17 July 2019

UK roasters gearing up for growth amid strong market demand

The Roasters Report UK 2019, World Coffee Portal’s first dedicated analysis and directory of UK roasters, reveals a rapidly developing market driven by strong wholesale demand from independent cafés, the rise of locally roasted coffee and growing consumer appetite for café roastery experiences

Over 430 roasteries are currently in operation in the UK

Despite an incredibly competitive retail landscape, rising demand for high-quality roasted coffee has sustained growth across the UK roaster segment, particularly as the coffee shop market continues to expand. More than half of roasters surveyed (65%) regard current trading conditions as positive.

Indicating the market is poised for a new phase of development, nearly 50% of UK roasters surveyed are planning operational expansion. Nearly half (44%) are operating at below 50% capacity, with just 5% currently at maximum capacity.
 

Consumers favour locally roasted coffee and in-store experiences

A growing consumer trend for locally roasted coffee has contributed to a broad regional distribution of roasters in the UK, which are now present in virtually every major town and city. This dynamic supports a symbiosis between independent coffee shops and proximate roasters, with 44% of industry leaders surveyed anticipating the biggest growth channel for wholesale distribution will be independent cafés, followed by workplaces and contract catering.

The emergence of café roastery concepts marks another segment development. These retail concepts are an effective strategy to capitalise on growing appetite for coffee experiences by bringing curious and increasingly savvy consumers into direct contact with the roasting process.


Increasing competition leaves some roasters feeling the heat

A buoyant UK roasting segment continues to attract new market entrants, with an influx of new roasters seeking to disrupt the influence of established brands. Industry leaders identified competition from other roasters as the biggest market challenge currently, with nearly half (49%) perceiving an oversupply of roasters compared to consumer demand. This dynamic has also driven M&A and investment activity within the UK roaster segment, such as Ozone Coffee Roaster’s acquisition of fellow specialty roaster, Has Bean, and roastery expansion at London-based Caravan Coffee Roasters and Grind.

The cost of property was the second most cited concern among UK roasters surveyed, indicating the segment could still be susceptible to tough high street trading. As saturation makes the roastery market less hospitable, smaller inexperienced businesses are most at risk of being outcompeted by scaled rivals.
 

Coffee from emerging origins tipped as the major industry trend for the coming year

UK roasters indicate coffee from emerging origins will be a core focus over the next 12 months, with less familiar varieties from Rwanda, Myanmar and China growing in popularity. Strong wholesale demand from independent cafés, which often specialise in small-batch single origin coffee, reinforces this trend, as does heightened consumer consideration of coffee provenance.

An increase in sustainability initiatives also polled highly among roasters surveyed, followed by direct trade, with 62% currently operating an ethical or direct trade policy. However, while 88% of roasters indicate willingness to pay more for ethically sourced coffee, only 60% believe consumers are prepared to pay the same premium. This indicates more work is needed to educate UK customers on the social value of ethically sourced coffee.



The Roasters Report is World Coffee Portal's inaugural analysis on the UK's flourishing coffee roasting segment. Our study features a complete directory of the 400+ UK roasteries, including profiles, leader interviews and key operations insight.​
 
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