COFFEE SHOP CONCEPT

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Double Celebrations at Costa this National Day

• The UAE and the coffee company both celebrate 40 years of success
• 40th Birthday offer – 40 per cent off coffee and muffin on Friday 2nd December

Double celebrations and double espressos are in order next week, as the UAE and Costa Coffee both celebrate 40 successful years. The United Arab Emirates will reach its landmark 40th anniversary as a nation on Friday 2nd December, 2011, and Costa too is celebrating its fourth decade in business this year.

In 1971, the historic decision was made to unify the Emirates. It was also in 1971 that Italian brothers Sergio and Bruno Costa opened their wholesale coffee business in London, and Costa was born. Eric Hughes, General Manager, Costa Coffee UAE, says: “We want to express our pride and heartfelt congratulations to the leadership and people of the UAE on 40 amazing years as a nation. For all of us at Costa, the UAE has a very special place in our hearts. In 1999, we opened the first international Costa outlet here in Dubai, and its success has spurred our development globally. Today we have more than 80 Costa stores across the UAE and globally more than 2,000 stores in 25 nations. It’s been an amazing 40 years.
“If we hadn’t been so warmly welcomed by our customers in the UAE, I feel it is unlikely that we would have had the confidence to grow and develop the global brand so many people know and love today. We look forward to celebrating the spirit and success of the nation, and Costa, for many years to come. “

To celebrate National Day, Costa Coffee will be offering all of its customers 40 per cent off a medio coffee and muffin on Friday 2nd December. “It’s a little something to mark two celebrations that we thought our customers would appreciate,” says Hughes.

In 1978, Costa opened its first coffee shop in London, and in 1995, the company was acquired by Whitbread, the UK-headquartered hospitality company. Costa opened its first international store in the UAE in 1999 with its franchise partner Emirates Leisure Retail, a subsidiary of the Emirates Group. By the year 2000, Costa was selling 3.7 million cups of coffee each week, and by 2006, the latte began to outsell the cappuccino for the first time in the brand’s history. In 2009, Costa insured the tongue of its Italian Master of Coffee, Gennaro Pelliccia for £10 million (AED57.2m). Today, Costa operates 80 stores in the UAE and more than 2,000 globally.

With an additional 300 outlets opening worldwide over the next year, Costa is a market leading brand. Capturing the attention of critics around the world, Costa was recently awarded Marketing Society’s “Global Award” – beating global mega brands Yahoo, Honda and Nokia to the top prize. Additionally, Costa was named Marketing Week’s “Brand of the Year” on May 25th – placing Costa in the company of recent winners Tesco, O2 and Innocent, along with earning the prestigious Rainforest Alliance “Sustainable Standard-Setter” prize, where it joined Kraft on the winners’ podium.

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Coffee shop revolution continues to stimulate the high street

The UK already has 15,000 coffee outlets and is about to get thousands more thanks to our increasingly sophisticated taste

• Friday 22 June 2012 17.19 BST

Coffee shops are continuing to thrive on the high street as consumers become more interested in the origins of their drink. Photograph: Sarah Lee for the Guardian

If the Queen ever feels like popping out for a flat white or caramel frappucino she has plenty of options close to home. There are 21 coffee shops along the short stretch of Buckingham Palace Road between the palace and Victoria coach station.

The phenomenon is not unique to the Queen's neighbourhood – coffee shops are taking over high streets up and down country. Holloway Road, north London, boasts the most at 24, followed by 23 along Gloucester Road, Bristol, according to the Local Data Company.

There are more than 5,000 branded coffee shops in town centres, retail parks, railway stations, airports and even drive-thrus along motorways across the UK, and last year they served up £2bn of coffee – double the sales recorded in 2005. Add in the independently owned coffee shops – another 5,500 – and the near 5,000 that have rapidly sprung up in outlets from corner shops to Wetherspoons pubs, and there are already well over 15,000 places to find a caffeine fix.

And experts say the march of the coffee cups is far from over. Jeffrey Young, managing director of coffee analysis firm Allegra Strategies, predicts there will be more than 7,000 branded coffee shops within the next few years and nearly 18,000 outlets including independent and non-specialist shops. The 12 pubs a week that are closing are being more than offset by coffee shop openings.

