Emerging coffee brands in the Horizons’ survey have shown a 132% growth rate over the past 12 months in terms of outlet numbers.
Chains such as Harris + Hoole’s, which has gone from one to 10 outlets, typify this growth market as does Gregg’s Moment (with five outlets) and Lavazza Expression, which currently has three outlets with plans for over 50 sites in greater London over the next three years.
SOHO Coffee has grown from 16 outlets in 2012 to 20 in 2013, while Taylor Street Baristas (nine outlets) is also the ‘Ones to Watch’ list.
“In many ways coffee shops have benefitted from the economic downturn,” commented report author Nicola Knight, Horizons’ director of services. “Buying a coffee and a snack is a way of treating yourself relatively cheaply and as consumers have become more discerning about their coffee the artisan and specialist outlets offer something over and above that of the well-known chains.”
Ones to Watch identifies those brands likely to become high street names of the future, but which currently have between five and 25 outlets and have shown at least a 20% growth over the past three years combined.
Healthy quick service (with sit-down or takeaway options and where you pay when you order) is another growth area with brands like sandwich bar operator Abokado, which now has 13 outlets making it one of the fastest growing Ones to Watch brands. Owned by Kings Park Capital, Abokado aims to have 24 outlets by the end of 2013.
Typifying the relatively new genre of healthy takeaway outlet is Planet Organic (now with five outlets) and Pod (23). Both appeal to health-conscious consumers looking for a nutritious and healthy on-the-go meal and an alternative to existing quick service chains.
Pod, which opened the most new sites of all Horizons’ Ones to Watch brands this year, claims the healthy fast food market is starting to heat up as sandwich and coffee chains catch on to an increased awareness of healthy food. The London-based chain increased its estate with the purchase of Café Mana in 2012 and has plans to reach 30 outlets this year, including three in London.
While the majority of healthy quick service Ones to Watch brands are in London, they are likely to move outside the capital if their success continues. Tossed, which has gone from eight to 10 outlets over the past 12 months has started that move by opening at Bluewater shopping mall in Kent.
Growth can also be seen by the casual dining brands such as Bill’s and Leon. Leon is actively targeting the opportunities offered by shopping centres and transport hubs and already has sites in Brent Cross, Bluewater, Kings Cross and Heathrow. With 13 sites, the chain is looking to add another 10 by 2016. Likewise, Bill’s has expressed its intention for growth since billionaire entrepreneur Richard Caring acquired the concept in 2010, adding 13 outlets and planning a further 12 this year.
Artisan bakeries are making headway on our high streets, offering high quality coffee along with artisan bakery, patisserie or deli items. Benugo is typical of this genre, currently with 10 sites and an aim to double its estate this year mainly in central London with a focus on transport hubs. Likewise, patisserie café chain Apostrophe, currently with 21 sites, has another three planned before the end of March, with a long-term target of 50.
Ones to Watch has this time identified a growing trend for ‘diffusion’ brands, where well-known operators launch an alternative format, trading heavily on the success of the original brand but adapting it for different sites. Examples include Chimi’s Burrito Bar, a burrito version of the fast-growing Chimchanga Mexican brand; Ping Pong Now, a version of Ping Pong aimed at transport hubs; The Real Greek, which is looking to trial smaller units or kiosks; and Wildwood Kitchen, a stripped back format of Wildwood with a simplified menu.
“These diffusion brands are often targeted to particular audiences or locations, such as transport hubs or mobile units,” said Knight.
“They are a great way of reaching a particular audience and of making the most of smaller sites. I think we will see more of these in the future as they are versatile, relatively cheap to operate and don’t incur the massive start-up costs of opening a larger outlet,” she said.