Tea & coffee focus: The new beer?

There's one seemingly on every town or city centre corner, and their garish signs are as dominant as any on the high street. However, Starbucks, Costa Coffee and their ilk are increasingly being challenged by pubs that offer tea and coffee. And the potential for licensees who provide these less heady brews along with the beer and food has never been stronger, according to a new report.

Pub Catering, published by Mintel and seen exclusively by The Publican, suggests later licensing and the smoking ban will play a part in a transformation of pub culture that will favour tea and coffee. The report surveyed 2,000 customers. The results suggest several reasons why the JD Wetherspoon-led charge of pubs into tea and coffee makes sense.

The report found 31 per cent of customers believed the range and quality of pub food had gone up in recent years. However, 33 per cent said that "better catering provisions" - more diverse offerings, such as tea and coffee - would be likely to entice them into pubs more often.

Sixteen per cent of customers responded that tea, coffee and breakfast in the morning would be a draw. "Diversification," the report says, "is especially important in a market which is expected to become saturated relatively quickly with so many more pubs now venturing into catering."

Pub Catering lists a range of ways in which licensees can diversify. Rotating specialist breakfasts, rather than just providing fry-ups, and urban pubs providing takeaway breakfast for workers, mean opportunities for tea and coffee sales.

Crucially, the report also suggests coffee-shop-style offerings throughout the day. By using branded coffees such as Lavazza, offering a range of specialist and traditional teas and designating a coffee-shop area, pubs can "compete for standalone coffee-shop customers," it says. You can add a sense of theatre too - serving tea in glass cups or traditional sets.

Pubs have been using extended licensing hours to experiment with tea and coffee, the report found. "For pub catering, the freedom to open for flexible hours during the day - to serve coffees and teas or even breakfasts - is more significant than the late-night extensions for consumers," it says. It points to a new café-bar model emerging from reformed licensing, under which consumers are likely to drink more tea and coffee. However, the target for such initiatives is "likely to be the seasonal visitor, tourist or shopper, and not the traditional pub customer".

Demographic trends, particularly an ageing population and a rapid increase in affluent groups, suggest the stereotypical image of the pub can afford to shift. It may be based on offering, more than on atmosphere, and its business model may be based on affluent diners more than on heavy drinkers and smokers. The pub-visiting habits of these groups are determined very much by innovative catering provision, tea and coffee included. And a downturn in trade following the smoking ban is likely to accelerate pubs' moves into diversified offerings like tea and coffee.