MILAN – The cold brew coffee market size is projected to increase by USD 519.2 million, at a CAGR of 8.4% between 2023 and 2028. Market growth hinges on various factors, notably the rising favorability of instant coffee among millennials coupled with frequent product launches, the expansion of organized retailing networks globally, and the perceived health advantages.
However, the market faces hurdles such as the increasing demand for substitute products, obstacles in distribution, and potential health concerns associated with caffeine consumption. The market in North America is driven by a strong preference for coffee, particularly in the US and Canada. Califia Farms LLC provides a diverse range of products, including yoghurt, juices, protein drinks, creamers, and coffees. Below, we report part of the analysis published by technavio. To get additional information about the market report, click here.
Market driver
The surging popularity of instant coffee among millennials and the continuous introduction of new products are pivotal drivers propelling market growth. Cold brew coffee has emerged as a preferred choice among millennials and Generation Z consumers in both the US and China, propelling the global market for this unique coffee variety. Companies such as Starbucks, Dunkin Donuts, and Nestle have identified this trend and have introduced various RTD (Ready-to-Drink) cold brew coffee products to cater to this demographic.
Moreover, Starbucks, for instance, launched the Nitro Cold Brew, Cold Brew Vanilla Sweet Cream, and Cappuccino Freddo as part of its Cold Craft range in the last three years. Millennials, with their higher spending power and increasing coffee intake, have become a significant consumer base for cold brew coffee. Hence, such factors are market growth and trends during the forecast period.
Market trends
The rising number of mergers and acquisitions as well as the opening of new chains will fuel the market and trends. The market witnesses an escalating trend with major players such as Starbucks and Dunkin Donuts introducing an array of cold brew coffee varieties and flavors to cater to the evolving preferences of millennials and Generation Z.
Moreover, in a strategic move to expand its health and nutrition portfolios, Nestle SA announced the acquisition of core brands from The Bountiful Company in April 2021. The RTD (Ready-to-Drink) beverage segment of cold brew coffee is experiencing significant penetration, with professionals opting for these beverages as a part of their active lifestyles and social standing. Hence, such factors are driving the market during the forecast period.
Market challenge
The market is thriving, fueled by a diverse array of flavors that cater to evolving consumer preferences. The market has experienced significant competition over the past three decades from various RTD beverages, including frappuccinos, mochas, espressos, and energy drinks from brands like Starbucks, Dunkin Donuts, and Nestle. Millennials and Generation Z have shown a preference for these diverse coffee varieties and flavors, which has accelerated their penetration into the market.
However, the increasing popularity of coffee pods, iced teas, and innovative flavors in the tea segments is anticipated to hinder the growth of the market. Starbucks and Dunkin Donuts, two major players in the coffee industry, have expanded their product offerings to cater to changing consumer preferences. Hence, such factors are hindering the market during the forecast period.
Market segmentation by Distribution Channel
The growing preference for the offline segment will increase the market. A Growing Industry Driven by Consumer Preference and Craft Beverages The market is witnessing significant growth, with key players like Villalobos expanding their presence through company-owned outlets. Consumers are increasingly preferring bottled drinks for their convenience and longer shelf life, which is driving the demand for cold brew coffee. Preservatives are used in the production process to ensure the drinks maintain their freshness, making them an ideal choice for retail locations. Discounts and bulk purchases are also contributing to the market’s growth, as consumers seek cost-effective options for their iced coffee needs.
Market Segmentation by Product
The market share growth by the arabica-based cold brewed coffee segment will be significant during the forecast period. Arabica Coffea is the most widely cultivated type worldwide as arabica beans have a unique taste that ranges from sweet-soft to sharp-tangy. Arabica beans have a relatively lower caffeine content than robusta beans and are ideal for preparing beverages; also, the beans are highly preferred by consumers due to their better quality. In 2020, the Arabica-based segment of the market emerged as the dominant product segment. Hence, such factors are fuelling the growth of this segment which in turn drives the market during the forecast period.
