Coffee consumers won’t give up indulgence, though cold brew still grows

At this month’s National Association of Convenience Stores (NACS) show in Atlanta, coffee innovators addressed their c-store customers with the latest in c-store coffee: nitro lattes, flavored iced coffee, canned cold brew, indulgent blended drinks and espresso cans.

All the new launches, intended to be enjoyed cold and on-the-go, cannot be categorized the same way. Chilled RTD coffee is an evolving market that attempts to appeal to consumers drinking coffee at new occasions and in new formats.

Despite an emphasis on stripped-down, canned cold brew that’s become so popular in c-stores and mass retail, actual consumer behavior reflects a more well-rounded coffee portfolio will sugar and indulgence still in the mix.

Wellness and indulgence trade-off

California-based Peet’s Coffee has crafted a direct rival to Starbucks’ popular RTD Frappuccinos. The new Peet’s Blended Coffee line comes packaged in glass bottles and brewed from single origin Colombian coffee.

Peet’s operates coffee shop locations in eight states and Washington DC, and has only been in the RTD space for a few years. The company always valued fresh coffee, and didn’t know if RTD was the best move for them.

It initially started with a refrigerated cold brew, but pulled back on the product a bit after facing distribution complications. Peet’s then turned to shelf stable beverages, but found it even harder to master in terms of taste and freshness.

The biggest part of RTD is the premium indulgence segment, Gretchen Koch, senior director of marketing at Peet’s, told BeverageDaily, and Peet’s wanted to create a product with an elevated experience for the category.

“Consumers are telling us that they’re highly interested in this,” ​Koch said. "It’s contrary to what we hear about people wanting low calorie and wellness, but people want wellness because they also want to indulge. It’s a trade-off.”​

The Blended Coffee comes in Chocolate Truffle, Caramel Dulce, Vanilla Crème and Coffee & Cream.

Don't mess with coffee routine 

Even though cans are growing in popularity, the glass bottles were an easy choice for the product, said Koch. Consumers tend to associate heavy glass bottles with indulgent, blended drinks; and associate cans more with energy drinks.

Cold brew is growing, but it still only accounts for 10% of the RTD coffee category, according to Koch. About 50% of the US RTD coffee market is made up of sweet, creamy drinks like Frappuccinos, which have the same name as Starbucks' in-store blended beverages.

The Peet's team has learned from its coffee shops that people buy the sweet, milkshake-like blended beverages frequently, but found it impossible to replicate the experience and texture of a hand-made drink in a bottle.

The flavor and the creaminess of the blended coffee can be replicated, however, which was Peet’s goal with these products. The new line is set to debut in January with a strong push in California, distributed by Keurig Dr Pepper.

“We feel like this is the most important segment of RTD and there was a huge opportunity to provide something elevated and better,”​ Koch said.

“Coffee’s such a routine, and people like it the way they like it.”​

Blurring lines between energy and coffee

Austin-based High Brew Coffee brought drinks to NACS on the opposite end of the coffee spectrum, leaning heavily into the cold brew and energy-forward trend. The company has found success in traditional grocery, but noticed its products were struggling in the convenience channel.

Mari Lee Johnson, chief marketing officer at High Brew, told BeverageDaily that it came down to pack sizes. Most energy drinks were using larger cans, with bigger and more eye-catching graphics. High Brew then created the Triple Shot drinks in 11oz cans to stand out on the shelf and appeal to the consumers.

The line comes in Original Black, Espresso and Vanilla Bean, containing three times the amount of caffeine as a cup of coffee. After previewing at NACS last year, the Triple Shot collection went through a few packaging and formulation changes, and is just now starting to roll out to nationwide retailers this fall.

The Triple Shot drinks were made specifically for c-stores, though Johnson said they may eventually make their way to grocery and mass retail. The original High Brew coffee products include six flavors of 8oz canned cold brews like Salted Caramel and Dark Chocolate Mocha.

High Brew considers the Triple Shots to be natural energy drinks that blur the lines between energy and coffee. The team wanted to honor quality coffee without all the extra ingredients common in sweet, indulgent drinks, added Johnson.