Iced coffee market hots up

Consumers’ love of coffee has turned cold, according to new research from Innova Market Insights. Chilled ready-to-drink (RTD) or iced coffee is booming, with the number of launches tripling in the last five years.

Chilled coffee is particularly popular in Asia, with 53% of new product launches globally occurring in the region, compared with 30% in Europe and 11.5% in North America. Despite this, it remains one of the smallest sectors in the soft drinks market in terms of new product activity, accounting for just 4.2% of global launches in the 12 months to July 2014.

“Although ambient canned and bottled coffee drinks continue to dominate globally, particularly in well-established markets such as those in parts of Asia and the USA, it is the chilled, milk-based variants in lidded cups for on-the-go consumption that have been leading growth, particularly in the relatively undeveloped European market,” said Lu Ann Williams, Director of Innovation at Innova Market Insights.

The dairy industry has been driving activity in this sector, Innova reports. Swiss company Emmi has diversified its Caffe Latte range by launching a larger 370 mL version of its Cappuccino drink targeted specifically at male consumers. The company also launched a Decaf variant in the UK in May 2014.

Companies that have traditionally been in the hot coffee space are also joining the rush to release iced coffee products, Innova says. Mondelez launched a chilled coffee product featuring the Jacobs coffee brand in Germany in 2014, while Nescafé entered the European chilled dairy iced coffee market with its Shakissimo range of milk-rich coffees in lidded cups.