Hot Beverages is a prominent category with 97.6% of UK households purchasing at least one hot beverage product in the last year1. This incredible reach means that across the UK over 60bn cups are enjoyed each year2. 2020 saw many consumers spend more time in home which caused the Hot Beverages category to have an exceptional year across all grocery outlets as the category grew value sales 10.2% versus 20193. This was largely driven by the No.1 segment within Hot Beverages that is coffee, which saw value sales increase by 12% in 2020 against the previous year4.
As we move forward into 2021, wholesalers are likely to continue their expansion into online through creating and improving apps and websites. This could help wholesalers thrive if the online market trend transitions well into wholesale too. We also believe that wholesales can grow their hot beverages business by better understanding the category. Convenience shopper missions are changing as we continue to spend more time in home with main shop and planned top up shops being more important in the channel. Therefore leading to larger basket sizes and higher spend in convenience stores. However, it also means that shoppers are more likely to purchase large pack formats5 so wholesalers should provide these for their customers. Another big trend in the coffee category is lifestyle changes with many shoppers choosing dairy alternatives or buying into decaf to control their caffeine intake. These trends can boost wholesalers’ sales if they understand the opportunity to cater for more coffee buyers.
Another way which wholesalers can boost their sales is by providing price mark packs (PMP’s) for their customers. PMP’s can be used to build trust with shoppers while also utilising brand strength and value to increase appeal to shoppers. Prices should be clearly displayed to ensure a simple shopper experience and eye catching to encourage impulse purchases. 44% of shoppers are more likely to shop in a convenience store that stocks price marked packs6. Nescafé provides plenty of PMP’s across their best-selling products under the Nescafé Original, Gold and Azera brands.
However, not all the love should go to the established products. Nescafé has recently released key new products under all 3 of their major brands. Nescafé Gold has just introduced Roastery Collection with a choice of light or dark roast bringing an out of home coffee shop trend in home. Azera has introduced My Way Latte which offers a Coffee shop style latte made with the milk of your choice, playing into the dairy alternative trend. Azera has also just released craft coffee bringing instant craft coffee to consumers, developed in partnership with Grindsmith coffee roasters. Lastly, Nescafé Original has extended their ‘In 1’ range with Frothy’cino, Vanilla Latte and Latte. Wholesalers should consider bringing in these new exciting innovations for incremental category sales.