The coffee revolution began when Italian brothers Sergio and Bruno Costa opened their first shop on Vauxhall Bridge Road (a stone's throw from Buckingham Palace) in 1978. Costa is now by far the biggest player in the market with almost 1,400 UK stores serving 450,000 coffees a day.

Andy Harrison, chief executive of Whitbread, the FTSE 100 company that bought Costa from the brothers for £20m in 1995, this week announced plans to add another 350 stores, creating 3,500 jobs, by March 2013. Even then Harrison won't be satisfied. He reckons there is the "potential to get to 2,000" in the next few years. To achieve this, Harrison says, many of the shops will be within spitting distance of each other. "People really don't want to walk very far for a coffee," he says. "We can have them a couple of hundred yards apart on a really busy high street, then another at a retail park and another at the station."

Despite the UK falling into a double-dip recession, consumers are increasingly prepared to pay £2.50 or more for a cup of coffee. In the 13 weeks to the end of May, Costa's like-for-like sales jumped 8.4%. Last year Costa's profits rose 38% to £70m.

Harrison said this has been achieved by giving coffee a classless consumer appeal. "The customer profile has massively expanded .There was a time when this was a habit of the middle classes, but now it is a mainstream activity. It has become part of people's daily lives." Harrison's own preference is for cappuccinos "with lots of chocolate sprinkles".

Research by Allegra Strategies found that 16% of the population shun the coffee shop lifestyle. "It's amazing how things have changed over such a short period," Young says. "When we published our first report in 1999 people were saying the market was already saturated with 700 branded coffee shops – now there are 5,000 and we are forecasting there will be 7,000 in the next few years."

As with wine, upmarket coffee consumers are increasingly snobby about the origins and preparation of their brew. "People know their beans more and more. There is a huge and growing knowledge and interest in the provenance of the bean, where and how it has been roasted, whether it has been washed or not, which sort of machine it has been ground on."

Despite the expansion of coffee chains, the independents are growing strongly too, largely owing to this snobbery. On Saturdays, queues regularly extend out the door, down the road and round the corner at Monmouth Coffee in Borough Market, near London Bridge. Monmouth, which began roasting coffee at its tiny shop in Covent Garden, London, in 1978, allows customers to taste a handful of single estate coffees before buying. "We travel extensively throughout the year, visiting the producers and cooperatives with whom we currently work and looking for interesting varietals of coffee and new farms from which to buy," says the leaflet handed out with every purchase.

One of the strugglers in the British coffee market has been US group Starbucks, which has consistently failed to turn a profit in Britain. Run in the UK by Kris Engskov, a former aide to President Clinton, the chain is undergoing a radical image overhaul to make it appear more British. It has stripped back its garish logo, doubled the strength of espresso-based drinks and begun to ask customers their names when they order. Sales jumped by 9% the week after the change this year.

But it's not just the coffee itself that has changed. The word barista is in growing usage for the counter staff (Britain boasts two world champions) serving a range of coffee from flat white (an antipodean version of the latte in which the steamed milk is served from the bottom of the jug) to cortado (an espresso cut with a small amount of warm milk to reduce the acidity). According to Starbucks the average barista is aged 24 and works 30 hours a week.

"It's similar to when cooks became chefs; you don't eversee people call anyone a cook any more," Young says. "They [baristas] are highly trained. People used to just work in a coffee shop and do everything from wiping the floors to cashing up. Now they aspire to be a dedicated barista. Careers in coffee are now a reality."

Coffee table

Name Outlets Mkt share

Costa Coffee 1,342 40.4%

Starbucks 743 30.7%

Caffè Nero 490 14.0%

AMT Coffee 65 1.7%

Caffè Ritazza 55 1.4%

Café Thorntons 37 0.9%

Esquires 35 0.8%

Coffee Republic 29 0.6%

The total of branded coffee shops soared from 748 in 1999 to 5,246 by Dec 2012. There were 4,831 non-specialist outlets at Dec 2012, up from only 522 in 1999.

But in 1999 there were already 4,100 independents, up to 5633 by Dec 2012.