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U.S. cold brew coffee sales grow 115% from 2014-15, says Mintel


October 7, 2015
By Canadian Vending

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Chicago – Retail sales of cold brew reflect its expanding role in the U.S. coffee category with estimated 115 per cent growth from the year prior, reaching $7.9 million in sales, according to research from Mintel.


Growth has been steady since 2010, increasing 339 per cent through estimated 2015. However, cold brew remains a small part of the overall ready-to-drink (RTD) coffee segment, making up just 0.4 per cent of sales in estimated 2015, Mintel said in a news release.

Overall, 24 pe rcent of consumers currently drink retail-purchased cold brew coffee. Older millennials, those age 21-38 (55 per cent), and men (30 per cent) stand out as groups most likely drinking this type. Mintel research suggests that consumers are most likely interested in cold brew because they enjoy trying new styles of coffee preparation (37 per cent).

Despite its rising popularity in the U.S., the majority of cold brew coffee non-drinkers remain uninterested in trying the product (58 per cent). This is particularly true of older generations, including 65 per cent of baby boomers. However, while 45 per cent of millennials express disinterest in cold brew, the same number (45 per cent) of millennials say they are interested in trial. Of the 76 per cent of Americans not drinking cold brew coffees at home, one third (33 per cent) say they have not tried but are interested in doing so.

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While cold brew promotes a smoother, less acidic taste and a naturally sweeter flavour, Mintel research shows that the majority of consumers who have tried, but do not like, cold brew say it is because of the taste (48 per cent). The higher price point is a detractor for a mere nine per cent of cold brew drinkers. Consumers who have not tried cold brew and are not interested in doing so are most likely to cite taste perception as the reason (83 per cent). Nearly one in 10 consumers (nine per cent) who have not tried, and are not interested in trying, do not know what cold brew is.

This highlights a potential need for consumer education, Mintel said.

“Retail sales of cold brew coffee reflect its rising popularity as growth has been steady since 2010, shooting up rapidly from 2014-2015,” said Elizabeth Sisel, Beverage Analyst at Mintel. “While cold brew represents a small portion of the overall category, our research indicates curiosity about trying a new style of coffee is driving current consumer demand. However, this may foretell future challenges for the beverage; when a newer coffee brewing method begins to trend, it may easily overshadow cold brew’s current popularity.”

Single-cup coffee forecast to overtake roasted coffee by 2018

Roasted coffee, which includes grounds and beans, is the largest segment by sales in estimated 2015, comprising approximately 44 per cent market share. However, it has struggled in recent years as coffee prices increase, and single-cup coffee popularity challenges its growth.

Single-cup coffee continues to see strong year-over-year growth, comprising approximately 33.4 per cent market share in estimated 2015. Single-cup coffee is forecast to see 19.6 per cent sales gains, the greatest gains of all coffee segments in 2015, reaching $4.3 billion. The segment continues to close the gap between it and roasted coffee, with single-cup sales forecast to surpass roasted coffee by 2018. Growth is expected to continue through 2020, growing 81 percent from 2015-20, reaching $7.75 billion.

The majority of single-cup consumers are heavy drinkers, consuming at least once a day (21 per cent). Seven in 10 (69 per cent) single-cup consumers drink more single-cup coffee than brewed pot coffee, with nearly 80 per cent agreeing that single-cup coffee tastes just as good as coffee from a coffee house (79 per cent).

“Single-cup consumption will likely continue to close the gap between it and roasted coffee, as ground coffee has peak market penetration,” Sisel said. “Single-cup popularity has ongoing potential to appeal to consumers’ preferences for convenience and variety. With the majority of consumers using single-cup coffee because it helps them reduce unused coffee waste, we see general coffee trends moving toward the single-cup coffee segment. Consumer preferences for premium and craft coffee brews are creating demand for better quality in single-cup form.”

Single-cup packaging poses environmental concerns for consumers

Challenges facing the single-cup coffee segment involve indications that consumers are concerned with the environmental impact from packaging waste. According to Mintel data, more than two in five single-cup coffee consumers (44 per cent) are drinking single-cup coffee less often because of its environmental impact and are looking for a change to help ease their conscience about usage. Nine in 10 single-cup coffee users (88 per cent) say all packaging should be biodegradable or compostable.

“Manufacturers need to address the environmental concerns consumers have related to single-cup coffee packaging in order to increase consumption volume, as the majority of users say that biodegradable or compostable packaging would encourage them to drink more single-cup coffee,” Sisel said. “Reusable pods offer an environmentally-safe option for single-cup coffee machines, as well as an affordability benefit when consumers use their own grounds. Single-cup recyclable programs also offer a possible solution as they provide consumers an opportunity to take control of their own environmental concerns.”

Functional coffee piques consumer interest

The concept of functional coffee is still new to the U.S. market: the percentage of functional coffee launches in the past five years is extremely small, but research shows positive consumer perception and suggests there is potential in this area. A full 44 per cent of U.S. consumers wish they could add healthful ingredients (for example, vitamins, minerals) to their coffee- and tea-based drinks at foodservice. What’s more, 42 per cent of consumers would like to see added nutritional benefits in coffee at retail (for example, probiotics, vitamins, minerals).

Mintel Global New Products Database (GNPD) finds that globally, an average of five per cent of coffee launches/reformulations/relaunches featured functional/plus claims each year from 2010 to August 2015. This was lower for the U.S., which saw an average of three per cent from 2011 to August 2015. Three per cent of U.S. coffee product launches in 2015 included a high protein claim, according to Mintel GNPD, in line with continued high-protein trends across food and drink categories.

“The majority of Americans are coffee drinkers, drinking a wide variety of types. The category has great opportunity for growth, as long as it continues to evolve to meet drinker demands and innovate with current trends, including alternative preparation methods, premium or artisanal brews and better-for-you options. Traditional roasted coffee remains at the height of market penetration, helping to spark interest in newer format single-cup and ready-to-drink coffees, including cold brew. While single-cup packaging waste and low usage occasions for ready-to-drink coffee is a challenge for manufacturers, they also provide opportunities for improvement and innovation. Functional coffee is one example where the category is innovating. While still in its infancy, Mintel research indicates that core consumers welcome it as another option,” Sisel concluded.