29 / 01 / 2018 by IDW

Ready-to-drink coffee is poised to become a major force in the global beverage industry.  With profits projected to top 100 billion dollars a year annually by 2024, the ready-to-drink coffee market is still in the early stages of its upward trajectory.  In this article, we’ll explore why ready-to-drink coffee has turned into the next big trend in the beverage industry, as well as discuss how the industry is adapting to the groundswell of demand for ready-to-drink coffee.  Specifically, we’ll look at how cold-brew and other novel ready-to-drink coffee formulations have tapped into existing market pressure from consumers for healthier alternatives to soft- and energy-drinks that exist on the market.  While ready-to-drink coffee has existed on the market for some time, major players in the industry began to see unmet demand in the ready-to-drink coffee market, resulting in an increasingly dizzying array of ready-to-drink coffee and tea formulations hitting the market from nearly every large beverage company.

Why Coffee?

Understanding the rapidly growing popularity of ready-to-drink coffee requires gaining a better perspective on existing long-term trends within the global beverage industry.  One of the primary trends driving the popularity of ready-to-drink coffee beverages is the growing presence and spending power of millennial consumers in the market.  Consumers as a whole have shown a trend of moving away from the sugary, sweet beverages of the past towards beverages with wholesome or natural ingredients.  Today’s consumers are more likely to critically examine a product for the ingredients it contains, with a discerning eye for the perceived health benefits that consumption of the product would provide.  Alongside this, ready-to-drink coffee has tapped into the artisanal movement of small-batch, crafted products with traceably sourced ingredients and a compelling backstory, in the form of cold brew coffee.  Cold-brew coffee took an already existing product on the market and revitalized it with younger consumers.   Lastly, coffee provides an energy boost due to the caffeine it contains, making it an alternative to energy drinks and sodas that also contain caffeine, but are perceived to be a less healthy alternative.

Actions and Reactions

Large players in the coffee and beverage business understood the potential for ready-to-drink coffee many years before the current surge in popularity began.  Companies like Starbucks, which had a recognizable brand and is the dominant force in the coffee market saw the potential of bringing their products out of their storefronts and into the convenience and grocery store shelves.  Over time, smaller, local coffee shops and companies began to see the potential as well.  Using preparation techniques such as cold-brew, coffee shops began to release products that differentiated themselves from the existing products on the market through their origin story, preparation technique, and ingredients.  These products began to be immensely popular with consumers, particularly young consumers that steered away from traditional sodas and other refreshments due to their perceived negative health impact. Seeing the popularity of cold-brew and other novel formulations of ready-to-drink coffee that began to enter the market, major beverage brands began to release their own flagship lines of ready-to-drink coffees and teas to meet the demand.

The ready-to-drink coffee trend is far from ending in popularity.  Rather, it is accelerating in popularity with the modern consumer.  Consumers today are more likely to reach for beverages that give them a perceived health benefit, contain natural ingredients, and provide a unique experience for the consumer.  Many cold-brew and other ready-to-drink coffee formulations check off each of these boxes for consumers.  At the same time, ready-to-drink coffee also provides a tangible benefit for the consumer.  It offers them a large dose of caffeine in a tasty, easily consumed beverage.  For those consumers that don’t enjoy energy drinks, yet need energy to continue on their day, ready-to-drink coffee is proving to be the go-to choice.  Today’s consumers are busier than at any time in the past.  With less downtime and longer work hours, today’s consumers are less likely to have the time to spend brewing their own coffee.  This is particularly true when they are out or on-the-go.  For a quick refreshment that provides them with a late afternoon boost of energy, the modern discerning consumer is more likely to reach for a cold-brew or ready-to-drink coffee beverage.