Is coffee a threat or an opportunity to Britain’s pubs? Matt Crompton, writing in the CGA Strategy blog, discusses the issue and comes to a positive conclusion…
If people are becoming more health-conscious and drinking less alcohol and there is now another outlet for social gatherings around a drinking occasion, surely the pub can only suffer?
This may be true, but to many – particularly the growingly sophisticated managed operators – coffee is a very lucrative opportunity and when used correctly alongside an appropriate food offer, it can also be very profitable.
235 cups of coffee a week – and growing
The average UK Food Pub now serves 235 cups of coffee a week and every region in the UK except one is seeing Coffee in YoY growth in pubs. The fact that the only region not in growth is London is perhaps a bit of a red herring. Coffee in London pubs is already a much more developed market compared to the rest of the country and the competition from the high street in the capital is that much greater than elsewhere.
Coffee fits in with many of the new openings seen within the on-trade over the past few years. Outlets have changed significantly and with dwell time initiatives such as Wi-Fi becoming the norm, longer-lasting serves match perfectly with this.
Premiumisation
Premiumisation has been a big factor driving value growth across many different wet categories in the on-trade. In the Lager category, in particular, a clear pricing ladder has been established catering for all wallet sizes and allowing consumers the opportunity to carry out a treat spend if they fancy splashing out.
Coffee follows the same ladder: for a Standard Lager see an Americano, for a Premium Lager you have a Cappuccino, and for a World Lager look no further than a Caramel Macchiato.
Pubs vs Coffee Shops
For pubs to continue enticing customers through their doors at the expense of Coffee shops there are three key benefits of the pub which need to be highlighted and built upon.
Location is key with site physiology playing a huge role: pubs have occupied prime spots for decades whilst Coffee shops will find it more and more difficult to secure prime, new sites.
The hours that a pub are open for is also a clear bonus for pubs: where most Coffee shops will shut at 5, pubs can carry on trading a lot later than this.
The last key benefit is the facilities that some pubs can offer: many pubs are suitable for families and have great Beer gardens with climbing frames, swings etc. which simply wouldn’t be found in a Coffee shop.
So the advantages are clearly there for Coffee drinkers to choose pubs over Coffee chains, and as the country’s pubs and bars continue to change and adapt their offer hopefully the thought of a comforting Coffee break in familiar, relaxing surroundings will help continue to boost footfall into our pubs.
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