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Over a quarter of consumers (28%) have stated that they are likely to spend more on hot drinks in the next 12 months according to data from CGA.
More than half (54%) say they are likely to pay extra for a better quality drink, a figure that rises even higher to 62% of adults aged 18 to 34.
There is a particularly strong appetite for trading up in coffee, where the quality of beans has become integral to marketing campaigns.
According to CGA, while some consumers will be happy to upgrade, many will be seeking increased value.
Andy Hodgson, CGA by NIQ’s senior business development manager, said: “Hot beverages are an increasingly valuable part of On Premise drinks menus and they can unlock incremental sales in new dayparts.
“But with competition so fierce and consumers more knowledgeable about their drinks than ever, it’s crucial to understand exactly where, when and why these drinks are bought. With spending likely to fluctuate widely between premium and value offerings, crafting the right ranges and hitting the pricing sweet spots will be the keys to success in 2024.”
