Coffee category growth driven by instant and premium options
The UK coffee market has grown 8.2% in value year on year, with instant coffee accounting for 76% of home consumption. Retailers are advised to stock a variety of formats, including frothy and premium instant options, to capitalise on the trend. JDE Peet's recommends giving coffee displays ample shelf space and using vertical merchandising to encourage trade-up.
The category’s value growth is heavily weighted toward at-home consumption, where instant formats dominate. Within this segment, specialty mixes and flavored options are outperforming standard offerings, showing a clear consumer shift toward café-style drinks prepared quickly. Single-serve systems also remain a significant driver, with one major brand reportedly holding half of that market.
Retail strategy now focuses on visual merchandising to steer buyers toward higher-margin products. Guidance suggests tiered shelf placement, with basic granules at the bottom and premium or pod-based items at eye level. This approach aims to increase average transaction value while still catering to budget-conscious shoppers through a broad range of price points. Hot chocolate and malted drinks are also highlighted as complementary categories worth adjacent display space.
This trend could reshape how convenience retailers allocate limited shelf space, potentially prioritizing higher-value coffee formats over other beverages. For consumers, the shift may offer a more affordable daily indulgence compared to café visits, though it could also pressure traditional coffee shops to justify their premium pricing. The emphasis on premium instant options may particularly benefit urban professionals and busy households seeking convenience without sacrificing perceived quality.