Video: Eyeing Sweeter Demand for Indulgent Coffee, Ito En Doubles Down on Jay Street

Though cold-brew is certainly one of the most talked about trends in ready-to-drink coffee, there’s no question that the category remains the domain of Starbucks’ succulent set: those milky and sweet drinks that Americans have grown up on and come to expect from bottled coffee products.

It’s that expectation of indulgence from RTD coffee that led the formulation of Ito En’s Jay Street Coffee, a brand that the company launched at the 2013 National Association of Convenience Stores (NACS) show in Atlanta. Brewed with medium-roasted Arabica coffee beans and blended with cane sugar and rBST-free skim milk, the beverages are packaged in 16.9 oz. bottles, contain 90 calories per 8 oz. serving and no fat. The drinks are positioned to appeal to bottled coffee consumers who are seeking a slightly healthier alternative to other options on the market.

However, it was clear that some consumers sought a creamier, thicker option similar to that of the familiar taste and mouthfeel of Starbucks’ Frappuccino products. As a result, Ito En extended the Jay Street brand with an “Extra Rich” sub-line, one that the company launched last month at the 2014 Natural Products Expo East.

Sweeter and denser that the primary line, the Jay Street Extra Rich coffees are packaged in 9.1 oz. bottles, and at 150 calories per package, Adam Hertel, Ito En’s vice president of sales for grocery and natural, views the drinks to be, like the flagship products, a healthier option for consumers.

“One of the things that we’re really capitalizing on is that it’s zero-fat.” Hertel said. “We’re using skim milk; we’re not using whole milk, so the calorie count, especially per ounce, is substantially lower.”

While on-trend from a perspective of sustained consumer demand for better-for-you beverages, Ito En, much like other coffee marketers, faces a category that is virtually owned by Starbucks. Based on sales data provided by IRI, a Chicago-based market research firm, Starbucks, which is partnered with PepsiCo for distribution of its drinks, holds over 98 percent market share of the bottled coffee segment.

Nevertheless, Ito En has a successful first year with Jay Street, Hertel said, and is upbeat about further growth of the brand, which also has a new coffee shot product. Packaged in a 6.4 oz. steel can, the new Jay Street Coffee Shot is unsweetened and contains 150 mg of caffeine, a formulation that will likely allow for cross-placement on both the coffee and energy drink shelves.

“We’re going to allow the retailer to select where they want to position in, if they want to keep it with the Jay Street line in the coffee section as opposed to maybe even putting it in the energy cooler,” Hertel said. “It could go both ways, depending on the retailer’s wishes for where it’s merchandised,”

In this video, filmed at the Ito En booth at the NACS show, Hertel goes into further detail about the line extension as well as that of its Teas’ Tea brand, which added four new products to its line-up, including a couple organic varieties, a first for the company. Hertel discusses the introduction of the products with regard to increased demand for organic beverage as how they will fit into the company’s portfolio. Finally, Hertel addresses the opportunity made available by declining CSD sales, and how Ito En plans to take advantage of consumer shift away from soda consumption.