New Black Coffee CEO David McCarthy explains why the average coffee consumer is demanding more from their cup of Joe - and why they are going to get it.
Coffee is booming. You only have to look around to see that; especially if you’re in central London where there’s a good chance you’re within arm’s reach of one sort of coffee seller or another.
This isn’t an accident. Some very clever business people have spotted a high margin, rapidly growing business. Our appetite for coffee is so vast that the UK’s Coffee Shop market is forecast to be worth nearly £5billion by 2022 (From £2.3bn GBP in 2008).
The widely accepted metric that the market doubles every 10 years seems about right. With margins at some of the highest in the whole retail market, there’s plenty of profit to attract yet more investment and yet more expansion.
However, I think the consumer might have something to say about that. We’re an educated and protected bunch, with a host of consumer focused legislation at our finger tips and eclectic and refined tastes developing across the whole consumer product range.
We demand more. More quality, more choice, more responsibility and more deals. In short we want more for less and we’re getting it.
The standards in your high street coffee purveyor are increasing (does anyone even remember instant coffee?). The competition is increasing too. More locations, more styles, more unique and “individual” takes on the coffee shop.
Some offer food, some offer tunes, some offer desk space, some even offer networking opportunities. However I think there are some clouds on the horizon.
As we approach saturation levels and competition increases, then I fear that consolidation and margin pressure is an inevitability. Industry wide the race is on to produce the best possible quality for the least possible price, and to deliver it with the biggest beardy smile.
It can’t last. Revolutionary concepts like ours, and some others (which I won’t shine a light on) are disrupting the way the affluent and educated consumer gets his chosen caffeine hit.
The model, like so much in retail, is evolving and the average old-fashioned coffee shop is going to find that unless they revolutionise their concept and rapidly revamp they are going to be left behind in the race for coffee conquest.
Clearly the industry leaders that are evangelising the speciality coffee movement, from third to fifth wave, are going to be leading the conversation and probably earning the most important commodity a consumer can bestow on a brand; loyalty and trust.
Changing a consumer’s habits to include your offering is the nirvana every F&B outlet dreams of. It’s why even though we may not like the food or the coffee, McDonalds, Pret, Eat and others get our custom because we’re familiar with their product and we know it’s consistent.
My hope is that people are learning that a passion for quality, a love for the business and fearlessness about innovation are worth supporting and taking a risk on.
David McCarthy is CEO of The New Black Coffee, 10 Philpot Lane EC3M 8AA ww.thenewblack.coffee/