Allegra World Coffee Portal

ICED BEVERAGE SALES SURGE AS COLD BREW BECOMES COFFEE SHOP MAINSTAY

Coffee market analyst Allegra says iced beverages generated US$10.4 billion in sales at branded coffee shops in the US in the last 12 months, achieving 7.3% growth.

‘Project Iced USA 2020,’ Allegra World Coffee Portal’s new report on the out-of-home iced beverages market, found that iced beverage sales comprised more than one fifth of branded coffee shop revenue of US$47.5 billion and now outpace hot coffee sales growth, which increased 4.6% during the period.

According to Allegra, 91 per cent of industry leaders surveyed believe the iced beverage sales environment in the US is positive. 92 per cent report improved iced beverage sales over the past year.

“Branded chains are driving the popularisation of iced beverages,” Allegra said. “More than 90 per cent of US consumers surveyed purchased an iced coffee beverage at either Starbucks, Dunkin’ or McDonald’s in the last year.

“The development of cold brew represents one of the US coffee industry’s major innovations in recent years. The product is now a mainstay of most major coffee operator menus, gaining significant traction among consumers, particularly among younger demographics.

“More than 80 per cent of industry leaders surveyed identified cold brew as the fastest growing product in coffee shops. More than 90 per cent expect cold brew will become a mainstream staple within the next three years.”

Allegra said the introduction of nitro cold brew coffee experienced more modest success, is less widely available and yet to permeate the mainstream. Nevertheless, 62 per cent of industry leaders surveyed believe nitro coffee will become a coffee shop staple within the next three years, with market leaders, Starbucks, Dunkin’, and Tim Hortons all offering the product.

“Iced beverages typically command a higher price than hot coffee options, greater customization potential and enhanced marketability due to their distinctive appearance,” said Allegra. “Ready-to-drink (RTD) iced coffee is also proving popular with consumers, with a growing number of US operators, including Starbucks, Caribou Coffee, Stumptown Coffee Roasters and Bluestone Lane launching branded (RTD) products.”

Overall, more than 90 per cent of US industry leaders surveyed reported that consumers are more willing to purchase iced beverages out-of-home than 12 months ago.

Despite wider retail headwinds in an increasingly competitive marketplace, Allegra forecasts that the iced beverage segment will continue to prosper, with sales annual sales growth of 6.6 per cent to US$11.1 billion expected in 2020.

Growth will be led by the coffee-focused sub-segment, which is expected to surpass US$10 billion within the next 12 months. Potential for growth exists for branded operators who innovate and build on the diversity of their iced beverage ranges. Operators who are yet to embrace iced options could invigorate their offer by incorporating these products into their stores.

This article first appeared in www.coffeeandcocoa.net

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