When it comes to ready-to-drink coffee, convenience and energy-boosting qualities are the key drivers in the category.
However, ready to drink (RTD) coffee brands are tempting consumers with additional benefits and appealing flavour combinations.
According to Global Data, iced / RTD coffee reached in 2023 a total volume of 7.732 million litres and 37.775 million dollars in value.1
However, average CAGR (2019-2028) for volume is predicted to be at 1.52%, whereas CAGR for value is expected to settle at 3.67%.1 In other words, market value is going to greatly exceed volume rates for RTD coffee – suggesting potential for (further) premiumisation within the market.
In fact, European countries are in the top three fastest growing markets for RTD coffee consumption. With a CAGR of around 10% (2022-2023), Hungary, Portugal, and Austria were the fastest growing markets for the volume of RTD coffee sold.1 However, their volume levels are still low compared to the global leaders in RTD coffee consumption – Japan, US and China.1
Next level: Coffee flavour
As an expert in taste, esarom has detected coffee as one of the emerging flavours in the beverage and food industry in the near future.
“Coffee is one of the top three most popular beverages worldwide. Beside water and tea it is drunk the most all around the globe,” says Susanne Winter, Head of Marketing at esarom.
“With its unique and complex flavour profile we want to celebrate the all-time favourite coffee. We therefore set the spotlight in the upcoming year on it and officially announced that coffee is the 2025 Flavour of the Year.2
“These roasted and nutty tones, as well as its incredible aroma make coffee flavour more like an experience, rather than a single sensory impression. On top, coffee shows a diverse applicability within different categories,” adds Winter.
Flavour innovation
Speaking of coffee flavour, cappuccino and café latte are by far the most popular choices within the iced / RTD coffee drinks category – together with espresso, macchiato and iced coffee – these coffee types dominate 70% of all global product launches within the category in the last three years. Additional notes like chocolate, vanilla and caramel are leading among different coffee flavours.
Figure 1: Popular coffee flavours by region.3
45% of Chinese RTD coffee consumers claim that “the addition of a flavour is an important purchase factor when choosing an RTD coffee”.4 As seen in Figure 1, people show interest in RTD coffee drink variations flavoured with chocolate and caramel, looking for indulgent moments when consuming.4
An extra tip for innovation-seeking manufacturers: create an extraordinary flavour combination with coffee and:
- Ginger
- Salted Caramel
- Strawberry
- Cherry
- Orange
- Tonka Bean
Consumers drink coffee to feel energised
The popularity of coffee is indisputable thanks to its unique flavour profile and energising effect. In fact, coffee is mostly drunk for energy. Nearly 60% of French, Italian and Polish consumers say they would struggle to get through the day without drinking coffee.5
In a global survey consumers were asked: “How do you want to feel after consuming coffee?”. Over 40% replied with ‘energized’. Nevertheless, almost 20% want to be relaxed and calm after consumption and 14% are searching for a refreshment.6
Figure 2: Survey asking consumers ‘How do you want to feel after consuming coffee?’.6
Customise your coffee drink
Following the individualism-megatrend, these heterogenous needs should make manufacturers consider individual product solutions. In a global study a majority of consumers reported that food and drinks products “tailored to their needs and personality always (24%) or often (30%) influence their purchasing decision”.3
Coffee offers diversification opportunities
As already mentioned, consumers primarily choose to drink coffee for its energy-boosting properties. It is seen that RTD coffee drinks address consumers looking for alternatives to classic energy drinks to avoid sugar-intense foods in their diet.
Coffee as a treat
Data shows 18% of global consumers request calming and relaxing effects of coffee products (see Figure 2). For many people, drinking coffee represents a break, a short time-out during a busy day. Having a coffee is an indulgent treat, a moment of comfort.
The pandemic increased the longing for moments of happiness. In 2023, 63% of German consumers said moments of pleasure and happiness became a necessity for people to cope with current crisis.
Food and drinks are consumers' first choice for comfort, providing precious moments of joy. The majority of consumers from almost all continents chose chocolate as their top favourite variation when it comes to flavoured coffee.1
Coffee as a beverage to induce calm leads to the potential incorporation of CBD or adaptogens in coffee drinks, avoiding side effects such as post-coffee nervousness, anxiety or fatigue, while jumping on the trend towards more natural ingredients.
Better-for-you coffee drinks
Besides energising and relaxing there is significant consumer interest in options that provide additional benefits. 48% of coffee drinkers in the UK claimed that they would be interested in adding supplements with health benefits to their coffee.5
This mostly occurs with the addition of protein and vitamins – calcium and fiber as well, but to a lesser extent. Especially in the field of health claims, it is essential to stay up-to-date with local food law requirements, as they can vary from country to country.
Blurring boundaries between categories
Formats like pre-exercise coffee drinks or relaxing coffee-infused CSDs show how innovative product developments can become – however, their positioning as well as their ingredients makes it difficult to determine the respective category.
These innovative product developments can be challenging in terms of regulatory affairs. However it represents a huge business opportunity to tackle upcoming needs in the future (such as no sugar, or more natural alternatives) as well as improving consumers' perception of value for money. Premium products meeting consumer demand in quality and functionality are promising.
Market stats predict an ongoing value growth (exceeding volume growth), with huge potential for premium products. This includes coffee drinks that still act as energy boosters but with additional benefits such as immune support or protein – as well as natural caffeine from adaptogens. In order to remain relevant for future customers, manufacturers should consider these heterogeneous consumer insights when developing new products.
“However taste is still the number one purchase driver across all categories. It is therefore crucial to develop a flavour profile that is unique and creates incomparable taste experiences,” adds Winter.
References
1. Global Data. GlobalData Market Analyzers. Accessed June 3, 2024.
2. Esarom. Flavour of the year 2025: Coffee.
3. GlobalData 2024 Q1 global consumer survey.
4. KuRunData/Mintel. China: 1,689 internet users aged 18-59 who have drunk ready to drink coffee in the last three months. 2023.
5. Mintel. UK: 1,263 internet users aged 16+ who have drunk and bought coffee to drink at home in the last month.
6. GlobalData. 2024 Q1 Hot Topics consumer survey.
