Cold Brew Coffee: Consumer Demand Heating Up

Cold Brew Coffee: Consumer Demand Heating Up
September 11, 2018 No Comments Blog Chantal Tremblay

Cold Brew Coffee: Consumer Demand Heating Up

Cold Brew Coffee: Consumer Demand Heating Up

On the heels of RTD coffee and iced coffee growth, cold brew coffee has become commonplace across the foodservice spectrum. 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.

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 OCS operators, cold brew has historically posed challenges related to refrigeration needs and shorter shelf lifes, making it harder for it to crack the workplace. While the flurry of RTD cold brew launches gives them bottled options, OCS 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 OCS 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. Fitz Cold Brew’s website marketing helps tell its story:

We’ve perfected the trending cold brew coffee-brewing method to provide the full-bodied taste of which our founder William “Fitz” Donovan would approve. For today’s coffee drinkers who approach coffee much like a fine wine or craft beer, it’s the cold brew that will have drinkers “getting their daily Fitz.”

Cold brew’s rise is also revealed by OCS 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.

— by David Morris, market research analyst

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