UK Food And Beverage Market

Continued strength of sales of instant coffee is leading to a resurgence in the hot beverage market, according to

The overall sales of hot drinks have risen by 2.4% over the last 12 months with most sales coming from instant coffee experts Nescafe and Kenco. The market is estimated to be worth around £1.73 billion a year to retailers, with interest within the convenience market rising year on year.

In 2011, the powdered beverage market began to rise from Q4 2011 when hot beverage manufacturers reached sales of £1.44billion. During this time, the beverage industry was also battling through tough economic conditions. Over the last year however, instant products have grown by 5.1% and now make up around 43% of the total beverage market. Coffee is still thought to be the driving force behind sales, with hot chocolate and tea products closely following.

Innovation within the premium coffee market is also having a huge impact on sales. New flavours, blends and combination products are pushing their way to the top, with Nescafe Gold Blend now estimated to be worth £86 million to the grocery trade.

Hot beverages, such as teas and coffees, help elevate the mood of consumers and increase energy levels. People associate hot beverages to improve cognitive function in the morning and raise motivation for the day. Green tea as an example, aids in fat burning and improved the metabolic rate of the body.

Private Label Beverages

Beverages are often segmented into tea, coffee, milk and others. The private label beverage market has seen growth from the following factors:

  • An increasing focus on health and wellness
  • The rise of the single pod coffee machine as a preferred at home alternative
  • The rising popularity of on the go products
  • Growing interest in exotic flavours

The increasing focus on health has led tea manufacturers to promote the benefits of antioxidants and flavonoids in the beverage. The preference for beverages with detox and de-stress benefits has also led to the emergence of specialist tea outlets.

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