- The U.S. packaged and RTD coffee market continues to enjoy a strong buzz among convenience-seeking consumers, with the segment growing 10% year over year to an estimated $13.5 billion in 2015 and expectations to reach $18 billion by 2020, according to a new Packaged Facts report.
- The report attributes growth in the category primarily to single-serve coffee, cappuccino/iced coffee and refrigerated RTD coffee, which includes cold brew.
- More traditional segments like ground coffee and instant coffee have posted declines.
As long as coffee manufacturers continue to embrace innovation and reinvention of the category, brands can expect to see packaged and RTD coffee continue to grow. But driving much of coffee's growth and change is the concept of convenience, which is true across the food and beverage industry as a whole.
Coffee, however, seems to benefit even more than other categories in terms of convenience-related innovations translating to new sales and opportunities. Single-serve coffee exploded with the advent of Keurig-like at-home coffee maker devices. Though Keurig struggled after a few years due to environmental concerns about the waste created by single-serve packaging, this sub-segment continues to be popular, including among foodservice retailers like Dunkin' Donuts.
Cold brew and refrigerated coffee are two more significant drivers of the appeal of RTD coffee and more convenient, but still flavorful, variations. Manufacturers and foodservice retailers alike have embraced this concept as demand increased, including Starbucks' partnership with PepsiCo for a new cold brew coffee line to be sold in grocery stores. Growth is likely to come from both established brands and startups as consumers demand more varieties and ways to conveniently prepare and drink their coffee on the go.