Coffee and Sandwich Shops - Ireland - August 2017


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Mintel

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Usage of coffee and sandwich shops has remained strong between 2016 and 2017 despite the increasing costs of coffee and Brexit impacting upon consumer confidence. The need for convenient hot drink and food options will help to sustain the market throughout 2017, while the need for healthier options will help to attract the attention of health-conscious consumers.

Table of Contents

OVERVIEW
What you need to know
Key themes of the Report
EXECUTIVE SUMMARY
The market
Figure 1: Consumer spending in cafés and coffee shops, by segment, IoI, 2016 (estimated)
Forecast
Figure 2: Indexed estimated value of the Irish café and coffee shop market, NI and RoI, 2012-22
Market factors
Coffee costs set to increase in 2017
Controversy over bacteria in coffee shop ice
Salt and sugar levels under scrutiny
The consumer
International coffee shop brands and fast food restaurants key destinations
Figure 3: Types of coffee shops and cafés that consumers have visited in the last three months for a hot drink, snack or sandwich, NI and RoI, June 2017
Service stations and international sandwich bars see strong usage
Figure 4: Types of coffee shops and cafés that consumers have visited in the last three months for a hot drink, snack or sandwich, NI and RoI, June 2017
Lunchtime and coffee break key drivers for usage
Figure 5: Occasions that consumers have visited a coffee shop or sandwich shop in the last three months, NI and RoI, June 2017
Consumers want more recycling options at coffee shops
Figure 6: Agreement with statements relating to coffee shops and sandwich shops, NI and RoI, June 2017
THE MARKET – WHAT YOU NEED TO KNOW
Growth continues for coffee shops in 2017
2017 sees cost of coffee increase in NI and RoI
Contamination of ice could be an issue
High sugar and salt levels may be off-putting to health-conscious consumers
MARKET SIZE AND FORECAST
Coffee shop sales improve between 2015 and 2017 despite Brexit woes
Figure 7: Estimated value of the Irish café and coffee shop market, IoI, NI and RoI, 2012-22
Drinks continue to make up largest segment of coffee shop and café spending
Figure 8: Consumer spending in cafés and coffee shops, by segment, IoI, 2016 (estimated)
MARKET DRIVERS
Brexit and climate conditions causing coffee prices to increase in UK/NI
Figure 9: Consumer price indices of coffee and tea, UK (including NI), January 2015-May 2017
RoI consumers experience less coffee price growth
Figure 10: Consumer price indices of coffee and tea, RoI, January 2015-May 2017
Hygiene issues may affect sales in some coffee chains
Artisanal coffee shops and sandwich shops could benefit
Figure 11: Agreement with the statement “I trust the quality of goods in a food specialist/artisan more than the goods in supermarkets”, NI and RoI, April 2016
Sugar and salt content a growing issue
Figure 12: Select diet and eating habits that consumers claim to typically do, NI and RoI, August 2016
Figure 13: Agreement with the statement “Menus should display the nutritional content for each item”, NI and RoI, April 2017
Sugar in drinks a growing concern
Figure 14: Top 10 most sugary hot drinks (in grams) from selected foodservice operators, UK, February 2016
Salt content in sandwiches highlighted
Figure 15: Selected sandwiches from coffee shops, by salt content, UK, February 2016
Demand for energy boost will help sustain demand
Long working hours creating need for stimulants and convenience
Figure 16: Average work hours per week, NI and RoI, 2013-16
Potential demand for relaxing drinks too
COMPANIES AND INNOVATIONS – WHAT YOU NEED TO KNOW
Coffee market faces global supply shortage, driving premiumisation
Coffee brands starting to distance themselves from sugar
Cold coffee yet to reach full potential in Europe, although showing promise with Millennials
Café culture coupled with international supply drop means price rises for Irish consumers
WHO’S INNOVATING?
Third-wave coffee seeks to move coffee beyond a product and towards an experience
3fe (Third Floor Espresso)
Coffeeangel
Clement & Pekoe
Caffè Nero rolls out mobile wallet scheme
A greater choice of food and drinks to increase all-day usage
Inclusion of alcoholic drinks blurs line between café and bar to increase evening visits
Cascara launches in US to satisfy Millennial demand for natural flavours
COMPANIES AND BRANDS
BB’s Coffee and Muffins
Key facts
Product portfolio
Clements
Key facts
Product portfolio
Recent developments
Costa Coffee
Key facts
Product portfolio
Recent developments
Esquires Coffee
Key facts
Product portfolio
Recent developments
Greggs
Key facts
Product portfolio
Recent developments
Insomnia
Key facts
Product portfolio
Recent developments
McDonald’s McCafé
Key facts
Product portfolio
Recent developments
Caffè Nero
Key facts
Product portfolio
Recent developments
