Word on the street, is that UK coffee shops continue to have plenty to celebrate after 20 consecutive years of market growth with a staggering 81% of people now enjoying a weekly visit to a coffee shop. That tots up to an annual spend of over £9.6 billion!

Consumer reasons for choosing which coffee shop to visit have remained constant. The top 4 are (i) convenient location (ii) coffee quality (iii) frequency and habit (iv) loyalty scheme – and when it comes to the overall experience, our expectations have never been higher.

With more and more entrants coming into the market all the time, consumers can now enjoy speciality and premium coffee in over 24,000 coffee shops in the UK.

With coffee so much part of day to day life, expectations are coffee will be available in every moment of life. Whether shopping, travelling, socialising or relaxing; whether espresso ‘pick me up’ at the start of the day or a decaf ‘warm down’ at the end of the day – consumers expect quality, premium coffee to be available – everyday, everywhere. In a hotel lobby, a café, a pub or a rail station; barista served or self service; bean to cup or freshly ground vending – the ubiquity of coffee coupled with expectation for quality suggests the opportunity for growth remains strong.

However, whilst growth is continuing, social and economic dynamics are likely to slow this in the medium term. Growing social awareness of issues surrounding single-use plastic and disposable cups (which includes polyethylene-lined disposable coffee cups) will become a commercial question for coffee shops and coffee retailers.

With the government set to introduce a 25p “latte levy” on disposable coffee cups, and for all coffee cups to be recycled by 2023, coffee brands and coffee shops will need to think beyond the marketing opportunity to sell re-useable cups to brand loyal customers.

Facts around use of disposable coffee cups:

• The UK throws away 2.5 billion disposable coffee cups every year
• Less than 1% of coffee cups are recycled
• Half a million cups are littered every day
• Packaging producers only pay for 10 per cent of the cost of packaging disposal and recycling

Equally, whilst consumers are becoming more sophisticated, squeezed incomes and economic uncertainty could create a change in consumer habits. With a huge amount of choice now available – from the big chains through to artisan deli’s – consumers are considering where to spend their money. For an ‘on the go’ coffee, consumers are choosing the likes of Greggs, Pret and increasingly McDonalds. Conversely, to justify spending more, people want to experience more – good news for the independents and the disruptors, who are bucking the trends and selling an experience, not just the coffee.

Top 3 tips to grow your coffee business

 

All of this said, it’s safe to say, coffee isn’t likely to fall out of style anytime soon. As long as there are coffee beans grown, there will be coffee shop customers – and with growth still on the horizon, there are a number of ways that independent coffee shops can improve their offer and their returns.

Here are my top 3 tips to grow your coffee business:

Tip Number 1: Always, always – focus on quality

 

It should go without saying, in a competitive space like the coffee business, you must be consistently serving the best coffee and espresso.

This means investing in the right equipment and using the highest quality coffee beans and products. People go out of their way for great coffee and if you are one of five coffee shops in your vicinity, you can’t afford to skimp.

And tell people why your coffee is unique

If you’re sourcing coffee from a particular farm or plantation that uses sustainable growing techniques; if you’re serving Fair Trade or Rainforest Alliance coffee – or if there’s something else that makes you stand out from your competitors, make sure you’re telling people about it. Provenance and origin is so important to consumers.

Educate your staff and baristas so they can easily reinforce what makes your drinks unique when they interact with customers, and also share that kind of information on your website. It will help make your shop more memorable.

Make sure you hire the right people

Quality also means hiring the right people to work in your coffee shop. This can be the difference between success and failure.

Although it can be tempting to hire the cheapest help, in the long run, you must ensure that your front line is positioned to promote repeat business and growth by word of mouth. Your employees are your customer service force, and you need a top-notch team.

Tip Number 2: Start a loyalty or rewards program

 

Smaller businesses often shy away from this because they think it will lose money. But according to research, over 65% of small businesses that started a loyalty program said their business generated more money than it cost them to run it.

You’ll profit more from repeat customers

If your product quality is where it should be, then you need to start looking to other differentiators to help you stand out from the competition. The same study also found that repeat customers spend 67 percent more on purchases than first-time customers. No matter how you look at it, you can only stand to benefit by offering customer loyalty incentives.

Tip Number 3. Understand that you’re selling more than coffee

 

While quality is the top priority, it’s also important to understand that you’re selling more than coffee. If it were as simple as a need for caffeine then everyone would buy their own Italian espresso machine and make their daily cup at home.

We know the reasons consumers choose where to enjoy their coffees – but we need to remember to get to know their why. There are many reasons – from needing to escape the office, to meet friends (or just be with other people) and increasingly, as a place to set up their mobile office. Understand your customers and get to know their ‘why’ – so you can personalise the offering – and capitalise on the opportunity, by encouraging them to visit, visit more often and stay longer.

A word on the mobile office workers….
While you’re certainly going to offer free Wi-Fi at your café, if you want the mobile workers to stay around – make sure you have plenty of access to power sockets. It’s a great way to encourage people to set up their own little workspace and spend the bulk of the day ‘plugged in’. Just make sure they don’t sit most of the day with their empty £4 cup on the table next to them!

And remember – “free” amenities are costing you money, and if non-paying or low-paying customers take advantage, it can create a difficult situation. On the other hand, if you don’t offer them, you might lose business. Getting the balance right means knowing your customer and understanding their ‘why’.

Finally, help people relax and have fun

You’re in hospitality! Think about our basic human desire to connect with others – and think about how you can create a social and fun environment. Perhaps consider having board games, puzzles, or other interactive activities available in your coffee shop. Coffee is more than a drink people love – it’s a reason for people to come together and connect. Understanding the different types of customer and their ‘why’ will help guide you in everything from menu to pricing to environment and experience – and will undoubtedly increase your chances of success and consistent growth.

Remember, coffee shops offer many unique opportunities and there is growth in the sector. Following the tips above will help you consider the challenges and respond to them. And if you need help selecting the best coffee or equipment for your business, visit our website or pick up the phone and Talk to Tony.