Fill up the cooler with cold-cof­fee brews

Com­pa­nies are bet­ting big on canned and bot­tled java “Maybe you want to have a six-pack for your pic­nic”

Bloomberg Businessweek (Europe) - - CONTENTS - Jen­nifer Ka­plan Edited by James E. El­lis Bloomberg.com

Amer­ica’s seem­ingly in­sa­tiable thirst for a good hot cup of joe has helped cof­fee shops grow into a $21.2 bil­lion in­dus­try and turned java joints like Star­bucks into so­ci­etal fix­tures. Now cof­fee makers are bet­ting U.S. gro­cery shop­pers will em­brace an even cooler way of get­ting their caf­feine jolt: chilled bot­tled and canned cof­fee.

Global gi­ants such as Il­ly­caffè and up­starts such as High Brew Cof­fee and Chameleon Cold-Brew are rush­ing to put their prod­ucts on ice. Coca-Cola, Dr Pep­per Snap­ple Group, and other bev­er­age makers are jump­ing in. And a Star­buck­sPep­siCo part­ner­ship, which has long dom­i­nated pack­aged cold cof­fee, is in­tro­duc­ing new chilled brews.

While sug­ary iced-cof­fee con­coc­tions, like Star­bucks’s Frap­puc­ci­nos, have been pop­u­lar for years, baris­tas and tony cof­fee bars are see­ing an in­creas­ing de­mand for more so­phis­ti­cated iced espres­sos and lat­tes. Some say they serve more cold cof­fee than hot—even dur­ing win­ter. For the fourth quar­ter of 2015, Star­bucks re­ported a 20 per­cent in­crease in iced drink sales na­tion­wide fol­low­ing its in­tro­duc­tion of cold-brew cof­fee in its re­tail stores. Un­like iced cof­fee, such drinks are brewed cold, tak­ing 12 hours. Now cof­fee makers are press­ing to get more of those high-end, lower-calo­rie and less-sug­ary cold brews and lat­tes on the shelves of stores such as Wal­mart, Kroger, and Costco.

“When given a choice, peo­ple tend to make the health­ier, bet­ter-for-you choice as long as it’s within a rea­son­able cost pre­mium,” says Chris Camp­bell, co-founder of Chameleon, where sales are grow­ing at triple-digit an­nual rates.

The U.S. mar­ket for canned or bot­tled ready-to-drink cof­fee has been grow­ing by dou­ble dig­its an­nu­ally since 2011, and Euromon­i­tor In­ter­na­tional ex­pects the mar­ket to reach close to $3.6 bil­lion by 2020—up six­fold since 2001. The global mar­ket for such drinks was $18 bil­lion in 2015.

Michael But­ter­worth, cocre­ator of the Cof­fee Com­pass blog, says the cold cof­fees on U.S. gro­cery shelves “have a long way to go” in terms of qual­ity and taste. “But there’s a proven mar­ket for these prod­ucts, and you’re go­ing to see more and more of them,” he says. One of the prom­ises of canned and bot­tled cof­fees, which are por­ta­ble and durable, is that they’ll open up the uni­verse of high-end cof­fee to folks who may not live around the cor­ner from a hip­ster cafe, says Cher­melle Ed­wards, cre­ator of a blog called Cof­fee­tog­ra­pher. “Maybe you want to have a six-pack for your pic­nic,” she says. “You don’t go to a cof­fee shop and buy 10 cof­fees for your party, but you’ll buy cold-brew. It’s like beer, like craft beer.”

Bev­er­age in­dus­try

ex­ec­u­tives hope that ready-to-drink cold cof­fee in the U.S. could some­day ri­val the brew’s pop­u­lar­ity in Ja­pan. That’s the largest such mar­ket in the world, ac­cord­ing to An­drea Illy, chief ex­ec­u­tive of­fi­cer of Il­ly­caffè. Co­caCola, which part­ners with Illy in the U.S. and other coun­tries, sells more bot­tles and cans of cof­fee than any­one else glob­ally, largely be­cause of sales in Ja­pan.

The Star­bucks-Pep­siCo ven­ture is in­tro­duc­ing sweet­ened and unsweet­ened bot­tled black cof­fee and cold brews this sum­mer. Peet’s Cof­fee & Tea, owned by JAB Hold­ing, got into cold-brew canned cof­fee when it agreed to ac­quire Stump­town Cof­fee last fall. La Colombe, backed with fund­ing from Chobani yo­gurt founder Hamdi Ulukaya, will re­lease its canned latte later this year in gro­cery stores around the coun­try. The drink, which foams like a hot latte when poured, sold 10,000 cans in its first hour when it was of­fered on­line in March.

In April, Dr Pep­per Snap­ple en­tered into a dis­tri­bu­tion deal with High Brew Cof­fee, an in­de­pen­dent com­pany started by David Smith. For Smith, who’s count­ing on Dr Pep­per for its “mer­chan­dis­ing mus­cle,” cof­fee is a sec­ond act. He co-founded Sweet Leaf Tea, which was sold to Nestlé Wa­ters North Amer­ica in 2011. While on a seven-month sail­ing trip with his fam­ily, of­ten is­land-hop­ping at night, he found stan­dard cof­fee wasn’t giv­ing him the jolt he needed to stay alert. So while at sea he made his own cold­brew, which car­ries twice the caf­feine punch of brewed cof­fee. “A light­bulb went off,” Smith says. “If some­body came up with a ready-to-drink, shelf-sta­ble, cold­brew cof­fee that was con­ve­niently pack­aged, it would re­ally be a great ad­di­tion to what is avail­able to con­sumers out there today.” The re­sult­ing prod­uct, High Brew Cof­fee, hit gro­cery stores in 2014. Sales grew 270 per­cent in 2015, says Smith, who de­clines to pro­vide dol­lar fig­ures.

The bot­tom line Sales of ready-to-serve canned and bot­tled cof­fee could ap­proach $3.6 bil­lion in the U.S. in 2020, up six­fold from 2001.

Newspapers in English

Newspapers from Bahrain

© PressReader. All rights reserved.