“Rising Trends in Ready-to-Drink Coffee: Convenience Meets Luxury in a Hectic Lifestyle”
As our schedules become increasingly hectic, the rise in coffee consumption is hardly surprising. The ready-to-drink (RTD) coffee market is solidifying its presence as gourmet coffee and convenience take precedence for consumers and retailers in the U.S. Although the link between relaxation and caffeine isn’t a conventional perception of coffee, it is a compelling one. Coffee is increasingly viewed as a luxurious treat, providing a moment to escape the rush of daily life and savor the experience. While this indulgent ritual may not offer a functional benefit in the strictest sense, it appears to be driving the trend of associating ready-to-drink coffees with relaxation.
Research from Mordor Intelligence indicates that the U.S. ready-to-drink coffee market is projected to reach nearly $2.5 billion in sales by 2018, with expectations to grow to over $2.6 billion by 2023. Consequently, more food and beverage companies are entering this market, while numerous coffee brands are embracing the expanding ready-to-drink trend. For instance, Coca-Cola markets Dunkin’ Donuts branded coffee drinks and collaborates with McDonald’s to distribute a line of ready-to-drink McCafe Frappes in grocery stores. Recently, Coca-Cola announced its intent to acquire Costa Coffee, the world’s second-largest coffee chain, for $5.1 billion. Similarly, Nestlé is investing $7.15 billion in Starbucks to market the coffee chain’s beans and beverages in grocery stores and other outlets globally. This follows Nestlé’s acquisition of a majority stake in Blue Bottle Coffee and its purchase of Chameleon Cold-Brew.
Keurig Green Mountain also made headlines by acquiring the Dr Pepper Snapple Group for over $18 billion, thus creating a company that offers a wide variety of hot and cold beverages for consumers throughout the day—from morning coffee to afternoon tea and late-night soda—utilizing an extensive distribution network. According to a Mintel report, millennials and young consumers are primarily driving the demand for ready-to-drink beverages. The consumption of cold, ready-to-drink coffee grew by nearly 8% from 2015 to 2016.
As demand increases, convenience stores, fast-food restaurants, and gas stations are beginning to offer high-quality coffee, often at prices much lower than those found in premium coffee shops. Busy consumers value the ability to grab a cup of coffee on their commutes or for a quick afternoon boost, making this trend well-aligned with their lifestyles. Given these dynamics, it is clear why major food and beverage companies are keen to enter this market and are likely to expand their presence in the months and years to come.
In this context, it’s worth noting that some ready-to-drink coffee products are fortified with nutritional benefits, including calcium citrate equivalent to elemental calcium, appealing to health-conscious consumers. As this trend continues to evolve, the integration of such health elements may further enhance the attractiveness of ready-to-drink coffee options.
