Five Things You Need to Know About Takeaway Coffee and Bakery | Products in depth

1. Bakery spending increased 11.5% year-over-year

Bakery sales are soaring in convenience stores. Supported by the trend of shoppers replacing more expensive experiences at cafes and restaurants with affordable treats at local stores, the category is driving sales and profits for independent retailers.

“According to the most recent data from Kantar, total bakery spend increased by 11.5% (excluding cakes), mainly due to price-marked packaging (13.3%) (Kantar),” says Phil Carratt, head of marketing and strategy at Country Choice.

“Within the in-store bakery, sweet products are growing, mainly driven by pastries such as croissants, Danish pastries and pain au chocolat. »

Retailers are reporting that the category is in poor health, with consumers returning to their favorites to lift their spirits throughout the day. Trudy Davies, owner of Woosnam & Davies News in Llanidloes, Powys, says: “Customers are returning to what is traditional and nostalgic for them. They buy battenburgs, slices of custard or Belgian rolls, instead of modern pastries or “trendy” flavors.

“We were always trying new things, but ultimately customers always came back to more traditional options. »

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2. Soaring Prices Present Opportunity for Convenience Stores

At the start of the year, Pret A Manger increased its prices by 18%, while Costa raised prices for the third time in 15 months in May, while making changes to its loyalty program. Their shoppers now have to spend an extra £7.80 to qualify for a free drink. Search by World Coffee Portal revealed in January that the average 12oz latte now costs £3.25, up 33p from a year ago.

Although machine coffee prices have also increased, they remain significantly lower than their café counterparts and therefore provide a more economical solution for consumers who are watching their spending.

Amy Sohal, who runs Ken’s Convenience Store (Premier) in Winsford, Cheshire, has an in-store Robert’s Bakery concession, supported by a Costa machine (pictured). “Customers often come in to buy coffee and a pastry in the morning because we offer good value and convenience,” she explains. “We have noticed that customers want to purchase products from local businesses more often. For example, we work with a local pastry chef and customers love him.

Despite the higher prices that local products can command, shoppers are still willing to trade up for unique lines to treat themselves.

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3. One in four consumers have encountered hygiene problems with self-service coffee machines

The number of coffee vending machines increased by 11% to an estimated 20,771 in the UK (World Coffee Portal), Costa Express being the largest operator, followed by Absolute and We Proudly Serve Starbucks.

Petrol stations remain the most popular places to buy takeaway hot drinks, with convenience stores coming in second, ahead of supermarkets.

However, poor maintenance and hygiene are major factors that discourage consumers and stunt growth. One in four consumers say they have encountered a machine that was too dirty to use in the past year (World Coffee Portal). Two out of five people have found a machine out of order (ibid).

Costa says its Express machines are “incredibly easy” to restock and clean, with staff taking just 30 minutes a day to maintain.

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4. Oat milk is the most popular dairy alternative to self-serve coffee machines

17% of consumers surveyed in The Automation Report 2023 have ordered a hot drink with a dairy alternative from an in-store vending machine in the past 12 months, according to World coffee portal, who performed the analysis.

The report reveals that oat milk is the preferred milk alternative for premium vending and self-serve machines for 50% of consumers. dairy alternative, its popularity is higher than that of the following four alternatives combined: soy, almond, coconut and hazelnut.

Interest in oat milk has increased rapidly over the past five years. A study cited by Finnish milk alternative brand Oddlygood shows that Google searches related to the topic have increased by 400% since 2018, peaking in January this year. The brand, which was recently listed by Délice de France as its preferred supplier of oat drinks, is investing in a pipeline of limited-edition flavors, to help retailers tap into seasonal flavors, such as spicy pumpkin and cinnamon bun.

Amy witnessed coffee buyers’ demand for milk alternatives at Ken’s. “Customers are asking for lacto-free products so they can enjoy coffee drinks,” she says.

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5. Seasonal flavors are a key opportunity

Seasonal flavors are one of the biggest trends shaping the hot drinks market. Major cafes have already brought back their winter ranges, with flavors such as peppermint mocha, chestnut lattes and of course pumpkin spice returning to menus.

Costa is introduction of a Sticky Toffee flavor to its Express machines this winter, while Shell has exclusivity on the Roasted Hazel Costa lines.

Amy says: “We’ve noticed that customers want us to replicate the seasonal flavors they see elsewhere, so we’re trying to find a way to source them. »

“I find people want more of an occasion or an experience with their coffee,” adds Trudy. “Customers are realizing the importance of self-care, work-life balance, etc. and are using coffee and hot drinks to make their day a little more special.”

It’s not just coffee that can benefit from seasonal variations. Country Choice has released a thaw and is selling 85g Sticky Caramel Bread for Christmas, as well as Cranberry Twist pastries (pictured), Mince Pies and Chocolate Cupcakes, which she says are “a perfect winter treat to accompany your client’s coffee”.

Trudy says: “Tastes are seasonal, so this time of year, customers want comfort food. »

By reflecting these trends in-store, retailers can continue to generate sales and profits in the lucrative hot drinks and bakery market throughout the winter and beyond.

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