Around one in five global new coffee launches last year was iced and ready to drink (RTD), up from 16% in 2014, according to research from Mintel Global New Products Database.
Chilled coffee is thriving in the US, growing at least 10% annually between 2013 and 2017. More than half (56%) of new RTD coffee launches in the US were cold brew in 2017. Cold brew sales reached an estimated $38 million in 2017, representing a single-year growth of 137%.
Meanwhile, RTD coffee is also building momentum in China. Mintel forecasts annual growth of near an estimated 20% in the next five years as RTD steals market share from instant coffee.
Companies and brands to have recently launched new cold brew or iced coffees include Union Hand-Roasted Coffee, Sandows, Bulletproof, Coffee-Mate, Suntory and Jimmy’s.
Despite the rapid rate of growth of RTD elsewhere in the world, Mintel says that Europeans remain resistant to the lure of iced coffee. While Spanish consumers are most likely to have tried iced or chilled coffee, only 10% have actually purchased it either from a store or online. Meanwhile, in countries like France and Italy, purchase of iced or chilled coffee among adults is just 3% and 4% respectively.
While Europe has been slower to follow the iced coffee boom, Mintel highlights the strong potential among younger drinkers. Two thirds (66%) of UK 18 to 24-year-old coffee drinkers say chilled coffee is a good alternative to sugary drinks, compared to a quarter (26%) of drinkers aged over 45.
Mintel Food & Drink associate director Jonny Forsyth said: “Global investment in chilled, RTD coffee has increased as producers target a younger drinker who enjoys the format’s taste, refreshment and indulgence.
“RTD coffee is proving a better format for innovation than other hot-serve formats and, in 2017, manufacturers continued to push the format’s boundaries. Cold brew is helping to premiumise the RTD category, and is growing fast in the US, albeit less so in other markets.
“But while new product launches of iced coffee have reached record highs globally, in the US, cold brew has emerged as a vibrant growth segment of chilled coffee, and could prove to be the tipping point for take-up of cold coffee in Europe.
“The key to success lies with the younger generation which has been introduced to chilled coffee in branded coffee shops, which are growing quickly in Europe.”
US tops global coffee sales
After experiencing strong gains from 2012-15, the US coffee market slowed somewhat from 2016-17 as market penetration of single-cup coffee makers saturated. However, the US is still comfortably the world’s biggest market by volume, according to Mintel.
Last year, US consumers bought 607,000 tonnes of coffee, followed by Brazil (425,000 tonnes), Germany (424,000 tonnes), Japan (304,000 tonnes), and finally Indonesia (268,000 tonnes). Meanwhile, in the UK sales of coffee stood at 63,000 tonnes, while in China sales reached 53,000 tonnes.
While the US leads the way in volume sales, North European countries enjoy very high per capita consumption of coffee – especially in Finland, where consumers drank 7.91kg per person in 2017, and Norway, where they consumed 6.62kg.
The rise of ‘super coffee’ reflects how third-wave coffee shops (and some retail brands) have increasingly pushed coffee with health benefits such as added coconut oil, chia seeds and protein.
Mintel highlights opportunities for coffee brands to target health-obsessed younger drinkers seeking added health benefits. In the US, one in six (17%) 18 to 34-year-old male coffee drinkers view added functionality (such as extra protein and added vitamins) as important when choosing which coffee to drink. While in Germany, 41% of 16 to 44-year-old coffee drinkers are interested in trying coffee with added protein, versus 21% of drinkers aged over 45.
Jonny Forsyth concluded: “Coffee with added protein is still a relatively unexplored area of global coffee innovation despite Starbucks targeting this space in the US market since 2015.
“Increasing attention to health and wellness among consumers globally will result in specific opportunities for coffee with added protein, as well as organic coffee, in the next two years.
“Europe has particular potential given rising interest in high-protein diets and the popularity of milky coffee among younger adults.”
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