The perfect blend

In 1999, there were around 6,000 coffee shops in the UK, but this number has now increased to over 26,000, with independents accounting for 28% of all stores.

Coffee chains such as Costa and Starbucks have expanded rapidly over the last twenty years, but with independents becoming increasingly relevant, are the big chains always the best choice for every location?

The big brands
Whilst Starbucks is the number one coffee brand worldwide, Costa currently dominates the UK market, with over 1,600 stores and 1,100 franchises, followed by Starbucks and Café Nero.

The big chains appeal to a wide audience – familiar products in every store, variety of options and sizes, seasonal drinks, loyalty schemes and food options. Many chains have leveraged on the convenience aspect of their business models by rolling out to travel hubs, retail parks and service operators such as hospitals and libraries, as well as a variety of formats, including drive-throughs, express (takeaway only) stores and even home delivery. By targeting the time-poor consumer with products they know and trust, this presents an opportunity for independents.

Role of independents
Coffee drinkers are now much more informed than they were twenty years ago and have increasingly mature palettes. They look for high quality and new types of beans as well as experiential aspects to their coffee drinking lifestyles. This has allowed independents to thrive, with increasing numbers of independent roasteries emerging: London has seen a 700% surge in independents since 2010. This has also been fuelled by the trend towards localism, with many independents sourcing their beans locally to meet consumer demand for local, sustainable products.

Many also differentiate themselves by providing more unique experiences, quirky décor and often the addition of high-quality food. Independents therefore appeal to more time-rich, quality seeking and sustainability conscious consumers who value this type of offer. This links to their typical locations within town and city centres, with very few currently located in the more convenience-focused locations such as travel hubs.

Some speciality coffee brands are beginning to penetrate the market on a wider scale: 200 Degrees (as seen above) is a speciality coffee roaster that has opened 15 stores around the UK, each offering a distinct, relaxing atmosphere where customers can enjoy their high quality, sustainable coffee. The new Glass Works development in Barnsley hosts 200 Degrees as the main coffee shop in the complex, reflecting these changes in consumer preferences.

Black Sheep Coffee is another independent speciality brand that has gained significant traction, with stores in over 40 UK locations, as well as France and The Philippines. The brand has multiple store formats, including coffee shop, express, coffee and cocktail stores, and recently has rolled out stores in multiple location types, including train and tube stations, showing the increasing demand for higher-quality coffee experiences in convenience locations.

Consumers' choices of coffee brand largely depend on time, quality, experience, and perceived value for money. Chain coffee shops will remain relevant for time-poor consumers who want a familiar product that they know and trust, therefore location of these stores in convenient areas such as travel hubs and retail parks will remain essential. Brand recognition is a key aspect of consumer behaviour, therefore chains located in town and city centres will continue to thrive. However, as the market matures and gains exposure to speciality brands such as 200 Degrees and Black Sheep, this threatens the future of chains in both central and convenience locations, as consumers are switching their preferences.

Planners need to recognise the importance of independents and changing consumer preferences when choosing coffee brands in different locations. There is an opportunity for independents to gain traction in the market by offering the quality and experience that chains cannot.

Emily Brown