The Rise Of RTD & Cold Brew Coffee

TJ Grant
December 2, 2020

Today, the global ready to drink (RTD) and cold brew coffee industry is booming. It is one of the fastest-growing food and beverage sectors in the world, and in recent years, some of the coffee sector’s largest players have announced their intent to capture their share of the market.

It’s clear to see why: consumption of cold brew increased by 40% over the last five years, and sales of iced drinks in 2018 came close to £400 million in the UK alone. Cold brews, iced coffees, and RTD beverages are swiftly becoming one of the most popular ways to consume coffee, and this meteoric growth shows no signs of slowing down.

To learn more, I spoke with MTPak Coffee Ambassador Daniel Horbat. He told me about the extraordinary rise of RTD and cold brew coffee, and about how businesses can sell their own products using sustainable packaging.

See also: Roasted Coffee Packaging: The Different Bags You Can Choose From

When Did RTD And Cold Brew Become Popular?

Cold brew coffee is typically made by soaking coffee grounds in water at or below room temperature for up to 24 hours. The slow infusion produces a smooth, sweet-tasting drink by extracting all of the soluble flavour compounds in the coffee. Generally, the ground coffee used is a very coarse grind size, as the coffee is in contact with the water for such a long period of time.

Although a new concept in today’s coffee sector, cold brew coffee was actually popular among 17th-century Japanese sailors, who were introduced to it by Dutch traders from Indonesia. Despite this, cold coffee consumption has only really soared in popularity over the last few years.

Millennials are largely responsible. Sales of cold brew coffee rose 80% between 2017 and 2018, and market reports show that millennials have been consuming almost 100% more than older generations. 

The rise of the cold brew craze has also been driving the RTD market in no small way; as cold brew coffee doesn’t need to be kept at a certain temperature for consumption, it can be chilled, sealed, and preserved for an indeterminate period of time.

Daniel Horbat is the founder of Sumo Coffee Roasters, a start-up roastery based in Dublin. He opened his roastery in 2020 after winning the World Cup Tasting Championship the year before, and tells me that the convenience of RTD and cold brew coffee is what makes it so attractive.

“You can grab a cold brew coffee off the shelf, and you’re ready to go,” he says. “There are different flavoured and sweetened cold brew brands in nearly every supermarket, and they’re popular in coffee competitions too. I used a cold brew when I competed in the London Coffee Masters back in 2018.”

Daniel also tells me that the popularity of cold brew and RTD coffee among younger audiences have signalled an overall increase in quality.

“Cold brew single-origin that brings out the flavours and aromas specific to that coffee-growing origin have become increasingly popular,” he explains. “More businesses are moving towards specialty coffee in cold brews, which often means a fairer price to the farmer. 

“If it continues going this way, it will eventually lead to greater sustainability within the industry.”

Why Offer RTD And Cold Brew?

One of the most appealing qualities of cold brew and RTD coffee is that they offer businesses access to a wider range of consumers, principally by selling through supermarkets and small grocery stores. 

In one survey, over 50% of Generation Z consumers said they had purchased iced RTD coffee drinks from stores rather than coffee shops. This staggering percentage demonstrates the importance of coffee businesses considering the retail market.

“Attracting a different market, increasing revenue, offering a product with a longer shelf life, having a refreshing option for the summertime – there are numerous benefits involved with RTD and cold brew coffee,” Daniel says.

An Increase In Packaging Waste?

However, with the rise of RTD coffee and cold brew, the coffee industry faces another challenge: waste. A large number of RTD coffee beverages are single-serve, and single-use bottles of cold brew are not uncommon on supermarket shelves in coffee consuming countries.

With more than 60 million plastic bottles going to landfill or incinerators every day in the US alone, single-use cold brew packaging could exacerbate the problem.

“We are more and more self-conscious about the potential damage to the planet, so as consumption increases, we are also looking for environmentally friendly packaging solutions,” Daniel tells us.

He says that by using sustainable, environmentally-friendly products like this, along with making other key changes, coffee businesses can appeal to the RTD market in a sustainable way.

“Every little helps,” he says. “Whether that’s avoiding plastic straws, giving discounts to customers who use their own cups, or using biodegradable packaging.”

Sustainable Packaging Solutions For Cold Brew and RTD

Today, more than two-thirds of 18 to 34-year-olds in the US consume single-serve RTD coffee beverages, which means it’s essential that the sector invests in more sustainable packaging options for RTD and cold brew beverages. “MTPak Coffee are doing their part to keep the planet safe, which includes offering recyclable options,” Daniel says. 

Our shaped pouch in particular is a great sustainable packaging option for cold brew and RTD coffee beverages, with a spout that ensures it can be enjoyed anywhere as a resealable drinking vessel.

The pouch can be designed for a range of different volumes and weights, even allowing for coffee concentrate products that can be diluted by the user to taste. It also features high-barrier packaging options to protect its contents. Compostable and recyclable options are additionally available.

It is important to note that when deciding which companies to buy from, younger generations tend to favour businesses who have outlined their commitment to environmental responsibility. 

A 2017 Cone study on corporate social responsibility (CSR) said that 88% of consumers “will be more loyal to a business that supports social or environmental issues”, while 87% “would buy a product with a social or environmental benefit if given the opportunity”. The study also concluded that millennials were the most communicative about the social and environmental benefits of the products they purchased.

As a result, by selling RTD and cold brew coffees using sustainable packaging, businesses are able to simultaneously address two rising consumer trends: the popularity of cold brew, and the push for a more ethical and environmentally-friendly coffee industry.

There’s no doubt that consumer interest in the cold brew and RTD coffee market is huge. Its growth has only been highlighted by the fact that some of the world’s largest coffee chains have entered the market in the past few years; it will undoubtedly continue to be a key part of the ever-changing specialty coffee sector.

If you’re looking for a new and innovative way to package a cold brew or RTD product that meets customer needs while outlining your commitment to sustainability, get in touch. Our team will be able to support you in finding a product that appeals to every kind of consumer.

For more information on our RTD and cold brew packaging products, you can contact our team here or learn more about our shaped pouch here

Photo credits: Fil Al, Marco Arment

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