Cold Brew and Iced Coffee Sales Continue to Rise

Friday, June 1, 2018

The coffee segment has a top performer with iced coffee and a huge opportunity with the new category of cold brew. Learn what’s driving the phenomenon and how you can customize these popular beverages for your operation. 

Glass of iced coffee

Iced coffee and cold brew have been on a success trajectory lately. Traditional iced coffee has experienced a growth rate of 33% on menus since 2007, according to Datassential, with a big bump in interest in recent years due to the introduction of cold brew. In fact, cold brew is surging in demand, with younger generations and higher income brackets driving an overall consumption uptick of 30% in the 12 months ended February 2018. Can you say “big opportunity”?

For more on the category, see below.

Cold brew represents an even bigger opportunity.

Cold Brew is unlike any other type of coffee. Cold Brew is crafted, made by slowly steeping ground coffee beans in room temperature water for more than 10 hours and then filtering them to produce a coffee concentrate. That concentrate is diluted with cold water and served chilled over ice.

Steeped for many hours at room temperature, Cold Brew is created entirely without added heat. This slow, gentle process draws out the best of the beans, delivering a smooth end-cup with rich, clean coffee flavor and none of the bitterness and acidity of hot brewed coffees — a flavor profile particularly attractive to younger consumers.

Datassential pegs the four-year growth of cold brew at a whopping 424.5% (44% in the last year alone), and is a favorite of the all-important millennial customer base. Despite this impressive growth, however, the beverage still only appears on less than 4% of menus.

Clearly, getting iced coffee and cold brew on the menu are good places to start, but there are other tactics for boosting these beverages’ appeal and maximizing their potential selling price.

Step Up the Condiments

Given that many customers sweeten and/or lighten their iced coffee and cold brew, it pays to offer them an opportunity to customize these beverages while they’re at it. In addition to the usual cream or milk, and sugar, consider:

  • Flavored creamers and syrups
  • Soy milk, nut milks (such as almond), coconut milk, and other nondairy milks
  • Whipped cream or a heavy cream float
  • Sweetened condensed milk
  • A selection of different sugar substitutes
  • Alternative sweeteners such as brown sugar, raw sugar, agave, maple syrup, and honey
  • A sugared or flavored sugar rim
  • Chocolate shavings, powdered cinnamon, or another finishing garnish

Create Premium Specialties

Since iced and cold brew coffee are still underrepresented on menus, it’s relatively easy to create signature versions of these beverages that will set your operation apart and set the stage for premium pricing.

  • Flavor an iced latte with brown sugar and cinnamon
  • Sweeten and lighten iced coffee or cold brew with sweetened condensed milk and serve over ice, as for a Vietnamese Iced Coffee
  • Blend cold brew with vanilla syrup or extract and milk or cream, and serve over ice for a decadent Vanilla Cold Brew with Cream
  • Blend iced coffee or cold brew into smoothies of all kinds, from strawberry to chocolate (which creates a delicious Mocha Smoothie)
  • Flavor Iced Cold Brew with on-trend flavors like malt, white chocolate, or salted caramel
  • Blend cold brew or iced coffee with ginger, turmeric, honey, and a scoop of ice to take advantage of the healthy image of these ingredients
  • Promote seasonal iced coffee and cold brew beverages with flavors like Pumpkin Spice, Chocolate Peppermint, and Ginger
  • Horchata is a refreshing Latin beverage made of ground almonds, sesame seeds, rice, barley or tiger nuts, plus milk, ice, and spices, including vanilla, cinnamon, and cocoa. Borrow the trendy flavor profile for an Iced Horchata Latte or Horchata Cold Brew
  • Combine iced coffee or cold brew with lemonade for a refreshing drink with a kick of caffeine

Sources: Datassential SNAP Food Profile: Iced Coffee (March 2018); Datassential SNAP Food Profile: Cold Brew (March 2018)

The information provided is based on a general industry overview, and is not specific to your business operation. Each business is unique and decisions related to your business should be made after consultation with appropriate experts.