Starbucks Seizes Opportunity in Multibillion Dollar Cold Coffee Market

The coffeehouse chain expects the category of cold coffee to double over the next three years.

June 01, 2016

SEATTLE – Yesterday, Starbucks announced a new line-up of cold beverages that will become the foundation for a new “cold bar” of coffee and espresso products. This new menu focused exclusively on the portfolio of cold coffee affirms the company’s ongoing investment in the category of iced beverages coming off the successful, nationwide launch of cold brew last year in all company-owned U.S. stores. In addition to bringing handcrafted vanilla flavor to cold brew coffee, Starbucks will also debut a handcrafted Starbucks Doubleshot on Ice espresso beverage and introduce Nitro Cold Brew in select cities.

“For [more than] 40 years, we have perfected the craft of roasting and brewing the finest hot coffee, and while we have always offered our customers new options in cold coffee, nothing will compare to the pace of flavor, craft and brewing innovation we will see in the next few years,” said Howard Schultz, Starbucks chairman and CEO, in a press release. “The opportunity to create an entirely new cold coffee experience is limitless and our customers are already telling us that they want to meet us on this journey as cold coffee is now becoming a go-to drink.”

In the last quarter of 2015, Starbucks reported a 20% increase in its overall iced portfolio after the introduction of cold brew in its retail stores; Nitro cold brew is currently the second highest selling beverage at the Starbucks Reserve Roastery and Tasting Room in Seattle. U.S. iced coffee consumption has grown by 75% in the past decade and cold brew sales grew 338.9% between 2010 and 2015, according to industry experts.

Recipes for cold coffee beverages are developed by Starbucks coffee and research teams, who taste hundreds of cups of coffee to ensure the right blend, roast and brewing method in order to create the perfect flavor profile. Read more about the booming business of cold coffee in a previous edition of NACS Daily.

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