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Evolution & Innovation in Cold Brew

Once perceived as a possible fad, cold brew has developed into a premium coffee category, and the opportunities for cold brew continue to grow worldwide.

By Anne-Marie Hardie

Once viewed as a potential fad, the continued expansion of the cold brew coffee segment shows every indication that it is a format that is here to stay. According to a January 2017 survey by market research firm Dataessential in partnership with S&D Coffee & Tea, 23,682 independent chain and restaurants in the United States have cold brew on their menu and approximately two thirds of North American coffee drinkers have tried cold brew.

“It’s still really early in the cold brew sector with most consumers still thinking that cold brew coffee is the same as iced coffee, they still don’t understand the brewing process and its benefits,” said David Smith, founder, High Brew Coffee, Austin, Texas. Phrases like “slow steeped,” “no heat,” and “smooth” are often used to inform consumers about how cold brew differs from iced coffee.

Informed consumers perceive cold brew to be a beverage that takes time and care to brew, is expensive, indulgent and superior in taste, S&D Coffee & Tea stated in its report. Cold brew consumers are discerning and anticipate that the flavour and quality will meet their expectations. Taste and “treat” status are two attributes that are driving the growth for this innovative sector.

“Our customers are looking to us to bring exceptional beverage innovation and craft to our stores, which include developing new flavour profiles and introducing unique brewing methods that enhance the overall coffee experience,” said Mary Saunoris, associate communications manager, public affairs Starbucks Canada. “The evolution of cold brew with the launch of Nitro Cold Brew last October is just one recent example.” This past fall, Starbucks installed taps in select outlets across Canada and the United States, infusing their cold brew coffee with nitrogen.

Cold brew has become a staple for Peet’s Coffee, which offers the slow-steeped brew at its cafés and in a ready-to-drink (RTD) format. Peet’s Coffee made the decision to shift away from iced coffee that is hot brewed. “We decided to reinvent the cold coffee business in our coffee bars starting in 2014, moving from iced coffee that is hot brewed and served over ice to a cold brew process. We loved the profile of cold brew, and we spent months refining our blend and brewing for just the right bold, yet refreshing brew,” said Tiffin Groff, vice president/general manager, of Peet’s newly created cold brew division, Coldcraft, based in Emeryville, California.

Dataessential’s Buzz Report revealed that four in ten converters are choosing cold brew in lieu of soda, energy drinks or water. While the remaining are opting for cold brew instead of a lower-priced coffee drink; particularly brewed coffee or iced coffee. “We find that the beverage is increasingly replacing other cold, non-coffee beverages because it provides a refreshing pick me up. With new cold brew drinkers joining coffee connoisseurs already engaged, we anticipate rapid growth from this category,” said Groff.

Recognizing the discerning consumer that cold brew is attracting, Intelligentsia Coffee conducted extensive research to ensure that they were delivering the right product for their end consumer. This included identifying the origin the beans should be sourced from, the optimal roast profile and brewing time for this unique steeping process. “This was our opportunity to have customers realize that cold brew can taste good, while interacting with our consumers at a different time of the day,” said James McLaughlin, president, Intelligentsia, Chicago, Illinois.

The office sector was another category that Intelligentsia looked at, partnering with Joyride coffee to produce its kegs. “Not having to brew something is attractive for the office sector,” said McLaughlin. “More companies are adding a tap in as an amenity for their employees.”

For those companies looking for a more traditional format, Pod Pack has launched a pod version of cold brew. “Forty pods will make 2.5 gallons, which the consumer would place in a metal basket that would steep for 12 hours,” said Tom Martin, evp and COO, Pod Pack International, Baton Rouge, Louisiana. Both Newco and Brewista, are supporting Pod Pack on the equipment side, including a metal basket that will hold the pods, which will easily facilitate large batch cold brewing.

Slow Steeped Meets Convenience

A sector of the community appreciates the elusiveness of the café cold brew that is slowly steeped in small batches. However, millennials and Gen Xers are also driven by convenience, making RTD the natural next step in this platform. The RTD sector is an interesting playing field with product launches ranging from USD $2 cans in grocery stores to the $5 bottle in the cold case. “We are continuing to see the stratification of brands,” said McLaughlin. “Much like how the specialty coffee [category] has evolved, cold brew will evolve with consumers continuing to value better-tasting products.”

