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Allegra reports on 'burgeoning' iced drinks sector as UK sales hit £370m

  • by Allegra World Coffee Portal
  • 03 Jul, 2018

Iced drinks sales across the £6.4bn specialised coffee shop sector reached £370m in 2017 and are set to grow by 18% in 2018, according to the latest report from the Allegra World Coffee Portal’s study on the UK’s ‘burgeoning’ iced and blended drinks market.

And while the warm weather “continues to be the catalyst” for the consumption of iced drinks, Millennials and Generation Z “could hold the key to sustained year-round growth”, said Allegra in its ‘2018 Project Iced Beverages’ report.

Project Iced UK 2018, Allegra World Coffee Portal’s “definitive report on the UK’s out-of-home iced beverages market”, forecasts iced beverage sales to exceed £421m in 2018, representing year-on-year growth of 14%.

Sustained growth in the iced beverage segment is expected over the next five years, with the total sector expected to value £660m by 2022.

Bradley Journeaux, research manager at Allegra World Coffee Portal, said: “Iced beverages represent a major opportunity for coffee shops, with younger consumers in particular engaged with the wide selection of highly customisable and visually appealing drinks on offer.

“Innovation in brewing methods has forged entirely new product lines, such as cold brew and nitrogen infused coffee, which are starting to build market share. The potential is there for iced beverages to overcome the traditional British weather barrier and really become established as an all-year round mainstay.”

Indicating long-term potential for UK consumption to emulate popularity in the US, the report showed that 60% of industry leaders believe iced beverages are becoming increasingly popular year-round.

Millennials and Generation Z will drive future segment sales growth, with iced beverages representing significant opportunities to introduce younger consumers to the coffee shop market.

Allegra continued: “Instagrammable products, such freak shakes, iced coffee martinis and the Guinness-like cascade effect of nitro cold brew all appeal to a younger, more adventurous demographic.

“With their low sugar and calorie content, cold brew and nitro also represent significant opportunities for younger, health-conscious consumer spend.”

More than two-thirds of under 30s surveyed by Allegra said healthier options would encourage them to increase iced beverage consumption.

Allegra research also shows those under-30s are more likely to view iced beverages as good value for money and consume them year-round. These factors make younger consumers a key demographic for coffee shops expanding their iced offerings.

Last month, Mintel research also showed the iced coffee boom as presenting strong potential among younger drinkers. The Mintel Global New Products Database (GNPD) reported that 66% of UK 18-24-year-olds say that chilled coffee is a good alternative to sugary drinks.

The UK Ice Forecast

It concluded by saying: “The future of iced beverage sales is positive, with Allegra research revealing more than half of industry leaders believe consumers are more likely to purchase iced beverages out-of-home than 12 months ago.”

Furthermore, it reports that more than half of industry leaders (52%) expect cold brew to become a coffee shop staple within the next three years.

In the longer-term, operators remain optimistic for the potential of the UK iced beverage market to mirror the US, where iced beverage consumption remains strong year-round.

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