Companies such as La Colombe are putting their brews on ice. Photo / Getty Images
Companies such as La Colombe are putting their brews on ice. Photo / Getty Images
The coffee industry is getting ready for its very own big chill.
Coffee makers from global giants JAB and Illy to smaller upstarts such as High Brew, La Colombe and Chameleon Cold-Brew are putting their brews on ice.
They're introducing high-end ready-made chilled bottled and canned coffee, betting US grocery shoppers will embrace yet one more way to get their caffeine jolt.
Coca-Cola, Dr Pepper and other beverage makers are jumping in. And a Starbucks-PepsiCo partnership, which has long dominated packaged cold coffee, is also introducing new chilled brews.
While sugary iced-coffee concoctions, like Starbucks' Frappucinos, have been popular for years, baristas and coffee bars are seeing an increasing demand for more sophisticated iced espressos and lattes. Many now say they serve more cold coffee than hot - even during winter.
For the fourth quarter of 2015, Starbucks reported a 20 per cent increase in iced drink sales nationwide following its introduction of a new cold brew coffee in its retail stores. Now, coffee makers are making a push for getting more of those high-end, lower-calorie and less-sugary cold brews and lattes on the shelves of stores like Wal-Mart, 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," said Chris Campbell, the founder of Chameleon Cold-Brew, an Austin-based company with sales growing at triple-digit rates.
Canned or bottled ready-to-drink coffee is a natural evolution flowing from a consumer landscape awash with premium coffee at ubiquitous Starbucks and countless independent coffee bistros.
The US ready-to-drink coffee market has been growing by double digits annually since 2011, and Euromonitor International expects the market to reach nearly $3.6 billion by 2020. The global market stood at $18 billion in 2015, according to Euromonitor.
Michael Butterworth, co-creator of the Coffee Compass blog, says the cold coffees on US grocery shelves now "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."
When the beverage industry looks to the future, it sees US consumers craving ready-to-drink coffee at levels approaching those in Japan. That country boasts the largest such market in the world, according to Andrea Illy, chairman and chief executive officer of Illycaffe SpA. Coca-Cola Co, which partners with Illy in the US and other countries, sells more bottles and cans of coffee than anyone else globally, largely due to sales in Japan.
Starbucks is introducing new sweetened and unsweetened bottled black coffee and cold brews. Photo / starbucks.com
Foamed Latte
There's been a recent burst of ready-to-drink-coffee deal making and product launches. Starbucks, which teams with PepsiCo for its grocery store coffee drink offerings, is introducing new sweetened and unsweetened bottled black coffee and cold brews this summer.
The Starbucks-PepsiCo partnership, which makes up about 75 per cent of the ready-to-drink US coffee market, "can do more consumer education in a week than we'll have in a year," said Campbell, the Chameleon Cold-Brew chief executive officer.
Peet's Coffee & Tea, owned by JAB Holdings, now sells cold brew canned coffee since agreeing to acquire Stumptown Coffee in October 2015.
La Colombe, backed with funding from Chobani yogurt founder Hamdi Ulukaya, will be releasing its canned latte later this year in grocery stores around the country. The drink, which foams like a hot latte when poured, sold briskly - 10,000 cans in its first hour - when offered online in March.
Last month, Dr Pepper Snapple Group entered into a distribution deal with High Brew Coffee, an independent beverage 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 Co, which was sold to Nestle Waters North America in 2011. Smith discovered the virtues of cold-brew coffee while on a seven month sailing trip with his wife and two young children a few years ago.
David Smith started his High Brew Coffee company after buying a cold-brew kit on Amazon. Photo / highbrewcoffee.com
Caribbean Crossing
Crossing from island to island in the Caribbean, often at night, Smith found standard coffee wasn't giving him the jolt he needed to stay alert.
So he bought a cold-brew kit on Amazon. Though it takes 12 hours to make cold brew, it delivers twice the caffeine punch of traditional brewing, and Smith could brew enough in his boat's galley to last four or five days.
"A lightbulb went off," said Smith. "If somebody came up with a ready-to-drink, shelf-stable, cold-brew 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 store shelves in 2014. Sales grew 270 percent in 2015, said Smith, though he declined to provide dollar sales.
One of the promises of canned and bottled coffee is that it's portable and durable and opens up the universe of high-end coffee to folks who may not live around the corner from a hipster coffee bar, said Chermelle Edwards, creator of a blog called Coffeetographer.
"Maybe you want to have a six-pack for your picnic," said Edwards. "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."
