This report provides the results for the Hot Drinks market in the UK from Canadean's unique, highly detailed study of consumers' Consumer Packaged Goods (CPG) consumption habits, and forms part of an overall series covering all CPG product markets. Its coverage includes, but is not limited to, consumption behaviors, the extent to which consumer trends influence their consumption, the value of the market these trends influence, and brand and private label choices as well as retailer choices. Much of this information can also be analyzed by specific consumer groups, providing hard and fast data on consumers and markets at the product category level.
Introduction and Landscape
Why was the report written?
Marketers in the Hot Drinks market face a major challenge. Understanding market size and segmentation is valuable, but the key to effective targeting is knowing just how valuable specific consumer groups are, and being able to quantify the impact of consumer trends. This data report solves these problems by providing survey-based data on consumer trends and consumer groups, and market data that shows the exact size of consumer groups, how much of the Hot Drinks market they account for, and which consumer trends drive their behavior.
What is the current market landscape and what is changing?
As consumer confidence increases proportionally to economic recovery, consumer trends will be directly affected. Since the global financial crisis of 2008-2009 the retail market has been characterized by an increase in the amount of discounted and own-brand products. Coffee, tea, and other hot drinks are not considered essential items and therefore consumption patterns have been affected widely. As economic and market recovery continues over 2012, consumption patterns will record a positive trend in both the Medium and Heavy frequency bands and the amount of Non-users should decrease.
What are the key drivers behind recent market changes?
Consumers' uptake of products and the influence of consumer trends are fundamental causes of change in markets - making knowing what these trends are and the extent of their influence crucial. The survey-based data provided in this report examines over 20 consumer trends that affect the market and examines the share of consumption across 26 consumer groups. This data provides a detailed insight into exactly who the consumer is and just how much impact the latest consumer trends are having.
What makes this report unique and essential to read?
The data provided is unique in the market as it tracks consumer behavior through to its actual value impact on a product market. This provides readers with a unique data analysis of the market, allowing marketing tactics and strategy to be updated in line with the very latest consumer behaviors.
Key Features and Benefits
- Consumer data, based upon proprietary surveys and then consumer group tracking and modeling for the following specific categories: Coffee, Tea, and Other Hot Drinks.
- Detailed consumer segmentation covering over 26 consumer groups, 20 consumer trends, and consumption frequency for each product category.
- Consumer penetration for brands and private labels, based upon the original survey and then subsequent consumer tracking and modeling.
- Unique retailer choice data at the product category level, based upon the original survey and then subsequent consumer tracking and modeling.
Key Market Issues
- Consumer analysis indicates that Hot Drinks in the UK are consumed mostly by consumers in the urban market, accounting for almost three-quarters of the total Hot Drinks market share by value. As such, Hot Drink producers need to account for urban trends when targeting their products.
- Private labels have significant penetration in the UK market, reaching almost one-fourth of consumers in the Other Hot Drinks category. However, this isn't as high as in other CPG categories in the country, meaning retailers can continue to increase their share of the market.
- Consumer analysis reveals that consumption of Hot Drinks increases with age and Older Consumers account for the largest share of Hot Drinks consumed in the UK. Companies and marketers should therefore factor in this demographic trend while designing any promotional campaign and advertisement.
- Although the UK market is relatively fragmented, the four largest retailers account for more than 80% of the Hot Drinks market in value terms. This indicates a high bargaining power compared to product manufacturers.
- Switching analysis indicates that consumer loyalty stands low for hot drinks consumers in the UK as the top three retailers witnessed a large number of end consumers switching to other retailers in the last six months.
- Consumer survey results indicate that Personal space and time and Better value for money are the leading trends influencing consumers' choices of Hot Drinks in the UK. The importance of the Better value for money trend is indicative of the weak state of the UK economy, with consumers carefully weighing the costs and benefits of the products they consume.