RTD coffee drives a 'hot bed’ of innovation in coffee category
“While the arrival of pumpkin spice season has people talking, all eyes should be on the impressive growth happening within the US coffee market,” said Nielsen in a recent report.
Nielsen data shows that dollar sales for the US coffee category within the latest 52 weeks (ending July 27, 2019) generated $3bn, up 16% versus a year ago.
According to Nielsen Innovation Measurement data, since August 2018, 1,019 new coffee products have been launched to the US market, representing a 30% increase from the same period in 2017.
RTD coffee brands big and small are continuing to introduce new RTD options across the category from cold brew to mushroom-based and CBD-infused coffee. Within the past year, 158 RTD products have hit shelves (89 cold brew products and 30 iced coffee varieties).
"Americans' consumption habits are shifting across the beverage industry, and consumers are increasingly seeking their next caffeine fix from chilled, on-the-go coffee options over energy drinks and carbonated soft drinks," noted Nielsen.
RTD coffee growth
According to Nielsen, much of the innovation within the coffee category is coming from RTD product launches.
“The innovation within the coffee space is even blurring category lines and encroaching into the alcohol beverage category,” Nielsen noted.
Beer brand Pabst Blue Ribbon introduced a hard coffee earlier this year and Jagermeiseter launched a new cold brew coffee.
CBD-infused coffee is also becoming a hot trend and according to Nielsen’s Thinking Beyond the Buzz CBD study, 13% of US consumers stated that they would use CBD-infused coffee beans or ground beans over the next if they were available.
New Innovations in RTD Coffee
Elemental Beverage has developed a Snapchill technology that can cool piping hot coffee from 140ºF to 40ºF in 60 seconds, which founder Dave Dussault preserves the taste of coffee better than icing or cold brewing the coffee.
La Colombe which gained recognition in the RTD coffee category for its instant foaming canned latte has introduced a Hard Cold Brew Coffee in partnership with MillerCoors with 4.2% ABV.
CBD and coffee are increasingly being paired up with brands including Good Day.
Coffee creamer flavors sweeten sales
Innovation in the coffee category is also coming by way of flavored coffee creamers in a variety of flavors such as white chocolate, toasted marshmallow, and sticky cinnamon bun.
The coffee creamer category has outpaced traditional coffee sales, according Nielsen. Over the past four years (ending June 29, 2019), US sales of creams and non-dairy creamers rose an average of 2.8% each year, compared with packaged coffee sales that rose an average of 0.8% during the same time period.
However, the latest Nielsen Innovation Measurement data shows that there has been a 42% decrease in the number of coffee cream innovations that were brought to the market in the past year, indicating that the market may have reached a flavor overload, said Nielsen.
“That said, ingredient and format innovations continue to push the category forward. Today, new creamer forms are keeping consumers interested—such as nitrogen-infused creamers that are enabling at-home coffee drinkers to further elevate their coffee experience and dairy alternative creamers.”
The status of pumpkin spice:
The annual return of the pumpkin spice flavor craze is still a growth trend worth noting, according to Nielsen. Last year alone, pumpkin-flavored products across grocery generated $511m, a 4.7% increase from one year ago.