Moreover, over the same period, the global arabica-based market was moderately fragmented due to the presence of numerous regional and a few global companies. Factors such as the growing presence of organized retailing outlets that offer Arabica-based beverages and the increasing frequency of new product launches featuring the same are estimated to drive the Arabica-based segment during the forecast period.
Technavio’s analysts have provided extensive insight into the market forecasting, detailing the regional market trends and analysis and drivers influencing the market’s trajectory throughout the forecast period. A Growing Industry Driven by Consumer Preference and Craft Beverages The market is witnessing significant growth, with key players like Villalobos expanding their presence through company-owned outlets. Consumers are increasingly preferring bottled drinks for their convenience and longer shelf life, which is driving the demand for cold brew coffee. Preservatives are used in the production process to ensure the drinks maintain their freshness, making them an ideal choice for retail locations. Discounts and bulk purchases are also contributing to the market’s growth, as consumers seek cost-effective options for their iced coffee needs. Hence, such factors are driving the market in North America during the forecast period.
Key Companies & Market Insights
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market forecasting growth and analysis.
- Key Offering – Canterbury Coffee Corp: The company focuses on offering coffee in various flavors and packet sizes.
- Key Offering – Gambino Coffee: The company offers cold brew coffee in the form of various packs such as pack of 5 bottles, pack of 12 bottles, and pack of 25 bottles of cold brew latte.
The market growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about Key companies, including Califia Farms LLC, Canterburry Coffee Corp., Gambino Coffee, Gradys Cold Brew, Heartland Food Products Group LLC, HighBrewCoffee, Kohana Coffee, La Colombe Torrefaction Inc., Lucky Jack Coffee, Nestle SA, RISE Brewing Co., Rombouts Coffee GB Ltd, Sleepy Owl Coffee Pvt. Ltd., Starbucks Corp., Station Cold Brew, The Coca Cola Co., The Kind Coffee Co., Venice Cold Brew, and Wandering Bear Inc.
The market analysis and report of qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
Segment Overview
The market research and growth report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in “USD Million” for 2024-2028, as well as historical data from 2018 – 2022 for the following segments.
Product Outlook
- Arabica-based
- Robusta-based
- Liberica-based
Distribution channel Outlook
- Offline
- Online
Region Outlook
North America
- The U.S.
- Canada
Europe
- The U.K.
- Germany
- France
- Rest of Europe
APAC
- China
- India
South America
- Chile
- Brazil
- Colombia
Middle East & Africa
- Saudi Arabia
- South Africa
- Rest of the Middle East & Africa
Market analyst overview
The market is witnessing substantial growth globally, driven by various factors. With consumer awareness on the rise regarding lifestyle choices and health benefits, RTD beverages like Star Buck’s cold brew are gaining popularity. The market offers a diverse range of flavors and beans types such as Liberica, Typica, and Kona, catering to different consumer preferences.
The convenience of purchasing through Company Owned Outlets and Online Retail Stores further boosts market accessibility. Cold brew coffee is known for its anti-bacterial qualities, stress reduction, metabolism enhancement, and skin hydration properties.
Nitrogen-based cold brew coffee is particularly favored for its unique texture and flavor profile. Micro-economic factors and decision-makers’ strategies play a crucial role in shaping the market landscape. As the global cold brew coffee industry evolves, innovative products and marketing strategies continue to drive its growth through various distribution channels, including internet channels and refrigerators.
In addition, ready-to-drink (RTD) beverages are increasingly favored by consumers, offering convenience and flavor consistency. Market insights and knowledge drive strategic decisions, providing a comprehensive snapshot of industry trends.
Cold brew coffee, whether enjoyed at a cafe or from the comfort of one’s refrigerator, offers a distinct taste profile, whether it’s black, infused with dark caramel, or made from coarsely ground coffee.
Its popularity stems not only from its refreshing taste but also from its antibacterial characteristics, making it a preferred choice for health-conscious consumers. As the market continues to evolve, innovative flavors and packaging solutions cater to diverse consumer preferences, propelling the growth of the market, especially in the Middle East & Africa (MEA) region.
