Competition heats up in the cold brew category

by Donna Berry
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Cold brew category
Category momentum shows no signs of slowing, with formulators developing signature spins to differentiate.
 
 

KANSAS CITY — The expanding ready-to-drink coffee and tea category has many manufacturers seeking retail shelf space for their products. Refrigerated beverages need to steal slots from juice and fruit drinks, while ambient products are pushing out carbonated beverages and isotonics. Category momentum shows no signs of slowing, with formulators developing signature spins to differentiate. Marketers, in particular smaller entrepreneurs who are adept at telling a hand-crafted story about their innovations, are positioning both brewed beverage concepts as healthful alternatives to traditional sugary beverages. Sales data suggest consumers are buying it. Large soft drink manufacturers also recognize this and are adapting.

The Coca-Cola Co., Atlanta, for example, plans to grow its Gold Peak brand of iced teas and coffee products with new R.-T.-D. tea lattes and cold-brew coffees in the first quarter of 2017. The R.-T.-D. tea latte segment is considered an emerging beverage category, while R.-T.-D. coffees, in particular those manufactured using a cold-brew process, have enjoyed strong growth during the past year, according to the company.

The better-for-you halo, along with rising disposable incomes, is expected to boost demand for such products, according to Grand View Research, San Francisco, which estimates the global R.-T.-D. coffee and tea market will grow from $71.4 billion in 2015 to $116 billion by 2024. The demand for the beverages is high among millennials who are looking for energy drinks, which the inherent caffeine in coffee beans and tea leaves provides.

Shamrock Farms Cold Brew
The global R.-T.-D. coffee and tea market is estimated to grow from $71.4 billion in 2015 to $116 billion by 2024.
 

 

The cold-brew phenomenon

Cold-brew coffee, also known as cold press, is coffee brewed without heat. Cold brewing requires steeping beans in ambient- to cold-temperature water for a long period of time. The type of beans, the ratio of beans to water, the temperature of the water and the steeping time all impact the final product.

Cold brewing, at a local, often artisan level, is riding the coattails of the craft beer trend. It is paving the way for an entirely new segment within the R.-T.-D. coffee beverage category. In addition to R.-T.-D. options, cold-brew concentrates are emerging at the retail level, allowing the consumer to create a signature drink with a mixer and sweetener of choice.

One of the earliest U.S. entries is the namesake signature drink from Mojo Cold Brewed Coffee Inc., Wenham, Mass. Though a forerunner on a local level, the product only recently has gained national distribution.

“Mojo is brewed by steeping locally roasted fair-trade Arabica coffee beans in cold water overnight, for about 13 hours,” said Ann Brainard, owner. “This brewing process allows the water and the coffee grinds to ‘marry,’ culminating in a coffee extract that flaunts the full array of flavorful undertones within our beans.”

The coffee extract liquid is turned into a finished product by Puleo’s Dairy, Salem, Mass., which blends it with reduced-fat milk from local Massachusetts farms and some cane sugar.

Millennials are driving the growth of cold-brew coffee, as they appreciate the smoother, less acidic flavor of cold brew to its iced coffee counterpart, according to Shamrock Foods Co., Phoenix, which recently introduced Shamrock Farms Cold Brew Coffee & Milk in mocha, original and vanilla varieties. The fresh dairy product uses cold water-steeped Colombian beans and milk. Each 12-oz bottle contains double the amount of caffeine of a cup of coffee and is sweetened with cane sugar.

“Refrigerated R.-T.-D. coffee is one of the fastest-growing beverage categories,” said Ann Ocaña, chief marketing officer for Shamrock. “Our research revealed the opportunity to pair the smooth taste of cold-brew coffee with our farm-fresh milk, creating a taste profile that is spot on for both the cold-brew fan and those just discovering the trend.”

Saugatuck, Mich.-based Uncommon Coffee Roasters has been serving cold-brew coffee for more than 10 years. In mid-2015, the company partnered with Guernsey Farms Dairy, a Michigan-based company with more than 75 years of dairy processing expertise. The two companies are now introducing three R.-T.-D. coffee beverages in 16-oz gable-top cartons.

Cold Brew Coffee Straight is a beverage with notes of roasted walnut, caramel and chocolate. An 8-oz serving contains 3 calories. There is also an option blended with half and half and another with chocolate milk. Both contain about 100 calories per 8-oz serving.

Cold brew coffee from WhiteWave
WhiteWave Foods introduced STOK Cold-Brew Iced Coffee earlier in the year.
 

 

A few months ago, Denver-based WhiteWave Foods introduced STOK Cold-Brew Iced Coffee. The company cold brews an Arabica-based blend, using a higher ratio of coffee beans to water than typical hot brewing, and steeps the beans at a low temperature for 10 hours. The 48-oz multi-serve bottles come in Not Too Sweet Black and Unsweet Black. The 13.7-oz single-serve bottles come in these two flavors, as well as mocha, which is made with 2% low-fat milk.

