 2015 the super premium instant coffee market grew in value from £4.8m to £67.2m.
And over the same period sales of fruit, herbal and green teas grew by 67.5%.
It concludes that while consumption habits are changing, alternative and premium products have stimulated growth and that the hot beverage market is extremely robust.
• Key Note 2015 Market Update, Hot Beverages £575 www.keynote.co.uk.