Grocery retailers would like to get in on the café culture act, but have they got what it takes to deliver the quality?
Starbucks, Costa, Café Nero and a host of imitators have created a £450m ‘cafe culture’ in the UK, says Mintel. But according to researcher Euromonitor, the boom is “well and truly over” and operators are extending their food in a bid to boost average spend.
So, as the coffee shop specialists encroach on grocers’ territory, how much scope if there for retailers and grocery beverage brands to return the compliment?
Matching the quality of café beverages is an ongoing problem for retailers where hot drinks-to-go are not the core offer, and the jury is out on the best way forward. “It’s on the radar of retailers to do more,” says Gavin Emsden, head of customer insight and planning at Nestlé, “but in terms of the best way to
proceed, there’s no one solution yet.”
Katy Hilditch, beverages category lead for Nestlé Foodservice, says: “High-street coffee shops have driven high consumer expectations. Consistent quality and breadth of choice are key.”
Take-out teas, coffees and hot chocolates can offer margins well beyond most standard grocery lines, but retailers routinely struggle with lack of space, problems with plumbing-in equipment and staffing the facility.
In the convenience sector, Nestlé has been pushing its Nescafé.go self-service system, where shoppers select a drink from a range of foil-sealed branded cups and add water from a branded dispenser.
The machine costs £339 including a free ‘starter kit’ or products worth £135 at retail. Nestlé claims the unit can pay for itself within a month, thanks to a margin of up to 60% per cup. C-store retailer Barbara Cooper, of Parkstone Spar in Poole, sells around 120 drinks a week from a Nescafé.go unit and says: “The unit drives snack sales, and vice versa.” Cappuccino is her biggest seller.
Tea can be more problematic for retailers. “We’re all very particular about how our tea is made, and that’s quite a barrier,” says Christine Edwards, customer marketing controller at Twinings - the only branded beverage represented in BP’s forecourt Wild Bean Cafés. “To an extent, coffee is coffee, and it’s quite consistent.
“For tea, it’s more of an issue, and we try to educate end-user accounts on how to make a good cup.”
Unilever has addressed the personal taste issue with the PG 2 Go! - a cup system, currently sold for foodservice, which utilises a PG Freeflow pyramid tea bag attached to the lid by a string.
“It allows people to ‘control the dosage’,” says Unilever UK Foods operations manager David Unwin.
Starbucks, Costa, Café Nero and a host of imitators have created a £450m ‘cafe culture’ in the UK, says Mintel. But according to researcher Euromonitor, the boom is “well and truly over” and operators are extending their food in a bid to boost average spend.
So, as the coffee shop specialists encroach on grocers’ territory, how much scope if there for retailers and grocery beverage brands to return the compliment?
Matching the quality of café beverages is an ongoing problem for retailers where hot drinks-to-go are not the core offer, and the jury is out on the best way forward. “It’s on the radar of retailers to do more,” says Gavin Emsden, head of customer insight and planning at Nestlé, “but in terms of the best way to
proceed, there’s no one solution yet.”
Katy Hilditch, beverages category lead for Nestlé Foodservice, says: “High-street coffee shops have driven high consumer expectations. Consistent quality and breadth of choice are key.”
Take-out teas, coffees and hot chocolates can offer margins well beyond most standard grocery lines, but retailers routinely struggle with lack of space, problems with plumbing-in equipment and staffing the facility.
In the convenience sector, Nestlé has been pushing its Nescafé.go self-service system, where shoppers select a drink from a range of foil-sealed branded cups and add water from a branded dispenser.
The machine costs £339 including a free ‘starter kit’ or products worth £135 at retail. Nestlé claims the unit can pay for itself within a month, thanks to a margin of up to 60% per cup. C-store retailer Barbara Cooper, of Parkstone Spar in Poole, sells around 120 drinks a week from a Nescafé.go unit and says: “The unit drives snack sales, and vice versa.” Cappuccino is her biggest seller.
Tea can be more problematic for retailers. “We’re all very particular about how our tea is made, and that’s quite a barrier,” says Christine Edwards, customer marketing controller at Twinings - the only branded beverage represented in BP’s forecourt Wild Bean Cafés. “To an extent, coffee is coffee, and it’s quite consistent.
“For tea, it’s more of an issue, and we try to educate end-user accounts on how to make a good cup.”
Unilever has addressed the personal taste issue with the PG 2 Go! - a cup system, currently sold for foodservice, which utilises a PG Freeflow pyramid tea bag attached to the lid by a string.
“It allows people to ‘control the dosage’,” says Unilever UK Foods operations manager David Unwin.
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