Market

Cold brew gives coffee market that much-needed kick

02:36 SGT September 8, 2017
Cold
Cold brew coffee sales give baristas and coffee roasters a busy summer ahead

Deep, dark, viscous and cold — bottles of cold brew coffees are making the rounds at hipster cafés and premium retail stores. The growing popularity of this summertime drink has led coffee chains such as Starbucks and Coffee Bean & Tea Leaf to delve into the sought-after market. At a time when coffee bean sales usually decline, cold brews are giving roasters and producers a reason to rejoice.

Various styles of brewing coffee, latte art and the growing education around coffee with the rise of the café culture have in general made the coffee market quite sought after in the past years. Although cold brew has a smoother, less acidic taste and a naturally sweeter flavour, most coffee drinkers are not open to switching to cold brews due to their taste reservations, said a Mintel study.

37% of US consumers are interested in cold brew
because they enjoy trying new styles of coffee
preparation.

But the higher price point is a detractor for 9% of cold brew drinkers. And the retail sales of cold brew coffee reflect its rising popularity. Growth has been steady since 2014, but shot to popularity in 2014-2015, said Elizabeth Sisel, beverage analyst at Mintel. A research from Mintel reported that retail sales of cold brew reached an estimated US$7.9 million in 2015, increasing 339% since 2010.

And while cold brew is becoming the iced coffee drink of choice among consumers in the US, it remains a small part of the overall ready-to-drink (RTD) coffee segment, making up just 0.4% of estimated sales in 2015.

A laborious production process and longer brewing time has, in fact, made the cold brew a more popular choice over the classic ready-to-drink (RTD) coffee beverage.

In addition, a lot more innovation is seen with cold brews in the retail sector. From new flavours to dairy and non-dairy milk additions, to even functionalities and crossover products, the cold brew market is ever-growing.

The ease of bottling and longer shelf life make it ideal for the supermarket shelves. According to Mintel, 24% of consumers currently drink retail-purchased cold brew coffee. Older millennials, aged 29-38 (55%), and men (30%) stand out as groups most likely drinking this type.

The cold brew sub-segment is brimming with possibilities, and ingredient suppliers including Virginia Dare, Synergy Flavors, Flavorchem, S&D Ingredients, Bell Flavors & Fragrances and ADM are treading towards innovations in this path.

Nitrogen-infused coffees are highly popular as it provides a smoother, foamy texture like that of some craft beers. Mintel research said more than one in 10 coffee consumers would purchase bottled/canned nitro coffee. The recent launch of nitro cold brew by Starbucks across 16 markets globally, with an aim to reach 26 more by end-2017, clearly rides on the popularity of this beverage.

Market penetration for cold brew rose to 21% in 2017 among those drinking coffee daily in the US, up from 15% in 2015, according to data from the New York-based National Coffee Association. An evolution from the days of coffee-chain Frappuccino’s, cold brew is capitalizing on the marketing and rising popularity of specialty coffees. Various brands including Dunkin’ Donuts are churning out varieties such as cups infused with nitrogen that feels like an adult-beverage.

According to Mintel, 44% of US consumers wish they could add healthful ingredients such as vitamins and minerals to their coffee- and tea-based drinks at foodservice, while 42% of consumers would like to see added nutritional benefits in coffee at retail such as probiotics, vitamins and minerals.

IS COLD BREW BETTER?

  • Cold brew has a lower acidity level. As boiling water is not running the show, the grounds are not the subject of heat, and therefore the chemical profile of the brew is different.
  • The difference is lower acid and a smoother cup full.
  • The taste difference is noticeably sweeter, no matter what your coffee bean choice, as it is made at room temperatures using cold water. Without the heat, the extraction of oils that occurs in hot brew is avoided, and that makes the product taste sweeter.
  • Caffeine is most soluble, and therefore extracts most easily at high
    temperature, but cold brew uses a higher bean-to-liquid ratio and the resultant brew is more concentrated. Thus, it is suggested to consume cold brew with cream to tone it down.
  • The best thing is that a cold brew does not need to be diluted with ice for a cold drink, thus retaining the original taste.
  • While hot coffee takes 6oz-7oz (170g-200g) of beans to make a gallon of hot coffee, cold brew needs 454g, so the cost of each cup is higher but the brew is a lot richer.

 

THE NEXT BIG THING
Cold brew has paved the way for Cold Cocoa. It essentially follows the same principles and recipes as cold brew coffee, except instead of ground coffee that sits with filtered water at room- or refrigerated-temperatures for a given amount of time, it is typically ground cacao nibs — the fermented, dried bits of cacao beans. The resulting beverage is not overly sweet and milk-laden like traditional hot cocoa, rather it is more nuanced and subtle. Enjoyed just by itself out of a bottle or used as a base for cocktails or mocktails, cold brew is slowly gaining ground.

Increased attention to potential health benefits of specialty drinks and rich nutrient of cocoa has actually turned the spotlight on cold brews. Mintel Global Food and Drinks analyst Alex Beckett wrote in her recent analysis: “The tea and coffee markets have each successfully made the jump from hot to cold drink, the former most
recently with the cold brew and nitro
coffee trends. Now, cocoa may be
braced to make a similar transition into
the chilled drinks fixture.”

Beckett said in her analysis that cocoa is well known to be high in theobromine, an alkaloid and stimulant that has been shown to dilate blood vessels and potentially decrease blood pressure or positively affect mood while acting as a diuretic and stimulant that can have the same kind of potential negative effects associated with caffeine.

Cold Cocoa is not overly sweet and milk-laden like
traditional hot cocoa, but more nuanced and subtle.

Although cold-brewed cocoa is not yet available in retail, it has emerged in some artisanal coffee parlours and chocolatiers. Some recipes use cacao nibs, while others use plain cocoa beans. According to reviews, it tastes less acidic than its coffee counterpart, yet is similarly nuanced, nutty and has the faint flavour and aroma of chocolate.

Cold brew may still be a niche concept, but the launch of Starbucks’ Cold Brew Cocoa & Honey drink into select stores in the US is expected to propel this trend.