Quality has become essential across all price points as the boundaries between occasions blur and retailers discover growth opportunities across every demographic.
British consumers have shifted their coffee shop habits home to save money, as they recreate premium experiences with pods and specialty drinks at a fraction of high street prices. The market is fragmenting along generational lines, with under-35s embracing iced coffee and functional beverages like matcha, while milk-based drinks demonstrate remarkable resilience with 17% year-on-year growth to £983.3m.
The hot drinks sector in 2025 presents a picture of resilience and transformation. Despite significant international difficulties, the category continues to grow in value. Quality has become non-negotiable across every price point and format in each segment. The boundaries between occasions are blurring, with iced coffee competing with soft drinks and functional teas replacing supplements. Premium experiences are no longer simply found in coffee shops or specialist retailers. Consumers can access café-quality beverages without leaving their kitchens. Retailers must invest in quality and recognise that the hot drinks aisle offers opportunities for growth across every demographic and day occassion
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