Sector review

Hot beverages

Tom Gockelen-Kozlowski

Sit down, relax and have a cuppa. Thanks to a wealth of supplier activity, retailer innovation and changing consumer demand, hot beverages has become one of the most significant growth categories in the independent channel.

So, it’s worth taking a moment and exploring the latest news and trends affecting this market.

Firstly, longstanding, established brands are refreshing their packaging and portfolios to remain relevant in changing times, and Kenco – part of the Jacobs Douwe Egberts portfolio – has recently updated the packaging of its premium Millicano range.

Across the brand’s three blends – Original, Intense and Decaff – the range “brings to life whole bean coffee in an instant”, according to the company.

Investing in multimillion-pound media campaign from October to December 2022, Jacobs Douwe Egberts believes there is a significant opportunity for the independent channel to capitalise on the trend.

“As industry leaders who pioneered instant coffee tins in the UK, we are excited to bring our fresh new look to market,” says Roberto de Felice, marketing director at Jacobs Douwe Egberts. “We are proud to create quality product experiences to support our wholesale partners as the coffee market continues to grow and remain relevant to consumers.”

Another premium coffee brand from Jacobs Douwe Egberts – L’Or – recently updated its portfolio with three new products: L’Or Artiste, L’Or Instant Jar and L’Or Flavours Collection Aluminium Capsules. The launches represent the first new lines from the brand

SUPPLIER VIEWPOINT

Susan Nash

Trade communications manager, Mondelez International

The hot chocolate segment as a whole is in strong year-onyear growth in the independent channel, proving its ongoing relevance to shoppers throughout the year. Mondelez International’s extensive range includes Cadbury Hot Chocolate, Cadbury Instant, Cadbury Highlights, Cadbury Bournville Cocoa Powder, Fry’s Hot Chocolate, and premium brand Green & Black’s Cocoa and Hot Chocolate – with products tapping into the drinking chocolate, instant chocolate and cocoa sub-categories. Cadbury is the UK’s number-one hot chocolate brand and is growing by 8.7% year on year.

In terms of current trends, balance and well-being remain important considerations for many, which provides an opportunity for wholesalers and their retail customers. Mondelez International offers customers a lighter alternative to enjoy hot chocolate through the Cadbury Highlights brand. Cadbury Highlights Milk Chocolate has the smooth, milk-chocolatey taste of the number-one chocolate brand, with a recently improved flavour and pack design, to give strong standout on shelf.

At only 38 calories per cup, the product meets shopper demand for lower-calorie options and will help wholesalers to ensure their retailer customers’ fixtures remain relevant despite the rise of the trend for healthier living. in five years.

L’Or Artiste is a micro-ground coffee available in two variants – Vigoroso and Delicato – while L’Or Instant Jar sees the brand move into a new-shaped, recyclable glass jar that has had its black plastic removed.

Finally, the new Nespressocompatible L’Or Flavours Collection comprises capsules available in three flavours: L’Or Chocolate, L’Or Caramel and L’Or Vanilla.

“L’Or continues to be the standard for quality coffee experiences across all key coffee categories, and these new ranges strengthen existing consumption occasions, as well as unlocking new ones,” says de Felice.

Supplier investment isn’t solely occurring in the coffee market, however.

Premium tea brand Clipper has removed the foil bags in its boxes of tea in order to make them fully recyclable. The Dorset-based company says it has invested

more than £1m in a new production line to make its new box, which is reinforced to make sure the tea bags remain protected and fresh.

The move is expected to save at least 20 tonnes of metallised plastic from going to landfill or incineration every year and follows the rollout of unbleached, plant-based and fully biodegradable teabags.

“After launching our industry-first biodegradable teabag, we were determined to keep momentum and address non-essential plastics across our ranges,” says Bryan Martins, Clipper’s marketing and category director.

Those hunting for the most innovative – and most profitable – corners of the hot beverages market will want to look at the rise of in-store coffee-shop-style offers, which many independent retailers are now developing.

Spar wholesaler the Henderson Group has provided a great example of the potential for this market, including the first-ever Barista Bar Coffee drive-thru at its new Spar Mallusk store in Northern Ireland.

“Mallusk is largely industrial, with many businesses operating in the area. However, it also has high passing trade and residential areas on its outskirts,” says Mark McCammond, retail director at Henderson Group.

Coffee can be ordered online via Spar’s Savvy Shopper App and collected at the store. “Barista Bar, created by Henderson Group’s foodservice business, has seen exceptional growth in the past couple of years,” says McCammond. “The popular coffee brand has gained an even greater presence in our Spar, Eurospar and Vivo branded stores, and now we are

Kenco Millicano – Jacobs Douwe Egberts has updated the design of its Millicano tins, which are now available in Original 100g, Decaff 100g and Intense 95g formats across all channels.

