Japan leads RTD coffee innovation, accounting for 18% of all iced RTD coffee launches in 2017. The US is the next biggest innovator, accounting for 13% of all launches.
Europe, however, has been lagging behind: but Mintel says there is ‘strong potential’ among younger drinkers for the trend to catch on in the same way.
New generation, new rituals
In 2015, iced coffee made up 16% of global launches; rising to 19% in 2017.
“Global investment in chilled, RTD coffee has increased as producers target a younger drinker who enjoys the format's taste, refreshment and indulgence," says Mintel. "RTD coffee is proving a better format for innovation than other hot-serve formats and manufacturers continue to push the format's boundaries.”
Chilled coffee is thriving in the US, growing at least 10% annually between 2013-17. Cold brew is helping premiumize the RTD category and is growing quickly in the US: 56% of new RTD coffee launches in the US were cold brew in 2017, up from 38% the previous year.
“Younger drinkers, who are less ingrained in the ritual of drinking hot coffee, have driven RTD coffee growth," says Mintel. "Some 68% of US 18-34-year-olds currently consume single-serve RTD coffee compared to 43% of all adults.”
Chameleon Cold-Brew Coffee: the premium organic brand from Austin is the top organic cold brew brand in the US, and was acquired by Nestle USA last year.
Gold Peak iced coffee: Coca-Cola’s RTD tea brand has expanded into salted caramel and almond toffee coffee drinks
La Colombe Draft Latte: a ‘café style drinking experience’ from the patent-pending process that releases gas upon opening, creating foam traditionally found in a hot latte.
High Brew Coffee: Another brand from Austin, High Brew Coffee is launching its sparkling cold brew range this year.
Japan leads innovation
RTD coffee is building momentum in Asia. Japan accounts for 18% of all iced RTD coffee launches globally. In China, Mintel forecasts annual growth of around 20% in the next five years as RTD steals more share from instant coffee.
In comparison Europe has been a lot slower to follow the iced coffee boom: in ‘coffee purist’ countries such as France and Italy, only 3% and 4% of adults respectively purchase iced coffee. Spanish consumers are the most likely to have tried iced coffee, but even then only 10% have actually purchased such products.
But Mintel says that similar trends to the US shows the potential for the iced coffee movement to take off in Europe.
“Two-thirds (66%) of UK 18-24-year-old coffee drinkers think chilled coffee is a good alternative to sugary drinks, compared to a quarter (26%) of drinkers aged 45+. This echoes what is happening in America where younger drinkers have driven RTD coffee growth.”
The key to success will be introducing the younger generation to chilled coffee in branded coffee shops, which are enjoying strong growth in Europe, says Mintel. Meanwhile, given the success of cold brew in the US, this category could also be a ‘tipping point’ for the take-up of chilled coffee in Europe.