Focus On - Hot Beverages

Page 4 www.planforprofit.co.uk @PlanforProfitRetail @Plan_for_Profit Market Overview Coffee Overview 1. Coffee is soaring. Coffee is forecast to grow while tea is declining. Retailers should prioritise coffee and grow its space. 2. Prepare for pods. Pods are expected to be the fastest-growing segment after core instant by 2028. Pods and frothy segments will gain the most share of total coffee. Convenience stores currently under trade in pods. 3. Cash in with price-marked packs. As shoppers are experiencing rising prices due to the cost of living, PMPs have started to play a more important role. PMPs have grown share of convenience from 32% YA to 46%, demonstrating its importance. 4. At-home consumption returns. In-home coffee consumption is recovering and could grow in 2024. Purchases in cafes continue to struggle as consumers cut back to manage spend. 5. Be critical of your fixture. 15-20% of coffee shoppers leave the fixture due to several merchandising reasons/difficult fixture navigation, leading to a loss in sales. Following basic merchandising guidelines, ensuring impulsive segments are at eyeline, as well as trading shoppers up vertically and horizontally, will help drive value. Tea Overview 1 1. The tea category is flying in impulse stores. Worth £34.1m and growing by 9% in the past year, the tea market in impulse stores is growing faster than the total market. More than 13 million packs of tea have been sold in the past year, with volume sales down by 2%, indicating that shoppers are willing to pay more for their preferred brews. 2. Don’t forget speciality teas. Black tea commands more share in impulse than total market. Its value share is 74% (normal 70%, decaf 4%) and units share is 81%. 3. Find your niche with speciality lines. Speciality is the number-two segment in impulse (vs number three in total market) with a 12% share of value and 7% of units. Speciality tea generated £4.2m of sales in the past year, or 0.9 million packs, and is bucking category performance, with value at +43% and units at +30%. No other tea segment is growing as fast in convenience stores. 4. Check your stock on the top 4 brands. These top four tea brands account for 79% of all sales in convenience stores – 9% more than in total market. Tetley has the highest share (26%), followed by Yorkshire (23%), PG (21%) and Twinings (10%). 5. Don’t forget fruit and herbal. This is the 3rd largest segment, with annual sales of £2.9m or 1.1 million packs and 13% value share. 6. Trade up with premium. Twinings is the number-one premium tea brand for value and units and with a 10% share of total impulse is the must-stock brand after the traditional black tea brands.