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Cold Coffee Is Booming In The U.S., Canned Iced Coffee Is The Next Big Food Craze

By Andrew Galbreath
Published on: 12:15 PST, May 29, 2016

U.S. consumers are drinking more canned and bottled iced coffee than ever, according to recent reports. The new trend of drinking iced coffee – famously sold chilled and in a can – is beginning to hit the United States after being popular in countries like Japan for years.

Coffee behemoths like Starbucks, who recently signed a partnership with PepsiCo, have been putting their coffee on ice for ages and are introducing new ready-to-drink chilled bottled and canned brews. Cold cans of java are competing for space on grocery store shelves in Walmart, Kroger, and Costco. Beverage giants like Dr. Pepper and Coca-Cola are already joining in on pushing canned iced coffee. Coffee maker giants like JAB and Illy and smaller companies like High Brew, La Colombe, and Chameleon Cold-Brew are already adapting to the new demand.

Starbucks has been offering its pre-made and sugary Frappuccinos for a long time, but now U.S. coffee drinkers are demanding new artisanal offerings appealing to millennials. Blue Bottle’s New Orleans Cold Brew has gained in popularity, and soon, other companies will follow suit, according to Bloomberg.

“While sugary iced-coffee concoctions, like Starbucks’ Frappucinos, have been popular for years, baristas and coffee bars are seeing an increasing demand for more sophisticated iced espressos and lattes. Many now say they serve more cold coffee than hot — even during winter. For the fourth quarter of 2015, Starbucks reported a 20 percent increase in iced drink sales nationwide following its introduction of a new cold brew coffee in its retail stores.”

Chris Campbell, the founder of the Austin-based Chameleon Cold-Brew, added, “When given a choice, people tend to make the healthier, better-for-you choice as long as it’s within a reasonable cost premium.”

The appeal of chilled, ready-made iced coffee to Americans is undeniable. Serving hot coffee that is immediately ready to drink is simply not possible, the convenient can enables easy transportation and consumption, and the pre-made product cuts down on preparation time. Canned coffee can also be chilled and stored in large quantities for a long period of time. While many pre-made iced coffee offerings are full of milk and sugar, similar to a Starbucks Frappuccinos, many of the newer canned products are low calorie or have less sugar, which appeals to health-conscious coffee-lovers.

Canned or bottled coffee seems a natural evolution to the explosion of U.S. coffee shops in the age of big chains like Starbucks and the endless variety of independent spots. The numbers speak for themselves: the global market for canned iced coffee stood at $18 billion in 2015, and the U.S. market for the beverage has been growing by double digits since 2011. Analysts believe the American iced coffee market will reach $3.6 billion by the year 2020. There’s only one problem, according to TIME’s Money: the taste.

“Of course, there’s also a question of whether these chilled javas are that good. Michael Butterworth, of the Coffee Compass blog, told Bloomberg that the quality isn’t quite there yet. Is this a problem? Maybe not. Customers may not care, particularly. For all of cold brew’s fans, for example, the method leaves out many essential compounds and flavors that are only soluble at hot temperatures, which is why many baristas prefer the Japanese method of brewing coffee hot directly over ice.”

While canned coffee might have a long way to go in terms of matching the taste of fresh-brewed, there’s no denying that the market is there, and companies are eager to take up the challenge. The Starbucks-PepsiCo partnership, in particular, makes up 75 percent of the U.S. canned coffee market, and plans to introduce new cold brews this summer, including sweetened and unsweetened bottled coffee. La Colombe will also be releasing its canned latte later this year, a drink which is designed to foam like a latte when poured and sold 10,000 cans in the first hour when it was offered online in March.

[Photo by Fabiano Silva/Getty Images for illy]

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