Dive Brief:
- An increasing number of beverage manufacturers are expanding into the ready-to-drink coffee and tea category, according to Food Business News.
- Smaller entrepreneurs who are savvy about telling a hand-crafted story about their innovations are positioning brewed beverage concepts as a healthful alternative to traditional sugary beverages and experiencing sales gains.
- The global RTD coffee and tea market is estimated to grow from $71.4 billion in 2015 to $116 billion by 2024, an increase buoyed by millennials, according to Grand View Research, Inc.
Dive Insight:
The influx of cold brew choices has many manufacturers fighting for refrigerated shelf space. Retailers may still be somewhat wary of devoting too much space to the ready-to-drink coffee and tea drinks, which take away from timelessly popular juice and fruit drinks.
However, if sales continue to rise—and the latest numbers show the segment is expected to grow 62% in the next eight years —these products will squeeze others out of that space, just as those fruit drinks did to carbonated beverages years ago.
More health awareness and higher disposable incomes are pushing sales of RTD coffee and tea to new heights. Grand View Research found RTD tea was the dominant product segment, with a projected demand of more than $84 billion by 2024, which analysts think will be driven by iced tea.
The trend is apparent to most manufacturers. The Coca-Cola Co. is one of the last to jump on it, with plans to grow its Gold Peak brand of iced teas in 2017, and also release new offerings like tea lattes and cold-brew coffees.