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Coffee shop culture leads to boom in sales of pods

Coffee shop culture has led to a boom in sales of coffee pods for the home according to new research.

GENERAL MERCHANDISE

Coffee shop culture leads to boom in sales of pods

Analysis from FMCG market and shopper intelligence firm IRI shows that coffee pod sales revenue surged by 52% to £102 million in 2014. Meanwhile, sales volumes increased by 54% to more than 310 million cups sold.

The firm said coffee pods by brands such as Tassimo, Nespresso and Dulce Gusto are fuelling growth for the entire ground coffee segment which is up 14.1% in sales value to £267 million and 4.8% in volume.

Increased promotional activity around direct to consumer coffee machines, particularly around events such as Black Friday and Christmas, has also helped to drive growth of coffee pods since they lock buyers in to specific brands. In 2014, promotions in the run-up to Christmas drove as much as 23% of the annual sales for coffee pods according to IRI’s data.

IRI analyst Jen Ayling said: “The coffee menu in supermarkets has expanded rapidly with coffee shop favourites such as cappuccino, latte and macchiato. As a result the average in-store range now at 23 items compared to 14 items five years ago. This has increased the drinking occasions and made it more relevant for the under 35’s who shun traditional hot drinks in favour of water and soft drinks.“

Premium coffee pod varieties such as Cappuccino, Latte and Macchiato dominate sales with a 62% share, Black Coffee makes up 31% and Espresso 7%.

 

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