Key takeaways:
- Coffee quality now drives bakery choice, with 81% of consumers saying it’s a major deciding factor.
- Younger drinkers are pushing demand for cold and specialty coffees, boosting average spend per visit.
- Bakeries offering premium, convenient coffee experiences are outperforming the wider out-of-home market.
Coffee chains might still dominate the headlines, but the real buzz is brewing inside bakeries and sandwich shops.
Lincoln & York’s newest report finds that 81% of consumers say the quality of the coffee is a major factor in where they buy their bun – a stat that’s forcing operators to think differently about their drinks offer.
Almost half (47%) of consumers buy coffee from a bakery or sandwich shop once a month, and one in five 25- to 34-year-olds do it weekly. Another 68% would recommend a bakery purely on the strength of its coffee. That alone says plenty: coffee’s not the sidekick anymore – it’s the star.
What’s surprising is how often that cup stands on its own. Four in 10 customers say they always buy coffee but only pick up food half the time. More than half of 25- to 34-year-olds rarely or never buy food with their drink. It’s a clear cue that coffee’s become its own occasion – not just a pastry add-on.
“It would be easy to assume that coffee is an afterthought in bakery and sandwich shops,” says Ian Bryson, MD, Lincoln & York. “But our research shows that’s far from the case. Coffee is driving consumers into this channel and is being purchased, even when food isn’t.”
The value lift: cold, specialty & younger drinkers
Lattes still have loyal fans, mostly among the 55-plus crowd. In fact, 53% of 55- to 64-year-olds typically order a latte in a bakery or sandwich shop. But that drops to just 26% among 18- to 24-year-olds, who are much more likely to go for an iced coffee or frappe.
Among that younger group, 51% order iced or blended drinks and 40% say they seek out specialty coffee in bakeries for its flavor and quality. They’re not just after caffeine – they want a moment worth savoring (and maybe posting).
“The significance of the younger demographic in coffee isn’t new news,” Bryson adds. “But what we must take from this is that the bakery and sandwich sector needs to continue to meet their demands for new and exciting flavours to ensure they continue to get their caffeine fix in this channel.”
They’re also lifting spend. 74% of 18- to 24-year-olds spend between £5 and £7 on coffee at a bakery and 79% of 25- to 34-year-olds do the same. Another 15% of those under 25 spend more than £7. When the product feels premium, price stops being a barrier.
Bakery coffee bucks the out-of-home slowdown
While the wider out-of-home coffee market has cooled, bakeries are heating up. Worldpanel by Numerator (52w, ending June 15, 2025) shows coffee sales in bakery and sandwich outlets rose 15.4% year-on-year – impressive growth in a category still squeezed by cost pressures.
That’s in line with Euromonitor International, which highlights smaller, quality-led outlets and bakery chains as the main growth engines. Mintel also notes that younger consumers are flocking to bakery cafés for ‘affordable indulgence’ – the sweet spot between a premium coffee chain and a supermarket grab-and-go.
The model works because it fits how people spend now: convenience, good value and a touch of comfort. For many, the neighborhood bakery offers a more relaxed, personal coffee moment without the corporate gloss – and that’s hitting the right note.
Beyond the cup: experience & loyalty count
Coffee may bring people through the door, but experience keeps them coming back. Lincoln & York’s research shows food quality (26%) remains the top reason people choose a bakery, with coffee quality right behind it. More than half (52%) of consumers say they’ve switched bakeries because of poor coffee and 68% would recommend one based on the brew alone.
Soft skills matter, too. Friendly service, quick turnaround and skilled baristas all play into loyalty. And loyalty programs themselves are still popular: 55% of all consumers use them, rising to 61% among those aged 55-64. The best approach? Mix old-school stamp cards with digital rewards to reach everyone from Gen Z to retirees.
Strategy for the modern bakery
Lead with coffee quality: With 81% of consumers prioritizing coffee, your brew is now the brand’s front line.
Serve it cold: Iced, blended and flavored coffees are mainstream – skipping them means missing a generation.
Design for younger drinkers: They’re high-frequency, high-spend and trend-driving.
Train your team: Good baristas and great service turn casual buyers into regulars.
Keep loyalty flexible: Combine digital and physical rewards for maximum reach.
Balance indulgence with value: Consumers want an affordable treat, not a compromise.
For Bryson, it comes down to mindset. Bakeries that treat coffee as an experience rather than a side order are the ones winning hearts and spend.
“Consumers are increasingly seeking high-quality, convenient coffee experiences that fit seamlessly into their day, and bakeries are rising to meet this demand with innovation, consistency and accessibility. Prioritizing quality coffee in this channel is crucial to winning new consumers and maintaining loyalty amongst existing visitors.”
With 81% of consumers choosing a bakery based on its coffee, the opportunity’s already brewing – it’s just a matter of who pours it best.
