Want to increase afternoon foot traffic? Add cold brew coffee.
Cold brew is one of the hottest categories in coffee (sorry, pun intended). A new report from Technavio finds that the cold brew coffee market share globally is expected to increase by USD $1.37 billion from 2020 to 2025, and the market’s growth momentum will accelerate at a CAGR of 26.44%.
According to the report, 57% of cold brew’s market growth will originate from North America during the forecast period. The US is the key market for cold brew coffee in North America. Market growth in this region will be faster than the growth of the market in other regions. The demand for cold brew coffee is high in the US and Canada, given the prevailing preference for coffee in both countries.
The brewing process for cold brew – brewing roasted coffee grounds with room temperature or cooler water, often overnight – results in coffee that has a fuller body and a smoother taste than conventional hot coffee, which is contributing to its popularity and growth. Cold brew coffee is often brewed onsite.
Cold brew can be easily customized, whether it is adding nitrogen for ‘nitro cold brew’, milk (including plant-based) or sweetened cream, or spices like turmeric and ginger. Cold brew is available in ready-to-drink (RTD) formats, concentrate formats or as dispensed cold brew in retail/foodservice settings. For retailers, cold brew can be a particularly good margin product to stock — the price point has increased from $3.80 in 2016 to $4.40 in 2021, per the US National Coffee Association (NCA).
Limited-service restaurants (LSRs) including fast casual and fast food, coffee shops, bakeries, and café account for most of consumer spending in the segment. LSRs make up lion’s share of where consumers are spending their dollars, the NCA reports.
Cold brew consumers tend to be under 40 years old 27% millennials, 24% Gen Z, higher income, and diverse, per the NCA. About 25% of consumers drink cold brew for a ‘pick me up’.
Mark Corey, Ph.D, director of science & policy, NCA, in a recent webinar pointed out that
cold brew consumption is unique in that unlike other coffee beverages, cold brew occasions are consumed outside of early morning:
Morning — 17%
Midmorning — 24%
Early afternoon — 22%
Evening — 8%
Late night — 3%
So, coffee shops, cafés and other LSRs looking to boost traffic past the mid-morning rush, may want to consider adding cold brew coffee to their menu and heavily promoting it.
Both formats – LSRs and retailers – have food safety considerations that need to be managed for compliance and safety, so be sure to understand and implement them before incorporating cold brew to the menu or SKU assortment.
- Vanessa L Facenda, editor, Tea & Coffee Trade Journal.
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