Cold coffee is hot. But we’re not talking about your basic cup of joe on ice. Cold brew coffee—the smooth, full-bodied, coffee-forward drink made by steeping freshly ground beans in filtered water—continues to sweep the nation as independent coffee shops, retail stores and even coffee giants such as Starbucks and Dunkin’ Donuts add it to their menus.
Retail sales of cold brew have grown a whopping 580% from 2011 to 2016, according to Mintel. Cold brew sales are expected to grow another 149% by 2018, showing no signs of slowing down. At the retail level, cold brew sales saw their strongest growth last year.
Given the increase in ready to drink (RTD) cold brew options, as well as the minimal equipment needed to prepare the beverage, c-stores now have the opportunity to get into the cold brew game. With higher price points and profit margin potential, cold brew can easily help c-stores boost their beverage bottom lines.
The Third Wave
Cold brew first came onto the scene years ago at independent, “third wave” coffee shops focused on sourcing fair trade beans, artisanal roasts and pour-over methods.
The third wave coffee movement (as opposed to the second wave coffee movement focused on syrup-infused lattes led by Starbucks) has fueled renewed interest in the coffee category by treating coffee beans and roasting as an artisanal beverage rather than a commodity. Naturally, cold brew coffee has become part of this trend, touted for having a stronger coffee flavor, less acidity and an overall smoother mouthfeel.
Cold brew coffee tends to have less of a bitter taste because no heat has been applied to the brewing process, which also helps more nuanced flavors of the bean and the roast shine through.
Some shops and restaurants are taking the cold brew trend one step further, adding nitrogen to the brew and drafting a creamier beverage akin to a frothy Guinness.
Cold Brew Growth
Cold brew coffee shares started their upward trajectory from 22% in 2012, when restaurants and coffee houses started serving cold brew coffee, according to Mintel.
Now, this drink has transcended warm-weather-only appeal to become favored among millennials and others looking for a stimulating morning beverage or afternoon pick-me-up in place of sugary sodas or even energy drinks.
Mintel research shows 24% of consumers currently drink retail-purchased cold-brew coffee. Older millennials aged 21 to 38 (55%), and men (30%) stand out as the groups most likely to drink this type of coffee.
The future looks bright for cold brew sales outside of this group, however, as Mintel has found that four in five consumers now know what cold brew coffee is, even if only a third have tried it. There is also greater percentage of consumers who drink cold brew at foodservice as opposed to retail, which means there’s plenty of room for growth in all segments.
C-stores are in a unique position to capitalize on the growth of cold coffee beverages, and cold brew coffee in particular. Connecting with the right vendor who can supply a high-quality, ready to drink product saves the time, labor and additional costs of making it in-house, while providing an outlet for easy and profitable retail sales.
DanoneWave’s STOK cold brew coffee continues to inspire this new generation of coffee drinkers—and c-store customers.
This post is sponsored by DanoneWave Away From Home