Demand For Iced Coffee Increases

Dec. 5, 2013
U.S. consumers have developed a taste for iced coffee drinks and don’t want to give them up when summer ends.

The majority of U.S. adults drink coffee, and in the last several years, more and more of them have been drinking it over ice. Market researcher Mintel has tracked the iced beverages served in U.S. restaurants and coffee houses for the past several years and found that to meet consumer demand, the percent of iced coffees and specialty drinks has increased. These iced coffee-centered drinks jumped from 19 percent of menu items in 2009 to 24 percent in the first quarter of 2013. Also, iced coffee items were a permanent menu addition, not just a seasonal fad.

One in five

Overall, 20 percent of U.S. adult consumers drink iced coffee. That is nearly a third of the 66 percent of Americans that Mintel says drink any form of coffee in a day, based on a 2010 report. Among the younger consumer - 18 to 24 - the iced coffee percentage jumps to 38.

The Mintel data reports that of iced coffee drinkers, 77 percent say that drinking iced coffee makes them feel more productive at work.

Other research from the NPD Group indicates that iced coffee has gained market share since 2001. It also found that women tended to be higher consumers of iced beverages than men.

Iced coffee in OCS

Early on, manufacturers were responding to this consumer trend, even in the office coffee service channel (OCS). In 2008, a specialty iced coffee machine was released for offices and advertised to the OCS channel. In 2010, the “Brew Over Ice” concept was introduced by Keurig, so a brewer could be used for either hot or cold drinks. While the initial brew-over-ice concept used mostly tea, there were a few coffee blends and over the next two years, Keurig would design even more coffee versions. Today, many K-Cups have sweetened milk crystals inside to meet not only the demand for iced coffee, but for a sweeter drink preferred by the younger consumer. A number of well-known coffee brands also launched ready-to-drink varieties of their iced coffees that can be sold in coolers such as those found in a micro market. Many iced coffee retailers charge a premium price for this type of specialty drink.

Good merchandising includes keeping products fresh, new and hopefully at the forefront of the next consumer trend. Iced coffee is a product that has been growing in popularity for years and isn’t going away any time soon. The year-round appeal is a sign that the consumer feels different about it than hot coffee and is choosing it over alternatives. Iced coffee is certainly worth another look by operators, whether in OCS, vending or micro markets.