Michelle Fox
Senior Manager, Brand Growth Solutions
In Chicago, the outdoor farmers markets are winding down, the leaves have begun to change and fall is in full swing. With autumn’s crispness in the air, it’s a great time to reflect on the sweltering, muggy and seemingly-all-too-short summer. It’s hard to pinpoint whether it was the record heat, continuous innovation to an already-booming coffee industry, Millennial demand for new taste profiles or some perfect combination of other extraneous variables, but one thing is for certain…
Cold brew coffee had a summer comparable to its taste profile (read: strong).
It appeared on Starbucks menus nationwide, Stumptown Coffee Roasters was acquired by Peet’s Coffee, and retail locations experienced doubled sales growth over the prior year. Most important to its success is understanding its unique selling proposition versus its warm counterpart and traditional iced coffee. Essentially, cold brewed coffee uses cold water during the brewing process and requires hours to multiple days to fully steep and complete the brewing process. Because cold brewed coffee doesn’t undergo the same chemical reactions as coffee steeped with boiling water, the taste profile of the beans is more readily distinguished and can retain a fresh, smooth taste for days post-brew.
Given its emerging popularity and boost from the Starbucks effect, it wasn’t that surprising to find half of a refrigerated endcap at Whole Foods dedicated to cold brew coffee as manufacturers raced to capture a piece of the action. The evidence is in the numbers; for the 52 weeks ending October 4th 2015, cold brewed coffee sales reached $15.3 MM in Multi-Outlet and $7.3 MM in the Natural Channel. With dollar and unit sales in both channels exceeding 100% growth versus the prior year and the top three brands commanding over 85% share of the segment, it’s evident that 2015 was just the beginning. I expect we’ll see many new brands introducing cold brew lines just in time for next summer to carve out a piece of the growing market.
Though the segment is highly concentrated, there are still plenty of options to meet the likes of any coffee enthusiast. Califia Farms is the segment leader, offering Dairy-Free and Soy-Free cold brewed coffee with almond milk. Califia Farms has the widest assortment of single and multi-serve sizes and flavors, ranging from basic Mocha and Salted Caramel flavors to the more seasonal Pumpkin Spice Latte and Peppermint Mocha flavors.
Chameleon Cold-Brew is another great brand with more traditional flavors. Ranging from black coffee to vanilla coffee in 10 ounce ready-to-drink glass bottles, it also has specialty flavors exclusive to Whole Foods, like Mexican Coffee and my personal favorite, Espresso Coffee.
Wandering Bear on the other hand seeks to differentiate itself through packaging. By offering cold brew in a box, it keeps the coffee sealed and fresh for up to month by protecting against both air and light – ideal for the large quantity of coffee servings within each box. While Wandering Bear is not currently sold in traditional retail outlets, it is available at a handful of small outlets within the New York market or for shipping nationwide.
Cold brew coffee will likely capitalize on its strong performance and generate plenty of buzz in the upcoming year. It will be interesting to see how new brands challenge segment leaders and how large, traditional coffee manufacturers respond to the competition. Regardless, all coffee drinkers should revel in the news because coffee is about to get that much cooler (pun intended).
