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  • A Diverse Market with Plenty of Opportunities for Growth

    On 30 and 31 March 2011, Allegra Strategies hosted the UK Coffee Leader Summit at Millbank Tower in central London. This highly successful event was attended by 275 industry leading operators and suppliers from the UK branded and independent coffee shop, food-to-go and food-for-now sectors.

    Universally recognised was the fact that a diverse market is positive and although the market is competitive there are many opportunities for both large and small companies to excel. Competition from fast food and food retailers is on the increase.

    Darcy Willson-Rymer, managing director of Starbucks UK and Ireland said: Despite “a headwind in the economy” the industry must continue to “adapt, evolve and innovate”. He also urged suppliers and operators, both large and small to stay focused on working together as an industry to grow the market.

    Willson-Rymer was followed by Jim Slater, marketing director at Costa Coffee who spoke about channel management. Slater explained Costa’s expansion strategy is based on identifying customers’ needs, selecting the best channels, developing partnerships and earning trust. He said the company’s recent acquisition of Coffee Nation, the UK coffee vending company, and subsequent launch of Costa Express will make the brand more accessible to consumers and build on brand trust.

    The first session finished on a high note with Allegra Strategies managing director Jeffrey Young forecasting that the branded coffee shop market turnover is estimated to grow at a compound annual rate of 8.4% to reach £2.5 billion by the end of 2013.

    During the second session delegates heard from Mark Lilley, CEO and co-founder of food-for-now concept, Abokado; Steve Leighton, owner of Has Bean Coffee, a micro-roaster that sells coffee online; Vincent McKevitt, managing director of Tossed a healthy fast-casual concept that has recently decided to make in-roads into the coffee sector and Richard Reed, co-founder of Innocent, the smoothie company. All four presentations highlighted key challenges for emerging brands, which include, driving awareness and educating consumers, delivering quality, creating a brand experience and making money!

    In the final session of the Summit, David Rogers, sales and marketing director for Lavazza’s retail division spoke about “the capsule revolution” and how home coffee consumption is changing as tea and instant coffee consumption declines. Last year Lavazza sold 2 billion capsules worldwide and 20% year on year growth is anticipated this year. At the forefront of this revolution are the “urban cool” consumers aged between 26 and 45 and the “bright young things” aged between 26 and 35.

    Shelagh Ryan, founder of independent London-based outlet Lantana, spoke about what UK operators can learn from the highly evolved Australian coffee industry where the third wave independent operator is king. Like in Australia micro-roasteries, new brewing methods and special blends are gaining popularity, but Ryan warned UK operators against overwhelming consumers with too much choice. She emphasised independent operators need to differentiate themselves clearly and deliver the elusive combination of the best coffee and best experience.

    Michael Stiff, director, Stiff + Trevillion Architects picked up on the theme of the in-store experience and explained how to create the best possible environment. Stiff envisages more “de-branding of big brands” as operators strive to create unique, local environments with redundant buildings turned into heritage designed A3 venues.

    The final presentation of the day was from independent cafe operators, Vic Frankowski and Rob Dunne from Tapped & Packed who told delegates that every successful coffee business should be founded on three guiding principles: passion, pride and personality. They believe the industry cannot move forward until people see being a barista as a career rather than a fill-in job until something better comes along.

    The day concluded with drinks in the foyer where guests mingled and dissected how all these lessons could be applied to their businesses.

    The event was sponsored by United Coffee, Dawn Foods, Kellogg Company and Solo Cup Europe.
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