RTD Coffee Booms

Innovation drives sales to new heights
Photograph: Shutterstock

NEW YORK — "There is something big brewing in the U.S. coffee market," according to a new Nielsen report, and convenience stores with their single-serve-filled cold vault are in a sweet spot to take advantage of it.

Consumers are increasingly seeking their next caffeine fix from chilled, on-the-go coffee options over energy drinks and carbonated soft drinks, the data collector reported Sept. 4.

“This has come on fast,” Chris Long, beverage category manager for Des Moines, Iowa-based Kum & Go, told CSP this past spring. “Starbucks still owns the business, but there is finally some competition [in the cold vault].”

Nielsen data shows that dollar sales for ready-to-drink coffee were up 16% vs. a year ago for the 52 week period ending July 27, 2019, netting $3 billion. A steady stream of innovation is fueling the growth, the New York-based company said.

"From cold brew to mushroom-based coffee, innovation is brewing across the coffee category," Nielsen said. "To quench America’s thirst for their cup of joe, manufacturers big and small have invested in this space, bringing interesting ingredients and flavors to shelves and highlighting artisanal brewing techniques."

According to Nielsen Innovation Measurement data, since August 2018, 1,019 new coffee products have been introduced to the U.S. market. That’s 30% more than the same period in 2017. And ready-to-drink options are driving much of this growth, Nielsen said. In fact, within the past year, 158 new ready-to-drink coffee offerings (up 14% year over year) have hit shelves, with 89 new cold brews and an additional 30 iced coffee varieties brought to market.

The innovation within the coffee space is blurring category lines and encroaching into the alcohol beverage category, making way for new offerings such as Pabst Blue Ribbon hard coffee and Jaegermeister’s new cold-brew coffee.

And with the continued disruption of cannabis, Nielsen anticipates cannabis-infused coffee could also become a popular contender in the near future. New data from Nielsen’s Thinking Beyond the Buzz CBD Study (U.S.) 2019 shows that 13% of consumers surveyed said they would use CBD-infused coffee beans or ground coffee in the next 12 months if it were available.

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