The trend in hot beverages is similar to that across other retail categories - a mixture of everyday necessity, treat, choice and health. Companies such as Starbucks have certainly helped raise the profile of the coffee culture, although replicating the Starbucks experience in the home is very difficult.
Roast and ground coffee are growing as customers are seeking to understand more about coffee and want a better cup. They look for the different types of coffee offered in roast and ground. People want to engage with the product more, with sales of coffee beans showing strong year-on-year growth.
There has been no step change in innovation in standard coffee. Also having many variants of the same product restricts space opportunity for innovation, especially when operational concerns in branches have to be considered. The challenge is to come up with products with a real point of difference.
There has been a small volume increase in everyday tea (the largest sector) and value is up slightly due to inflation in the market last year.