A cup of cold coffee has never sounded so appetizing … until now.
Ready-to-drink coffee, kept cold on refrigerator shelves, is the fastest growing beverage category in the U.S., according to Beverage Marketing. “RTD” coffee grew faster than any other segment in 2014, posting a 10.7 percent volume increase. An impressive feat, considering that the category has the smallest volume of all U.S. liquid refreshment beverage markets.
The category has only continued to rise since, as craft coffee manufacturers unveil creative new products, cold brew sweeps the nation and consumers grow accustomed to a new way of enjoying coffee. By 2015, retail sales of cold brew coffee increased a staggering 115 percent, reaching $7.9 million, according to Mintel.
The rise of ready-to-drink
Beverage manufacturers have taken notice of the growing popularity of cold brew coffee, with major chains like Starbucks seeing their cold brew offerings spurring higher sales figures. Eager to give consumers high-quality cold brew refreshment ready to drink, manufacturers are quickly rolling out convenient, on-the-go coffee drinks – no “Caution: Contents hot” warning required.
Take Chameleon Cold-Brew, a growing RTD coffee manufacturer based in Austin. According to Food Business News, the company has seen triple-digit sales growth each year since unveiling its six ready-to-drink coffee beverages in 2011. The drinks are sold regionally at Target, H-E-B and Kroger, and at Whole Foods Markets across the country.
Or consider the incredible success of Kyoto Black, a cold brew, ready-to-drink coffee that tastes suspiciously like bourbon. The brainchild of 28-year-old Justin Doggett, Kyoto Black is a made from a careful mix of two dark roasted beans, described the Chicago Tribune. 1.5-liter bags of the coffee retail for $40, and are sold at several restaurants and coffee shops in Chicago. The source noted that one of the top restaurants in the world, Alinea, recently served the coffee at a preview of its new restaurant space.
Why consumers are embracing ready-to-drink
But what is it about ready-to-drink and cold brew coffee that makes it so appealing to consumers? Isn’t a steaming hot mug, clutched on a snowy morning Maxwell House-style, the ideal image of coffee in America?
Maybe not anymore.
One reason for the rise in RTD is a growing appreciation for artisan products. From beer to cheese, the food and beverage industry is undergoing a craft revolution, with a focus on small, startup-style companies.
Chloe Langham, a retail coffee trainer that used to work with Kyoto Black’s creator Doggett, told the Chicago Tribune that times are changing, and that coffee is having an identity shift, being regarded more and more as an “artisan product.”
“Coffee’s evolving out of being just a method of fuel,” she said. “People are more willing to wait longer or pay more to get more interesting flavor experiences.”
Changing tastes and a growing importance on healthy eating may also be contributing to RTD coffee’s booming sales. Cold brew coffee is most popular among millennials, with 55 percent of these young consumers choosing the beverage, according to Food Business News.
Cold brew coffee contains more caffeine and is less acidic than hot coffee, the source notes, also impacting its appeal.
RTD manufacturers are also creating innovative coffee beverages that swap cow’s milk for alternative milks, such as almond, reflecting a growing national taste for the dairy. USA Today reported that Mintel data shows that dairy milk sales dropped 7 percent in 2015 while alternative milk sales increased 9 percent.