The Growing Popularity of Cold Brew & Ready-to-Drink Coffee in Global Markets
Although most people wake up to a hot pot of coffee, it’s impossible to ignore the impact that cold brew, iced coffee, and ready-to-drink (RTD) coffee have had on the industry in recent years.
In the US and much of Europe, iced coffee and RTD chilled coffee drinks have become a part of regular life and a grocery list staple for many. So, what’s behind the growing popularity of cold brew and ready-to-drink coffee in global markets? Read on to find out…
Why is Cold Brew Getting More Popular?
First, why are cold brew and RTD coffees becoming so popular? Between now and 2033, the sector is set to grow by 22.49%, translating into a value of $4,595.53 million. Although the US is the biggest chilled coffee market—representing almost half of the global market—the growth in India, China, and Japan demonstrates a huge opportunity for market growth.
There are various reasons why cold brew and RTD are getting more popular. From social media trends and convenience to potential health benefits and caffeine content, here’s why cold brew and iced coffee are getting more popular…
1. Flavors and Variety
One of the key drivers in the cold coffee segment is the variety. Before, cold brews or Starbucks frappes were the only iced options on the go. Now, you can buy nitro coffees, frappes, iced cappuccinos, and vegan and dairy-free iced coffee in various flavors and caffeine levels.
This variety makes ready-to-drink cold brews and iced coffees appealing to a wider market.
2. Easy Access
More and more coffee shops are offering cold brew coffee. It used to be that only the specialty coffee shops sold this punchy, bitter favorite, but now it’s widely available in many chains. You’re also likely to find ready-to-drink cold brew coffee in the refrigerator at the grocery store.
RTD chilled coffee has been around for a while. However, only one or two brands could be found in the refrigerated section at certain (not all) grocery stores. Now, several different brands selling a variety of flavors can be found at most grocery stores across the globe.
By their very nature, RTD coffees are convenient. You don’t have to wait in line for a barista to make your drink, and you can even buy a few and grab one out of the fridge on your way to work. This convenience factor cannot be overstated when it comes to the growing popularity of RTD coffee drinks around the world.
3. Shelf Life
One of the biggest selling points of RTD coffee beverages is the shelf life. In some cases, manufacturers can guarantee a shelf life of up to a year. This is great for grocery stores that don’t need to worry about replenishing stock. It’s also convenient for people who want to stock up the cupboard or fridge at home.
Although RTD cold brew is available, cold brew is ideal for batch brewing at home.
Meal prepping and batch baking have become popular in recent years. Meal prepping saves valuable time and money which is what makes it so attractive to busy families. Cold brew can be made and stored in the fridge for up to 10 days. It’s convenient to make a large batch of cold brew and fill up your glass or bottle in the morning.
4. Healthy, Low-Acid Options
Regular hot brewed coffee can trigger acid reflux and heartburn in some people. However, cold brew is a lot less acidic as it’s brewed using cold water. This makes it softer on your stomach even if it’s heated up to make a warm coffee afterward.
Cold brewing may also extract more antioxidants from the coffee beans, potentially making it a “healthier,” more beneficial alternative to regular coffee.
5. Packaging and Branding
If you go to any grocery store and look at the RTD coffee section, you’ll see a variety of colorful, branded products. Many RTD coffee brands have opted for premium glass packaging or recyclable cartons with flashy logos and designs.
Not only are these enticing to the eye, but they offer a more sustainable alternative to the plastic iced coffee takeout cups often used at coffee shop chains.
6. Social Media
Across social media, especially TikTok and Instagram, iced coffees and cold brews are appearing everywhere.
It’s trendy to drink iced coffee. Whether it's cold brews from health-conscious fitness influencers or creamy, sweet, caramel iced coffees from food influencers, we’re seeing iced coffee everywhere online.
7. Price
With the rising cost of living, consumers are looking for ways to save money. Compared to buying iced coffee from coffee shops, RTD chilled coffee from the grocery is much more cost-effective.
Similarly, making cold brew is a cheap and easy process, and most people have the ingredients and equipment to make it at home. Making large batches of iced and cold brew coffee at home is a great way to save money if you have a habit of visiting the coffee shop daily.
The Growth of RTD and Cold Brew in Asian Markets
During the past few years, the coffee market in Japan, China, India, and Singapore has increased considerably. This has been driven by the millennial market which has grown up drinking coffee and relies on it for work and study.
The RTD coffee segment in Asia in particular was valued at $19.14 billion in 2023 and is estimated to hit $40.02 billion by 2032. The growth has been caused by several things. Despite the cost of living crisis elsewhere in the world, there has been an overall increase in disposable income across China and Indonesia, especially in the growing middle class.
The added convenience and premium feel of RTD coffee drinks also appeal to this demographic. With the hectic pace of life in Japan, China, India, and Singapore, convenience and caffeine are key — RTD coffees tick these boxes.
Convenience is King
In our fast-paced society, convenience is undoubtedly king. Being able to grab a coffee and go without waiting in queues or while the coffee brews is a commodity. Being able to buy chilled coffee at various grocery stores and gas stations allows people to get a caffeine hit on the commute.
With younger generations, the emphasis on convenience is only getting greater. According to a Mintel survey, Gen Z is significantly more likely to drink RTD cold coffees than hot brews. As Gen Z and Millennials make up a large proportion of the coffee-buying market, this shift towards cold brews and RTD is only going to get larger as time goes on.
High-End Roasters and RTD Cold Coffee
With more premium roasters and high-end companies moving into the RTD coffee industry, the quality of long-shelf-life coffee is only improving. The increase in technological advances has provided ways to preserve the coffee’s unique flavor for longer. This has created a superior product that can demand a higher price point.
Premium RTD coffee is also in a much better position to go toe-to-toe with specialty coffee shops and large chains. When people are trying to save money but don’t want to compromise on quality, having these kinds of options is a huge bonus.
With market volatility impacting the price of beans, manufacturing, and trade, being able to bulk produce and store products with long shelf life is beneficial.
Final Notes on the Growing Popularity of Cold Brew and Ready-to-Drink Coffee in Global Markets
A blend of convenience, variety, and accessibility have all contributed to the meteoric rise of the cold brew and RTD coffee market. While traditional hot coffee still owns the majority of the coffee market, the increased interest in cold brew and iced coffees will continue to boost the sector.