This article is part of our Hot Beverages Digital Feature.

Coffee pods could be outselling standard teabags within the next five years. That’s according to market analysts Mintel, which claims coffee pod sales through grocers will triple to anywhere between £373m and £499m by 2020. 

To put that in context, take home sales of black tea are currently worth £450.7m a year to retailers; regular instant coffee is worth £223.4m [Kantar Worldpanel 52 w/e 19 July 2015]. Sales of pods have surged 32.3% to £112.1m in the past year. 

“In 2011 only about four to 5% of new coffee products launched in the UK were pods,” says Douglas Faughnan, senior food and drinks analyst at Mintel. “Fast forward to 2014 and about 20% of new launches were pods as there are a huge number of players in the market, which didn’t exist a few years ago.”

Pods may be the standout performer at the moment, but Faughnan notes that they still only account for 10% of the total coffee market in grocery.

And a huge question remains over the value of the wider pods market as the likes of Nespresso and Lavazza pods are sold online direct from the manufacturer and via Amazon. “Nobody has an exact figure for what Nespresso is selling,” says Faughnan. “It’s probably one of the best-kept secrets in food and drink.”

There’s plenty of good news from those who will talk, however. Lavazza is starting to make its AMM capsules available to the retail trade and claims it is massively outperforming category growth. Dualit, meanwhile, is also doing well.

“In two years Dualit capsules have grown six-fold and production capacity has doubled for two years running,” says a spokeswoman for the brand. “Growth will continue as demand and awareness of capsules increases. In three years capsules have catapulted from zero to top five by value and taken the top spot by volume for Dualit products.”

To continue its growth, Dualit is set to replace its original Nespresso-compatible capsules with its next generation sealed version, which it claims maintains freshness, and is set to hit shelves next month.

Tassimo’s grocery sales, meanwhile, are up to £67.7m this year, with 47.8% value growth on volumes up 37.4% [IRI 52 w/e 20 June 2015]. Owned by Douwe Egberts, Tassimo’s growth is partly driven through its partnership with Costa as consumers demand the coffee shop experience at home.

New launches, including the limited-edition Costa Vanilla Latte, have brought £3m to the brand. Partnerships have proved valuable to Tassimo, with the Kenco, Cadbury and Carte Noire ranges also performing well.