O’Brien’s
Key facts
Product portfolio
Starbucks
Key facts
Product portfolio
Recent developments
Subway
Key facts
Product portfolio
Recent developments
The Streat
Key facts
Product portfolio
Barista Bar (Henderson Foodservice Ltd.)
Key facts
Product portfolio
Recent developments
THE CONSUMER – WHAT YOU NEED TO KNOW
International coffee chains are the key providers
Service stations see strong RoI usage
Lunchtime usage high among working consumers
Nine in 10 see recycling at coffee shops as important
TYPES OF COFFEE SHOPS VISITED
International coffee shops and fast food chains most likely used for a hot drink, etc
Figure 17: Types of coffee shops and cafés that consumers have visited in the last three months for a hot drink, snack or sandwich, NI and RoI, June 2017
Women more inclined to opt for international coffee shops
Figure 18: Consumers who have visited an international coffee shop brand (eg Starbucks, Costa) in the last three months for a hot drink, snack or sandwich, by gender, NI and RoI, June 2017
Younger consumers embracing café culture
Figure 19: Consumers who have visited an international coffee shop brand (eg Starbucks, Costa) in the last three months for a hot drink, snack or sandwich, by age, NI and RoI, June 2017
Fast food outlets used by half for hot drinks and café snacks
Figure 20: Consumers who have visited a fast food restaurant (eg McDonald's McCafé/KFC) for coffee/ café snacks only in the last three months, by household income, NI and RoI, June 2017
RoI consumers twice as likely to have used domestic coffee chain
Figure 21: Consumers who have visited an NI/Irish coffee shop chain (eg Clements, Insomnia) in the last three months for a hot drink, snack or sandwich, by gender and social group, NI and RoI, June 2017
RoI consumers stronger users of in-store kiosks
Figure 22: Consumers who have visited an in-store branded kiosk for coffee/snacks (eg Tim Hortons, Costa Express) in the last three months for a hot drink, snack or sandwich, by work status, NI and RoI, June 2017
TYPES OF SANDWICH SHOPS VISITED
Sandwich chains used by half in NI, service stations a key location in RoI
Figure 23: Types of coffee shops and cafés that consumers have visited in the last three months for a hot drink, snack or sandwich, NI and RoI, June 2017
International sandwich brands see strongest usage with younger consumers
Figure 24: Consumers who have visited an international sandwich shop brand (eg Subway) in the last three months for a hot drink, snack or sandwich, by age, NI and RoI, June 2017
Service station concessions see strong use in RoI
Figure 25: Consumers who have visited a service stations concession (eg Streat/ Applegreen) in the last three months for a hot drink, snack or sandwich, by age, NI and RoI, June 2017
Figure 26: Ownership of a car, by age, NI and RoI, February 2017
The Greggs effect sees strong NI usage of bakeries
Figure 27: Consumers who have visited a bakery in the last three months for a hot drink, snack or sandwich, by gender and age, NI and RoI, June 2017
REASONS FOR VISITING COFFEE AND SANDWICH SHOPS
Lunch key occasion for coffee shops and sandwich shops
Figure 28: Occasions that consumers have visited a coffee shop or sandwich shop in the last three months, NI and RoI, June 2017
Lunchtime key for working consumers
Figure 29: Consumers have visited a coffee shop or sandwich shop in the last three months for lunch, by work status, NI and RoI, June 2017
Figure 30: Seasonally adjusted unemployment rate (%), NI and RoI, March-May 2013-17
Taking a break important to men
Figure 31: Consumers who have visited a coffee shop or sandwich shop in the last three months for a break/ coffee break, by gender, NI and RoI, June 2017
ABC1 consumers catch up with family
Figure 32: Consumers who have visited a coffee shop or sandwich shop in the last three months to catch up with friends or family, by social class, NI and RoI, June 2017
NI consumers more likely to use coffee/sandwich shops as part of a day out
Figure 33: Consumers who have visited a coffee shop or sandwich shop in the last three months as part of a day out, by gender, NI and RoI, June 2017
ATTITUDES TOWARDS COFFEE SHOPS AND SANDWICH SHOPS
Recycling a key priority for coffee shops
Figure 34: Agreement with statements relating to coffee shops and sandwich shops, NI and RoI, June 2017
Coffee cup waste a hot button issue
Larger chains seen as offering consistent quality
Figure 35: Agreement with the statement ‘You know what to expect in terms of quality from larger coffee shop chains (eg Costa Coffee, Starbucks)’, by age, NI and RoI, June 2017
Atmosphere key to three quarters of consumers
Figure 36: Agreement with the statement ‘Atmosphere is important when choosing which hot drink outlet to go to’, by gender, NI and RoI, June 2017
Half of consumers want more free-from options
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Data sources
Generational cohort definitions
Abbreviations