A number of shelf-stable cold-brew coffees use old-fashioned beer and soda bottle designs to stand out. For example, Los Angeles-based Bowery Coffee Co. packages its cold brew in 10.5-oz amber-colored short glass bottles with a metal bottle cap. The company claims the beverage contains three times the caffeine as the same amount of heat-brewed coffee, as well as half the acidity.

Starbucks Nitro Cold Brew
Nitro Cold Brew is Starbucks' newest take on its signature cold-brew coffee. The Nitro concept is infused with nitrogen for a smooth, creamy texture.
 

 

Nitro Cold Brew is Starbucks’ newest take on its signature cold-brew coffee. The Nitro concept is infused with nitrogen for a smooth, creamy texture. After preparing the cold-brew recipe, baristas pour the beverage by pulling a tap and allowing the cold-brew coffee to mix with the nitrogen to deliver a new cold-coffee experience. Nitro Cold Brew is cold right out of the tap, so it is served without ice and, as with Starbucks’ regular cold brew, it’s served unsweetened to highlight the flavor the cold-brewing process brings out in the coffee.

Cold brew is also an international trend, with a number of concepts debuting at SIAL in October in Paris. For example, Minor Figures is a line of aseptic organic coffee beverages made by the namesake London-based micro-brewery. The company cold brews coffee for 18 hours before packaging. There is a plain — just coffee — offering as well as a dairy-free, sugar-free option made with coconut milk. The chocolate variety is an indulgent combination of cold-brew coffee, cocoa, milk, sea salt and unrefined cane sugar. The milk variety is simply cold-brew coffee, milk and unrefined cane sugar. Sold in 250-ml packs, the drinks are marketed as being 70% less acidic than their hot-brewed counterparts. The product has an unopened ambient shelf life of one year.

Denmark’s Zozozial Coffee debuted an R.-T.-D. cold-brew coffee as well as a cold-brew coffee concentrate. The product comes in shelf-stable 250-ml glass bottles. There’s also a bag-in-box version of the concentrate for use in food service.

At food service in the United States, the Dunkin’ Donuts’ chain now offers cold-brew coffee in select U.S. and Canadian markets. It is performing well with millennial customers and is proving to be the chain’s most successful new product in the past 16 years, said Nigel Travis, chief executive officer of Dunkin’ Brands, Canton, Mass. In early 2017, in partnership with Coca-Cola, the company will introduce a line of shelf-stable Dunkin’ Donuts R.-T.-D. coffee beverages.

Cold brew tea
Tea's healthy halo is attracting many consumers, including millennials.
 

 

Steeping tea leaves

The concept of cold brewing applies to tea, too, yet it has not caught on in the R.-T.-D. category. That may be changing, however, for example, Solon, Ohio-based Nestle USA is giving its almost 70-year old Nestea brand a major makeover with new bottle sizes and shapes, as well as flavors and formulations. Most notably, in early 2017, the company plans to launch a “real brewed tea” line, which will come in unsweetened and slightly sweet black tea, slightly sweet rooibos, and organic green tea varieties. Tea sourcing is exclusively from the Nilgiri (Blue Mountain) region in India, which is known for its flavorful teas. The story is part of the relaunch.

Several factors are driving the growing demand for tea in the United States, most notably the fact many consumers find tea may be flavorful without the addition of sweetener. Tea leaves are also a source of bioactive chemicals. Tea is particularly rich in catechins, of which epigallocatechin gallate is the most abundant. Catechins and their derivatives have been shown to function as antioxidants and may improve numerous bodily functions, while at the same time assisting with heart health, preventing cancer and slowing the aging process.

This healthful halo is attractive to many consumers, including millennials, who have additional preferences, as compared to mainstream consumers. Chicago-based Datassential found 63% of millennials (vs. 53% of tea drinkers) prefer flavored iced tea, but not from sugary syrups. Among tea drinkers, most (56%) prefer the flavor in the tea itself instead of from flavored syrup. Further, artisan, crafted iced tea is preferred by 54% of millennials (vs. 42% of tea drinkers).

It is no wonder Nestea is undergoing a makeover. In addition to the crafted real brewed tea line, the brand plans to introduce a new fruit flavored line made with no high-fructose corn syrup, articial colors or artificial avors. Sweetened with sugar and stevia, the new line will make its debut in lemon, peach and raspberry flavors. All of the new products will have 50 or fewer calories per 8-oz serving.

“We have reinvented and modernized the brand to meet growing consumer needs for authentic tea,” according to the company. Other beverage manufacturers are expected to follow in Nestea’s footsteps.
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READER COMMENTS (1)

By Lynn 5/9/2017 8:22:11 PM
Hi,can i still drink my Stok cold brew iced coffee bottle if it has expired three months ago and its still unopened?