Trends and Prospects for RTD Coffee in the US

By Eric Penicka, Research Analyst, Euromonitor International


In recent years, RTD coffee has been dramatically redefined by beverage manufacturers through the advent of cold brew coffee. Cold brew coffee is coffee brewed without heat, with coffee grounds steeped for several hours to extract flavor and caffeine. The end coffee is one which is naturally sweeter, less acidic, more caffeinated and ultimately more artisanal. This kind of coffee is different from traditional iced coffee, which is hot brewed coffee, iced or chilled, and in most cases sweetened and mixed with dairy.

While currently cold brew coffee is typically offered in on-trade establishments (which Euromonitor International would capture under fresh coffee beans consumed in the on-trade), coffee beverage manufacturers have been quick to identify the trend and produce cold brew coffee for RTD consumption. While still nascent, the dust surrounding RTD cold brew’s explosion has slowly begun to settle, with brands such as Stumptown, Califia, and High Brew emerging to define this new niche.

Despite premium RTD coffees in the form of cold brew coffee having placed considerable upward pressure on average unit price, in 2016 unit price growth was just 2% in current terms – or a mere 1% when adjusted for inflation. A 4% current value decline in the average unit price of Starbucks Frappuccino, the best-selling RTD coffee brand in the US, along with several other leading brands, served to considerably offset the impact of premiumisation, according to Euromonitor International.

Over the 2016-2021 forecast period RTD coffee’s volume sales growth is expected to slow, with the category set to record a compound annual growth rate of 7%, down from the 16% compound annual growth rate achieved between 2011 and 2016, according to Euromonitor International. This slowdown will in part be a result of growth stemming from a larger base as the potential for new consumers diminishes.

However, having a stronger impact on growth will be the anticipated proliferation of RTD cold brew coffee, where package volumes are relatively small as a result of a naturally high caffeine content. In response, the five year forecast period is expected to bear witness to continuous unit price growth, an anomaly from the historic trend of near annual unit price declines experienced over 2004-2014. Hence, the category is predicted to record a stronger value compound annual growth rate of 9% at constant 2016 prices.

RTD and Hot Coffee in the US


Source: Euromonitor International

Much of the growth forecast for RTD coffee hinges on the anticipation that producers will adapt to the cold brew trend. If this does not happen, forecast growth would likely be slower as traditional RTD coffee reaches maturity. Also threatening growth will be the possibility of health trends negatively impacting RTD coffee, products which in many cases can be laden with added sugar and fat from dairy.

A focus on cold brew RTD coffee led to an influx of new products in 2016, making this the most active soft drinks category. Despite the resounding number of new launches, many have struggled to break out of local retail markets and scale production to any meaningful capacity. However, this explosive creativity and entrepreneurial spirit is anticipated to persist over the forecast period, although it is expected that in time clear leaders will emerge.

For more information from Euromonitor International’s “RTD Coffee in the US Report,” visit:


Eric Penicka joined Euromonitor International in 2014 as a US research analyst. He provides insights within the alcoholic and non-alcoholic drinks, packaging, and tobacco industries. His research includes analysis on market sizes, brand/company shares, product distribution, consumer interest and trends, and government policy. Prior to his role at Euromonitor, Eric obtained a bachelor’s degree in economics from the University of Illinois at Urbana-Champaign and spent time researching infrastructure development initiatives in Rio de Janeiro, Brazil.

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