Cold Coffee Sales Heat Up

June 8, 2018

Cold coffee is now on-trend. At least that is true for cold coffee that has been specially prepared and bottled or canned. In terms of volume and dollars for 2017, what is commonly called ready-to-drink (RTD) coffee showed substantial growth. Beverage Marketing Corp. (BMC) reports that it outperformed all other segments with a 12.3 percent increase in volume, and 14.4 percent rise in retail dollars. Mintel calls ready-to-drink (RTD) coffee the fastest growing segment (20 percent market share) of the $13.6 billion retail coffee market and forecasts the segment will experience 67 percent growth before 2022. Driving the RTD coffee craze is convenience and that a broad variety is available that appeals to the coffee drinkers still looking for that specialty coffee, but in a less expensive, grab and go format.  

Cold brew inspiration 

It is impossible to mention the popularity of RTD coffee without mentioning cold brew. This process of soaking coffee grounds in cold or room temperature water for hours has been called a saving grace for coffeeshops, especially during hot summer months. The 12 hours or longer process makes it inconvenient to make cold brew at home, inspiring retailers to produce canned and bottled cold brew for consumers instead. Mintel reports total US retail sales of refrigerated cold brew coffee grew 460 percent from 2015 to 2017, to reach an estimated $38.1 million last year.  

RTD cold brew has a number of advantages for the operator in addition to being convenient for the consumer. First, opting for a commercially bottled version eliminates the challenges inherit in producing cold brew inhouse. For operators this would mean ensuring consistent taste from batch to batch, proper pasteurization to kill bacteria, turning product within its short shelf life (30 to 90 days) and the need for a constant cool temperature at all times. Operators who have taken the plunge into inhouse cold brew warn that it is a long-term commitment that needs a carefully thought-out process. However, it can be lucrative. Royal Cup, based in Birmingham, AL, was so successful with its proprietary RTD cold brew, the company started putting it in cans and taking it to retail. In 2017, the company announced a distribution of the cold brew through Walmart stores.  

Instant cold options 

It isn't just the coffee variety that is changing, but even the can. Cold brew is commonly enjoyed with nitro, and package manufacturers have innovated to produce cans that can offer a built-in nitro option. Recently the innovations have been taken even further.  

Convenience store chain 7-Eleven, Inc. announced the roll out its proprietary Fizzics Sparkling Cold Brew Coffee in the first self-chilling cans available to the public in the U.S. The cans are sold at ambient temperature and activated when ready to drink. It takes about 75 to 90 seconds to chill completely, according to 7-Eleven. The novelty alone might help sales.  

Operators can look to RTD coffee to help beverage sales in the near future. Try for variety and premium brands that appeal to the cold brew enthusiast. It could be a great summer special.