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”
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 Starbucks-Pepsico 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.”