Michael Schaefer
Head of Beverages & Foodservice
Euromonitor International
The fact that it’s a second-wave chain purchasing a third-wave chain, I think there’s symbolic importance there, but I also think it signals a real shift in the coffee industry in the U.S. and also the world. I think that it does have global implications.”
In the on-trade foodservice space, I think we’re seeing cold brew supplanting standard brewed iced coffee quite quickly. I think we’re seeing the same phenomenon happening perhaps at a slower rate through retail. But I think the challenge is… you have to have a brand. I think what’s happening now is seemingly every coffee shop in America is switching over to cold brew. There’s going to be so much competition in this space that I do think from a standpoint of strategy, it’s smart to snap up probably the best known cold brew brand while you can and move quickly there.
I think what’s interesting about the new wave of cold-brew products is they’re occupying a positioning that straddles where colas used to be, perhaps. A bit of that energy drink positioning; I think we see a lot of products that push that functionality, that caffeine jolt. It’s definitely a different positioning than we see with Frappachino. It’s very early to say how big this is going to get, but I think there are a lot of use cases for cold brew coffee: there’s a flavor that people are familiar with that I think positions it pretty well to take a bite out of carbonated soft drinks, energy drinks, iced tea. I think it can work in all of those spaces.
We saw it with energy drinks, we saw it with pod coffee, we see it with iced coffee now through coffee shops, a willingness to spend [a premium] every day on coffee, on caffeine, on your daily jolt. I think it’s important when looking at cold brew in particular that it’s as much a functional product as much as it is a refreshing, indulgent product. And there’s definitely been a willingness by Americans in recent years to pay for that.