The Popularity of Cold Brew Coffee is on the Rise
On the heels of ready-to-drink (RTD) coffee and iced coffee growth, cold brew coffee has become commonplace across the foodservice spectrum, according to a report by market research firm Packaged Facts. Iced coffee beverages broaden the coffee playing field, satisfying refreshment-based consumer needs by carrying the beverage well beyond its morning daypart stronghold. Cold brew's promise of smoother taste and lower acidity, along with its premium positioning, higher price points, and enthusiastic younger consumers, build on iced coffee's base and help keep the coffee market humming along.
According to AudienceSCAN, 46.9% of Coffee Shop Regulars are within the 17- to 34-year old age range that cold brews are aimed at. Additionally, 50.8% of Coffee Shop Regulars are willing to pay more for higher quality on most products.
Once the more exclusive darling of independent coffeehouses, dispensed cold brew variants are increasingly available across all restaurant types, and at some convenience stores, it has become a staple coffee product. From Starbucks and Dunkin' Donuts to Jamba Juice to ampm, cold brew is on tap. And look inside the average convenience store or supermarket cooler, and you'll see a cold brew beverage. Blue Bottle Coffee and Chameleon Cold-Brew are now under Nestlé's wing, and Stumptown Coffee Roasters has been a part of JAB Holding Company since 2015, giving these super-premium, niche brands the marketing and distribution muscle needed to push them into the mainstream, joining industry leader Starbucks and a host of other emerging brands in a fast-moving stream that is crowding the RTD cooler.
For office coffee service operators, cold brew has historically posed challenges related to refrigeration needs and shorter shelf life, making it harder for it to crack the workplace. While the flurry of RTD cold brew launches gives them bottled options, office coffee service operators are also marketing other viable options, such as growlers, kegs concentrates, and kits replete with filters, coffee, and serving pitchers, bringing the option to more offices across the country.
Every major office coffee service provider can now boast cold brew capability. Canteen offers a variety of cold brew coffee brands and kegerators, while Farmer Brothers markets is eponymous Artisan Collection Cold Brew Coffee by Farmer Brothers, and Red Diamond markets Fitz Cold Brew.
Cold brew's rise is also revealed by office coffee service providers' bottom lines. Cott Corporation's Coffee, Tea and Extract Solutions segment grew at a 38% annual average rate during 2013–2017, driven by growth in the cold brew segment. Royal Cup has even taken a step into retail, launching a line of ready-to-drink cold brew coffees there.
Cold brew is a win-win for RTD retail, foodservice, and OCS, offering just enough of a twist on tradition and more than enough super-premium backstory to push price points upward and even convert new customers to a saturated market by volume.
The appeal of cold brew can best be communicated through TV advertisements. Last year, according to AudienceSCAN, 77.3% of Coffee Shop Regulars took action after seeing TV commercials. Social network ads also had sway on 71.3% of this audience last year, and they're 96% more likely than other adults to take action after seeing a pre-roll video ad. Coupons can also be sent via direct mail as extra incentive since 70.7% of this audience took action last year after receiving coupons in the mail.
AudienceSCAN data is available for your applications and dashboards through the SalesFuel API. Media companies and agencies can access AudienceSCAN data through the AudienceSCAN Reports in AdMall.