Exploring the UK Iced Coffee Market in 2023
The UK's coffee market, particularly the iced and the ready-to-drink (RTD) segment, has seen a significant upswing over recent years.
From high-street coffee chains to local independent retailers, the demand for iced coffee is ever-rising. This chilled beverage is not just a summer fling but a year-round love affair for British consumers. Driven by an increasing demand for convenience, health-conscious choices, and a thirst for innovative flavours, the iced coffee market is experiencing significant growth.
- The sector is highly impacted by sustainability and ethical considerations, with 60% of consumers willing to pay a premium for ethically sourced coffee.
- The rise of speciality coffee shops and the growing popularity of cold brews will further drive growth in the iced coffee market.
- Retailers have a clear opportunity to increase their market share by offering consumers more variety and convenience.
Examining the UK Iced Coffee Market
Iced beverages have been fully embraced by the UK's largest branded coffee chains, indicating a strong presence and increasing acceptance of this segment in the UK market, as noted by World Coffee Portal. In fact, the Iced/RTD Coffee Drinks Market in the United Kingdom registered a positive CAGR of 23.35% during the period from 2015 to 2020, according to Market Research.
A study by Statista suggests that the UK RTD coffee segment alone is expected to grow annually by 7.36% (CAGR 2023-2027) to reach a market volume of US$145.50m by 2027. Retail sales of iced coffee have also seen a substantial increase, with sales soaring 35.4% in 2022 as reported by The Grocer. This trend suggests that the iced coffee market in the UK is growing steadily and becoming more popular among consumers.
Factors Influencing the Growth of the UK Iced Coffee Market
Several factors contribute to iced coffee's continued growth and popularity in the UK. These factors underpin the market's current state and provide valuable insights into the future shape of the iced coffee industry in the UK.
Consumer Preferences: An increasing number of consumers are seeking out new and unique flavours, pushing coffee shops to innovate with their iced coffee offerings.
Health and Wellness Trends: As consumers become more conscious of their health, they are demanding healthier versions of iced coffee, including options with less sugar or alternatives to dairy.
Convenience: Ready-to-drink iced coffee products are gaining popularity due to their convenience and availability.
Sustainability: Consumers are increasingly interested in ethically sourced coffee, and willing to pay a premium for sustainable options.
Sustainability and Ethical Considerations
The growing demand for ethical and sustainable products has made sustainability an important factor in the iced coffee market. A significant number of consumers are willing to pay more for ethically sourced coffee. A study shared on phys.org revealed that, on average, consumers are willing to pay a premium price of $1.36 more per pound for ecolabelled coffee.
This allows retailers to differentiate their products and capture a larger market share by offering ethically sourced options.
Eco-friendly Packaging Solutions
Packaging is an important consideration in the iced coffee market, as it has significant environmental impacts. Eco-friendly and sustainable packaging solutions are gaining traction among consumers, and businesses have a clear opportunity to capture a larger market share by investing in more sustainable packaging options.
Many companies are already exploring eco-friendly packaging solutions such as biodegradable cups, straws, and lids. This will not only reduce waste but also increase efficiency and cost savings for businesses.
Health and Wellness Influences
With consumers becoming increasingly health conscious, demand for healthier versions of iced coffee is rising. Consumers are looking for options with less sugar and fewer calories and alternatives to dairy-based drinks. In response, many producers are introducing new products such as coconut or almond milk-based cold brews and organic plant-based lattes.
A report on Healthline and Ecowatch highlights that cold brew coffee contains compounds that may reduce the risk of heart disease, including caffeine, phenolic compounds, and magnesium. Furthermore, a scoping review on ResearchGate points out the health benefits of cold-brew coffee due to its low acidity and high antioxidant activity. Iced coffee products with added functional ingredients have emerged as a popular trend, with ingredients such as collagen, probiotics and adaptogens being added to enhance the nutritional profile of the drink.
The UK iced coffee market has seen impressive growth over the last few years and is expected to continue to experience steady growth in the coming years. The demand for convenience, health-conscious choices, innovative flavours and eco-friendly solutions all contribute to this trend. Retailers have an opportunity to increase their presence in the market by offering consumers more variety, convenience, and ethical options.
The health benefits of cold brew coffee and the growing demand for sustainable packaging solutions are also likely to drive further growth in this sector. Retailers should consider investing in more sustainable packaging solutions and introducing new, healthier products to meet the demands of their consumers. With an increasing emphasis on sustainability and wellness, it is clear that the future of the iced coffee market in the UK looks positive.
How Can Uren help you?
Uren, a pioneer in flavour solutions, enhances remarkable coffee experiences, skilfully infusing their expertise to elevate and perfect enticing natural flavours to add to your coffee or syrup such as maple, mince pie, pumpkin spice, liquorice or coconut. If you are looking for a coffee flavour to add to beverages, desserts or confectionary please contact Uren.
Our NPD department are on hand to advise you of suitable flavours or for recipe development. If you are looking to reduce sugar in a recipe they can help come up with a solution using Sensugar – a natural flavour for those wanting to lower their intake of sugar without compromising on taste.