Ian Bryson, Managing Director of Finlay Beverages, shares his thoughts on why coffee – and in particular cold brew coffee – has a neon bright future in the UK and Europe
Finlays might be mostly famous as a tea business, but in fact we have over a century of experience in roasting, grinding, extracting and packing coffee. Our heritage in coffee gives us a unique perspective on current trends and where the industry is heading next. And we believe there’s never been a better time to be in the coffee business.
From Strength to Strength
Innovation that drives premiumisation is a key characteristic of the industry. Single-serve pods, single-origin coffee and the inexorable rise of cold brew are among the most exciting trends, particularly in food service. According to Allegra, there are now 37,598 branded coffee shops across Europe, up 1,235 in the last year. By 2024, that the number is expected to reach 45,000. The UK is the largest market in this sector, closely followed by Germany and France. Interestingly, growth is reaching all corners of Europe with the highest growth rate in Romania at 28.3%.
The UK retail market also continues to grow with sales of roast and ground coffee now worth £422m (Source Kantar 52- week data to 29.12.19). The sector is growing at 6% in value and 7% in volume. The highest growth is still coming from single serve pods which are now worth an incredible £200m. Consumers, it’s fair to say, have an unquenchable thirst for the black stuff in all its glorious forms.
Ready to Capitalise
Finlay Beverages has a major share of the UK retail private label roast and ground coffee market. It also has a major share of the foodservice market. To capitalise on the continued growth in coffee, we have embarked on our biggest ever capital investment plan for coffee at our Yorkshire site. At the end of 2019, we completed the installation of our second roaster from Brazilian manufacturer Lilla. When coupled with the knowledge and experience from our team of coffee specialists, the hybrid roaster means we can match blends and taste profiles across retail and foodservice.
This means our customers will see improved flexibility with a wider range of coffee options and taste profiles available to drive new and incremental consumer sales. We’ve also installed three new high-speed, fully-automated, packing lines which will mean we can offer improved case packing and, in the future, environmentally-friendly packaging options.
A Hugely Exciting Opportunity
Our focus isn’t just on dry, packed coffee, but also on liquid coffee extracts and in particular, cold brew. According to our Insight Team, the ready to drink and iced coffee sectors in Europe are now worth $1.9bn and this is set to grow to over $2.6bn by 2024. Cold brew, made by steeping coffee grounds in cold water resulting in a smooth, aromatic and perfectly balanced coffee, is a hugely exciting opportunity for European beverage brand owners. Our market-leading US cold brew business has skyrocketed in recent years and we believe we are on the brink of a similar explosion here in Europe.
A Cut Above
There are many cold brew products available on the European market, but until now, the quality simply hasn’t been up to scratch. We’re here to change that. By combining our 110 years of roasting and grinding experience in the UK, with our proprietary extraction knowledge from the US, we can now produce cold brew coffee on a whole other level. We are now creating our own cold brew coffee with a bespoke European taste profile and sampling with customers across the region to increase our knowledge of their expectations. This knowledge is key to our growth strategy.
Looking to the future
In summary, coffee has a neon-bright outlook in the UK and Europe as the growth of recent years shows no signs of slowing.
The key for beverage brand owners is to get ahead of the curve in finding ways to tap into consumer demand for premium, differentiated products. In all our 110 years, there’s genuinely never been a more exciting time to be in coffee.