Clipper Teas – The company extended its green tea range with the launch of Super Greens. Each bag contains 15% of people’s daily recommended vitamin C intake.

PRODUCT NEWS

Starbucks – The Seattle-based coffee giant has launched two of its chilled coffee flavours – Caffè Latte and Caramel Macchiato – in a multiserve, fully recyclable format.

L’Or Flavours Collection – Part of a wider investment in the brand, L’Or Flavours Collection has capsules in three premium flavours: L’Or Chocolate, L’Or Caramel and L’Or Vanilla. Cadbury – Cadbury recently altered the flavour and pack design of its Cadbury Highlights Milk Chocolate. This lighter alternative to hot chocolate has 38 calories per cup.

Roast 440 – Caterforce’s Roast 400 coffee brand is available to the foodservice buying group’s members and has been developed with independent foodservice outlets in mind.

The wholesale sector is evolving, and so are we.

Take a look at our new-look website betterwholesaling.com where you will find: • More news and thought leadership • In-depth wholesaler profiles and video interviews • Sector and category reviews • Easy-to-digest infographics highlighting key industry trends

delighted to introduce the first drive-thru concept for the brand in Northern Ireland.”

Henderson Group is also adapting to the changing demands of consumers. At Queen’s University in Belfast, the company has created an offer that reflects the diets of today’s young people.

“Our new store at One Elmwood, the new Queen’s Student Centre and Students’ Union, is proud to introduce the first-ever non-dairy selfserve coffee concept under Barista Bar, with its unique plant-based-only machine, which we believe is a first for Northern Ireland,” says Spar store manager Glenn Patterson.

“Barista Bar Planted will sit alongside two of our standard machines, offering a full range of delicious hot drinks.”

As more wholesalers wake up to the opportunity with this blending of foodservice and retail offers, suppliers are on hand to provide guidance and insight.

“Larger stores in particular will need to work on their layout to ensure food to go is more accessible, especially if they are broadening their range to include things like hot food, servery counters and coffee,” says Phil Carratt, head of marketing and strategy at Country Choice.

One challenge is adapting to shifting consumer demand in response to the twin shocks of the pandemic and the current cost-of-living crisis. “During the pandemic, store-prepared food to go struggled as the traditional customer stayed at home, and retailers diverted both labour and shelf space to more in-demand categories. As a result, availability of food to go was poor,” says Carratt.

“However, this approach has left retailers on the competitive back foot as footfall returned and consumers sought a change from homemade meals. That said, with the focus likely to be on value for at least the next 18 months, retailers are in a strong position.”

With this in mind, it’s time to finish off that cuppa and get to work capitalising on what remains one of the independent channel’s most exciting opportunities. 1. Coffee demand is driving new formats – A drive-thru coffee shop is one of the latest innovations in the hot drinks-on-the-go market. Coffee at the Henderson Group’s new Mallusk store can be ordered online via Spar’s Savvy Shopper App and collected at the store. “Barista Bar, created by Henderson Group’s foodservice business, Henderson Foodservice, has seen exceptional growth in the past couple of years,” says Mark McCammond, retail director at Henderson Group.

The retail group is also behind Northern Ireland’s first-ever non-dairy self-serve coffee concept – under the Barista Bar brand. Barista Bar Planted will sit alongside two standard machines offering a full range of hot drinks at Spar’s Queen’s University store.

2. Brands are keeping up to date – Major brands such as Kenco Millicano, L’Or and Clipper are continuing to invest in their ranges, packaging and products in order to keep up with a fast-changing market.

Jacobs Douwe Egberts recently updated the packaging of its premium Kenco Millicano range across three blends – Original, Intense and Decaff. “We are proud to create quality product experiences to support our retail and wholesale partners,” says Roberto de Felice, marketing director at Jacobs Douwe Egberts.

L’Or, meanwhile, has updated its portfolio with three new products: L’Or Artiste, L’Or Instant Jar and L’Or Flavours Collection Aluminium Capsules, and Clipper has invested in new sustainable packaging.

3. Don’t forget chocolate – Behind the dominance of tea and coffee, it can be easy to forget that hot chocolate has become an increasingly essential part of the wider category.

Delivering strong year-on-year growth in the independent channel, Mondelez International’s extensive range includes Cadbury Hot Chocolate, Cadbury Instant, Cadbury Highlights, Cadbury Bournville Cocoa Powder, Fry’s Hot Chocolate, and premium brand Green & Black’s Cocoa and Hot Chocolate. The range taps into the drinking chocolate, instant chocolate and cocoa sub-categories which, Mondelez says, now achieves ongoing relevance to shoppers throughout the year. Cadbury is the UK’s number-one hot chocolate brand, growing at 8.7% year on year. l

TAKEAWAY POINTS