Coffee market growth despite increased focus on sustainability

mixed groupAny industry that uses or depends on disposables will have experienced a turbulent couple of years, mainly following the huge global focus on sustainability and single use plastics / disposables etc.  A lot of media attention has centered around franchised coffee chains as they’re a very visible user of disposable products, namely disposable paper coffee cups.

Various coffee chains, such as Boston Tea Party for example, have sought to ban single use paper cups from their business entirely. Others have vouched to replace traditional plastic lined paper cups with biodegradable or compostable options in order to tick that all-important environmentally aware box. We’ve also seen the rise of schemes designed to recycle the plastic lined paper cups using a specific process to separate the plastic content first.

Initially there was a lot of skepticism of such schemes, especially in relation to how they’d affect the core business, and in turn, profitability. In reality however the takeaway coffee industry has continued to flourish and indeed grow. The UK market has doubled in size (£bn) between 2010 and 2018 and is forcasted to grow at an average of 6.8% per annum for next 6 years.

Some industry leaders have actually commented on how aligning themselves with current environmental concerns and trends has actually been instrumental to their growth. Quite the opposite of what analysts originally predicted. Commercial valuations specialists Christie & Co recently published an interesting roundup of opinions of their blog at: https://www.christie.com/news-resources/blogs/june-2019/propel-coffee-conference-2019-highlights-innovatio/?viewmode=0

UK consumers drink 3.3kg of coffee per head / per year (2015), however this is still behind USA and developed European competitors (4.5 – 6.5kg). Market trends and buying patterns suggest that the coffee to go market will continue to grow, and that it will simply learn to adapt in terms of reliance on disposables. This will be either through new compostable coatings or better collection, sortation and recycling facilities.

 

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