There are few appliances which better reflect the recent lifestyle changes in British society than the booming market of coffee makers. In just over a decade the British, especially the urban dwellers, have made a transition from quiet and private tea drinkers to the café society.
“Growth in coffee consumption and the café culture in Britain is being driven largely by the boom in high street coffee franchises, with the number of branded outlets increasing from 778 in 1997 to 2,428 in 2005 (source: The UK Café Report). Coffee chains, such as Starbucks, Costa and Café Nero, have increased consumer expectations of quality coffee and how it is made,” comments Giovanni Toffano, marketing manager, De’Longhi UK.
The burgeoning café culture is reflected in the sales of coffee machines which almost doubled over the last five years: from 520 thousand in 2001 to 1 million in 2007. However, this is a small decline of 8.5% on 2006 – a trend which requires careful interpretation. Nevertheless the value of the total coffee makers market is £48 million, with a growth of 1.8% on the previous year. Percolators and mocha machines have grown in volume and value over the last year, while espresso machines have increased in value only. The espresso machine market is worth £22.8 million (47% of the total coffee market) which is a significant growth of 20% year on year (see the graph on page 24).
Matthew Timms, senior account manager at GfK, describes the market performance: “With 46% of all coffee makers purchased last year being pod/capsule machines, the consumers’ expectations are clear. Speed and ease of use are at the forefront of their minds. Coffee machines are also one of the most successful kitchen appliances on line, contributing over 11% in value of all machines in the UK this June. The price points achievable from coffee makers suit the independent retailer well, as over 70% of machines sold were over £40 in the period July 06 to June 07. Significant growth has been seen from £60-80, and great opportunities exist over £250, where the growth rate has reached 19%.”
De’Longhi’s Giovanni Toffano adds another perspective: “While the sales of coffee machines and retail coffee are increasing, consumption of fresh, ground coffee is still much lower in the UK than in the rest of Europe which indicates there is still plenty of growth left in this market.”
The choice is wide
As people get accustomed to good quality coffee, an increasing number of them strive to recreate the café experience at home. The choice of coffee makers is wide (see the box beside). Freestanding machines still dominate the market, and first time buyers unsure of the technology and machine maintenance often opt for cheaper products. “Morphy Richards has enjoyed great success with Mister Cappuccino, its entry price range (RRP £35-60). They feature an easy to use and clean heated milk frother, an integral stainless steel milk jug and a heated thermostatic plate,” explains Zoe Porter, breakfast category manager at Morphy Richards.
A product with a difference in the freestanding category is the Bosch Private Collection coffee maker – Britain’s first coffee machine with a built-in Brita maxtra water filter, says the manufacturer. It removes metals, pesticides and other impurities which are present in hard water which affect the taste of the coffee.
However, in newly built or re-furbished kitchens integrated coffee makers are becoming more common. “The integrated coffee machine is an aspirational product aimed at a premium audience and will never become a standard necessity. However, for those retailers and designers who are selling the dream of a luxury built-in kitchen, the integrated coffee machine represents a fantastic opportunity to be able to add one niche appliance to the overall layout that will set the entire kitchen apart from the rest. It looks fantastic, saves space on the work surface and adds real ‘wow factor’,” explains Richard Walker, sales and marketing director at FagorBrandt UK.
Many of them not only produce professional results but also cater for particular preferences of the owner. For example “Miele’s CVA4080/85 machines use fresh coffee beans to create the perfect cup. The state of the art Navitronic controls allow the user to adjust the coffee strength by varying the water quantity and the amount of beans used; even the coarseness of the grind is adjustable. It’s even possible to store up to ten personalised profiles so that every member of the family can have their own perfect cup of coffee” says Neil Pooley, Miele group product manger.
Generally, customers buying a coffee machine are looking for simplicity – a fuss-free machine which is easy to maintain, produces a great tasting cup, has a good price/quality relationship and a sleek design, confirms Tanja Wieringa, customer marketing manager, Food and Beverage, at Philips.
For a growing number of coffee aficionados a coffee machine is a significant lifestyle statement. Since 25% of Brits entertain at least twice a month at home (according to a Electrolux survey) and the coffee maker is constantly on display, it has to look good and complement the style of the kitchen. Hence coffee makers are available in a variety of colours and materials (Nespresso Essenza models are even covered in Swarovski crystals). Digital displays which consumers appreciate for their simplicity are becoming more common at the top end of the market.
“Research shows that the key purchase drivers for consumers are design and brand over price. For coffee consumers, brands are paramount and they tend to look for a brand that possesses authenticity and provenance that is also stylish. Italian brands like De’Longhi are seen as credible in the eyes of the consumers as they feel that these brands will make reliable and authentic coffee,” confirms Giovanni Toffano, at De’Longhi UK.
“Price is important and very competitive at entry level, but less so with more expensive machines,“ adds Siemens product category manager Florian Pfister.
Growing interest in coffee and coffee makers has led to a number of technological innovations in the category. The most important of them are the development of single-serving capsules and pod coffee machines, fully automatic bean-to-cup machines and twin heating systems for coffee and milk frothing.
Capsule coffee machines guarantee freshness as they are sealed and they help consumers save time as the coffee does not have to be ground, while bean-to-cup machines are the real transition of professional café to the domestic environment. Bean-to-cup machines have built-in grinders to grind beans for every cup, and produce consistently perfect espresso.
Traditionally domestic machines had only one heating system, but increasingly consumers expected coffee of a professional standard. The fastest way of delivering the perfect temperature is with two heaters. The coffee is made at between 86-92 degrees and steam for frothing at up to 140 degrees. Rather than waiting for the heating system to heat up (for steam) or cool down (for coffee), the answer is two separate heating systems.
Sales of coffee machines in the UK are expected to grow by an average annual rate of 16% between 2003 and 2008 according to Euromonitor International. “The market will remain buoyant, though expect sales of the pod coffee makers to decline as pods become more difficult to access. Pod machines were a real success story between 2002 and 2006,” commented Amanda Hinde, product manger for Russell Hobbs.
Some market analysts say that this market is moving towards cheaper machines at one end and premium, designer models at the other. However, Alex Meir, senior product manger at Group SEB disagrees with this view: “I do not believe that the market will polarise. Rather as the coffee culture continues to grow in the UK, consumers will be willing to pay more for good quality coffee machines that will provide them with great tasting coffee.”
In the meantime leading manufacturers are preparing various promotional initiatives for the autumn. Nespresso will be launching a print campaign featuring George Clooney and will run a cash-back £30 off any Nespresso machine in-store promotion. Krups will be supporting the Nescafe Dolce Gusto with a £5 million national TV campaign in the run up to Christmas. De’Longhi has partnered with Macmillan Cancer Support to host the first ever Macmillan De’Longhi Coffee Art Auction on 8 November, which is expected to be a high profile event.
Selling lifestyle – sales tips
It is essential to display at least one model in each category of coffee makers in order to capture consumer interest and to demonstrate their features and benefits.
Ask your customer what kind of coffee they wish to make with the machine (filter, espresso or cappuccino). How much are they looking to spend? It would also be advantageous to learn about the different coffees as well as the machines to impress the customer with informed advice.
“Showing a potential customer how easy they are to use is almost guaranteed to have them adding a coffee machine to their wish-list. Allowing a customer to ‘play’ with the machine in the showroom will have them hooked!”, advises Neil Pooley, group product manger at Miele.
Having a working machine on the shop floor, with coffee aroma waffling around the room, could be the most powerful selling tool of all.