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 (North America) - - Contents -

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.”

Bev­er­age in­dus­try

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