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CHICAGO — In the last year, the popularity of cold-brew coffee in the United States has exploded. Retail sales of cold-brew coffee rose an estimated 115 percent from the year prior, reaching $7.9 million, according to global market research firm Mintel.
Despite this growth, cold-brew options remain a small part of the overall ready-to-drink (RTD) coffee segment, making up only an estimated 0.4 percent of sales in 2015.
“Retail sales of cold-brew coffee reflect its rising popularity as growth has been steady since 2010, shooting up rapidly from 2014-2015,” said Elizabeth Sisel, beverage analyst for Mintel. “While cold brew represents a small portion of the overall category, our research indicates curiosity about trying a new style of coffee is driving current consumer demand.
“However, this may foretell future challenges for the beverage,” she continued. “When a newer coffee brewing method begins to trend, it may easily overshadow cold brew’s current popularity.”
Mintel research shows 24 percent of consumers currently drink retail-purchased cold-brew coffee. Older millennials, those aged 21 to 38 (55 percent), and men (30 percent) stand out as the groups most likely to drink this type of coffee.
Consumers are most interested in cold brew because they enjoy trying new styles of coffee preparation (37 percent), Mintel research also highlighted.
Among cold-brew coffee non-drinkers, though, interest in trying the style is low. While cold-brew coffee has a smoother, less acidic taste and a naturally sweeter flavor, Mintel research shows the majority of consumers who have tried the preparation style but do not like it say it is because of the taste (48 percent). The higher price point is a detractor for 9 percent of cold-brew drinkers.
Highlighting a potential need for consumer education, nearly one in 10 consumers (9 percent) who have not tried cold-brew coffee and are not interested in trying it do not know what cold brew is.
ROASTED VS. SINGLE-CUP COFFEE
Roasted coffee, which includes grounds and beans, remains the largest retail coffee segment by sales in 2015, boasting an approximate 44-percent market share. However, it has struggled in recent years as coffee prices increased and single-cup coffee popularity challenges its growth.
Single-cup coffee continues to see strong year-over-year growth, comprising approximately 33.4-percent market share in 2015, Mintel said. Single-cup coffee is forecast to see 19.6-percent sales gains, the greatest gains of all coffee segments in 2015, reaching $4.3 billion.
Mintel forecasts single-cup sales will surpass roasted coffee by 2018. Sales of single cup are expected to grow 81 percent from 2015 to 2020 to reach $7.75 billion.
“With the majority of consumers using single-cup coffee because it helps them reduce unused coffee waste, we see general coffee trends moving toward the single-cup coffee segment,” Sisel said. "Consumer preferences for premium and craft coffee brews are creating demand for better quality in single-cup form."