The conversion to a ready-to-drink format is far from a simple process, with manufacturers needing to consider all factors that could potentially impact the quality of the beverage, including brewing, shipping and shelf life. Despite its challenges, there are several benefits to launching a ready-to-drink format of cold brew for the convenience driven consumer.

“Ready-to-drink cold brew lets Peet’s share our true cold brew beyond our coffee bars and partner brewing locations, and to give consumers a portable and refreshing option wherever they shop for refrigerated beverages,” said Groff. With its new business unit, Coldcraft, Peet’s RTD cold brew bottles and on-tap kegs are delivered chilled by its own Direct Store Delivery network, ensuring both a quality product while being able to provide a cold brew that is free from preservatives.

High Brew Coffee entered the RTD sector with four flavours as the antithesis of the sweet iced coffee drink. A year into the market, High Brew launched a black and bold offering, and most recently, they’ve added a cappuccino with protein to the line-up. “Everything we make is really geared to the consumer who has an active, on the go lifestyle,” said Smith. “These customers are looking for energy on-the-go, packaged in a convenient 8-oz can.”

The RTD format holds added appeal to those soda and energy drink consumers, who are looking for a healthier pick-me-up. “We are in the sunset period of energy drinks, consumers now realize that drinking all of that sugar to get their energy is probably not the best,” said Brian Lovejoy, Califia Farms, San Joaquin Valley, California. “They are looking for an energy alternative that is much healthier.” A vegan company, Califia Farms offers a full line of cold brew products, including a concentrate, sweetened and unsweetened ready-to-drink, triple shots, and nitro brews. “Our original cold brew and nut milks were extremely successful because people were looking for healthier, tastier alternatives,” said Lovejoy. “We recently launched a nitro cold brew with macadamia and almond milk.” Functional coffees are the next area that Califia Farms is researching, including identifying how to offer more value, including adding healthy fats, to their consumers’ beloved drink.

At Home Consumption

Due to its lengthy steeping process and messy format, the majority of cold brew consumption has been outside the home. “The market has been actively working to create a format that would provide an easier alternative for customer’s who wanted to slowly steep at home,” said Scott Uguccioni, chief sales and marketing officer, Barnie’s Coffee and Tea Company, Orlando, Florida. “Pod Pack had this product that they were developing, which simplified the at-home brewing process — it was the perfect fit.”

Barnie’s Coffee and Tea worked together with Pod Pack to launch its cold brew pods, a single serve version, that consumers can easily steep at home. “We’ve designed a pod that allows you to make at least an 8-10 oz, single serve beverage, at home,” said Martin. “It’s simple and clean, with the customer not having to manage any loose grinds.”

Illy has also joined the “at home” cold brew segment, unveiling single origin Arabica beans from Brazil encased in cold brew packs in June. The filter bags are specifically designed to be easily steeped with zero waste and mess. “Our new cold brew steeping pack creates an easier and more practical method of brewing that provides both operational and cost efficiencies for our hospitality partners,” said Barry Sheldon, president and COO of illycaffè North America. “This offering provides our customers with a wider range of high quality, on premise consumption opportunities to drive revenue.”

Whether it is at home, in the office, at the café or on-the-go, the opportunities for cold brew continue to grow. Most recently, tea has joined into this sector. Several companies are experimenting with this new product offering including Intelligentsia, which offers sparkling cold brew tea on tap, and Argo Tea, whose café menu includes single estate cold brew tea.

Today, cold brew can be found worldwide, with most major cities, including London, Berlin, Tokyo and Sydney welcoming this slow-steeped format. “There’s a lot of opportunity in cold, particularly hand-crafted beverages with innovative flavour,” said Saunoris. “We expect to see continued invention in this space in the coming years.”

Anne-Marie Hardie is a freelance, professor and speaker based Barrie, Ontario. She may be reached at: annemariehardie1@gmail.com.

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