The company’s investment in RTD coffee is part of its multi-brand strategy to become a major player in the growing RTD coffee market. Coca-Cola first entered the RTD coffee category with the launch of Illy Issimo in 2007. The company also sells Gold Peak iced coffee, but not in a single-serve packaging format.
“Our new tea lattes and cold brew iced coffees will feature our signature high quality ingredients and distinct taste for a delicious pick-me-up anytime of the day,” Geoff Henry, vice president of tea & coffee for Coca-Cola said.
Gold Peak will join Illy in Coca-Cola’s expanding RTD coffee portfolio in the US and both its cold brew and tea latte lines will feature “real milk and sugar in an array of tasty flavors,” the company said.
The move towards RTD coffee is also a response to its shrinking soda sales and the 1.2% decline of the total volume of soda consumed in the U.S. in 2015, compared to a drop of 0.9% in 2014.
Coca-Cola has not yet disclosed any flavors, retail prices, or packaging they will use for the tea latte line.
Building on Gold Peak success
The company believes the past success of its Gold Peak brand, which surpassed $1bn in sales 2014, will help drive consumer popularity towards the new line of RTD tea lattes.
“Gold Peak has a passionate following of fans who love the taste,” Henry.
“We are excited to introduce new ways for people to enjoy the brand. Our new tea lattes and cold brew iced coffees will feature our signature high quality ingredients and distinct taste for a delicious pick-me-up anytime of the day.”
Potential and constraints in RTD coffee
According to a report by Research and Markets, North America’s RTD coffee market was valued at $2.058bn in 2015, and is expected to reach $2.343bn by 2020 making the emerging beverage category no longer just a trend but an essential component of a beverage company’s product portfolio.
Typically marketed as a young urban phenomenon, RTD coffee’s convenience, portability, and perceived cognitive benefits appeal to an older generation as well, Research and Markets noted.
One constraint companies and brands like Coca-Cola’s Gold Peak may encounter with RTD coffee products is the constraint of regional tastes and preferences, which can be overcome with extensive marketing and the use of locally-sourced products to appeal to a variety of consumers, the report said.