The RTD coffee category in the US has been primarily refreshment and indulgence based for most of its history, with creamier, flavoured blended coffee drinks – popularised by the Starbucks Frappuccino style – leading the category. The bottled Frappuccino and similar cold, highly sweet latte products remain the primary source of overall volume on US retail shelves, mirroring foodservice menu preferences, although coffee styles with higher levels of caffeine and a more direct functional, energy-boosting proposition were the overwhelming source of growth in 2021.
Cold-brew coffee remains the dominant style of packaged RTD coffee in the premium, craft tier of the RTD coffee category. In the US market, cold-brew production techniques are an important signifier of both coffee quality and brew strength for US consumers, with a perception (although not always accurate) that cold-brew styles offer more caffeine per serving than traditional iced coffee, while minimising the bitterness associated with hot brewed iced coffee.
The RTD coffee category in the US has historically been highly consolidated with low private label penetration, with Starbucks (distributed by PepsiCo) leading the category and the top five brand owners accounting for 94% of off-trade volume as recently as 2017. However, this concentration is rapidly starting to change, as new styles and regional brands expand distribution and conventional retail channels dedicate more shelf space to premium cold coffee.
The RTD coffee category is particularly dependent on the performance of café and coffee specialist foodservice channels. Both cold-brew and nitro-style production techniques were popularised in the foodservice channel, educating consumers and building interest to allow for off-trade growth.
The popularisation and rapid growth of plant-based dairy alternatives across US grocery, including nut milks, pea milks and oat milk, will impact RTD coffee innovation. In early 2022, leading player Starbucks (distributed by PepsiCo) announced the launch of Starbucks Frappuccino with Oatmilk, the first dairy-free launch from the brand in the Frappuccino style.
RTD coffee product claims will become more ambitious, as producers explore consumer need-states beyond energy. Caffeine and L-theanine are two of the best-understood nootropic ingredients that exist and are naturally found in hot beverages.
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Includes packaged ready-to-drink coffee, consumed either hot or cold, made using a base of either brewed coffee or coffee extract. Excludes all coffee flavoured milk drinks that primarily target children, or where coffee is one of a number of flavours within the brand range. Leading brands in off-trade volume include Georgia, Nescafé and Suntory Boss.See All of Our Definitions
This report originates from Passport, our RTD Coffee research and analysis database.
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