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Convenience, kettles and cappuccino to drive coffee consumption

14-May-2004

The British are the biggest consumers of instant coffee in Europe, driven by the desire for speed and convenience. But new research from Mintel shows that many of the new instant coffee products launched over the last year were not destined for the UK at all but for France and Germany, where ground coffee sales have always been much higher, writes Chris Jones.

Germany is still Europe's biggest market for ground coffee, with some 62 per cent of consumers there drinking nothing but that, according to Mintel. In contrast, just 3 per cent of British adults regularly drink ground coffee, while 44 per cent will opt for instant.

Yet German consumers have been introduced to a raft of new instant coffee products over the last year, more in fact than in the UK. So what has prompted manufacturers to target Europe's staunchest ground coffee consumers with instant products?

 

The answer lies in the current decline in the German coffee market. Between 1998 and 2003, coffee sales dropped 39 per cent from €4.2 billion to €2.6 billion, according to Mintel, with coffee suffering from much the same problem as the country's second most popular beverage, beer.

 

Both drinks are seen as unhealthy and unfashionable, particularly among younger consumers, and coffee manufacturers have been forced to reinvent their products to appeal to a new generation of consumers seeking beverages which are not only healthier but also offer a real point of difference with what went before.

 

For example, Kraft Foods, one of the biggest coffee suppliers in the German market, recently launched a range of instant cappuccino products under the Jacobs brand, co-branding with several well-known chocolate names (Milka, Toblerone and Daim) while Nestlé has also launched its own instant cappuccino product.

 

Oswald Nahrungsmittel, meanwhile, has launched a mocha-flavoured instant coffee drink which it claims can promote good health due to a rich beta-glucan, vitamins and minerals content. The drink is also said to help control cholesterol levels, strengthen the bone structure, support the digestive system and metabolism.

 

"It might seem odd that such stalwart ground coffee drinkers as the Germans can be persuaded to switch to these instant varieties, but the manufacturers have done their research well and have targeted the specific desires of their core audience," suggested Michelle Strutton, the Mintel analyst who compiled the research.

 

"The lower caffeine content of these products is one thing which appeals to the health-conscious younger generation," Strutton said. "The premium, indulgent positioning of these products is also designed to appeal specifically to this more demanding younger generation."

 

Consumers in France, too, are showing an increasing interest in these instant products. But Mintel's report shows that French coffee consumption continued to rise between 1998 and 2003, albeit only marginally, and French coffee drinkers appear to be less concerned by the health aspect as their German neighbours, suggesting that other factors are behind the rising popularity of instant products.

 

"It's difficult to gauge exactly what is driving consumers towards these instant products, but it is likely to be a combination of different reasons," said Strutton. "French consumers are certainly becoming more adventurous, more interested in different products - although they obviously retain a strong attachment to traditional culinary values as well. Convenience foods in particular have become much more popular there in recent years, and this has engendered a desire for ease of preparation."

 

An after dinner coffee in a restaurant is one thing, but laboriously preparing filter coffee during the day - whether at work or at home - is becoming less popular, Strutton suggested. Little more than a decade ago, a kettle was a rare find in a French kitchen - coffee was always prepared in a cafetière, while a saucepan of water sufficed for the occasional herbal tea. But times and tastes have changed, and kettles are now far more widespread, making it much easier for a quick cup of instant coffee.

 

Like the Germans, many of these instant products are cappuccino or mocha mixes, the latter in particular catering to French consumer demand for chocolate-flavoured products, said Strutton. "What is peculiar to the French market, however, is that consumers don't appear to thing of these instant products as coffee in the true sense of the word - they are perhaps more akin to hot chocolate."

 

For example, Kraft's Maxwell House instant cappuccino brand contains a sachet of Suchard-branded chocolate to sprinkle on top of the prepared drink, according to Mintel's Global New Product Database (GNPD).

 

Instant coffee product launches also featured prominently in the UK over the last year, but Strutton highlighted a distinct difference between Britain and its continental neighbours.

 

"Instant coffee already has a strong following in the UK, and you might think that ground coffee launches would be more likely, as producers try to persuade consumers to trade up. But trading up, in fact, tends to be to premium instant products, seen as a bridge between products such as Nescafé Gold Blend and the more sophisticated ground coffees."

 

Nestlé, for example, has a range of such premium blends, such as Alta Rica, Cap Colombie or Kenjara, purporting to offer the ease of instant coffee and the taste of ground coffee - a convenient stepping stone between the two categories.

 

"This kind of product has become increasingly popular with the rise of the coffee shop culture in the UK," Strutton suggested. "They allow consumers to get that Starbucks experience at home without the hassle of filters and cafetières."

 

This coffee shop culture - imported from the US and Italy - has also been the main reasoning behind recently launched products such as Nescafé Café Hazelnut and Takeone Chocolate Instantly Tia Maria, she said.

 

But the proliferation of Starbucks and Café Neros is not the only reason for the widening variety of coffee products. UK coffee consumption fell by 10 per cent between 1998 and 2003, and manufacturers are experimenting with new flavours and varieties in a bid to rekindle growth there.

 

"The British tend to be more adventurous than the French and, to a lesser extent the Germans, and the UK is often used as a test market for a new products, especially more convenient ones," Strutton said.

 

In fact, despite its reputation as nation of tea (or instant coffee) drinkers, Britain is a very sophisticated coffee market, with a far wider range of organic, Fairtrade/ethical, functional and convenient products, including self-heating instant coffees and coffees with added guarana for an additional energy kick.

 

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