Peet’s Coffee is forecasting for a cold summer.
Buoyed by an expansion of its cold-chain distribution network Coldcraft, the Emeryville, Calif.-based coffee roaster and retailer is preparing several new RTD product launches over the coming weeks to further build its brand presence across multiple retail channels. They include iced espresso drinks, a nitrogen-infused cold brew and a cold brew concentrate, which will complement the company’s line of dairy-added cold brew drinks launched last year.
Peet’s four-SKU line of iced espresso drinks gives the brand a shelf-stable rival for iced coffee products from Starbucks and Dunkin’ Donuts. Available in Black & White, Caramel Macchiato, Mocha and Vanilla Latte flavors, the dairy-added line contains 110 mg of caffeine, 100-130 calories and 10-17 g of sugar per 8 oz. can. Launching in early May, the products have a suggested retail price of $2.99.
Gretchen Koch, director of marketing and innovation for Coldcraft, said that the company had explored a shelf-stable RTD line in the past, but chose to step into the market first with cold brew, which represents about 45 percent of on-premise sales at Peet’s cafes. Iced espresso drinks account for an equal share of those purchases, and Koch said the company recognized an opportunity to migrate the offering into a CPG product.
“It’s a coffee drink, it has dairy and it has an indulgent element to it, but it doesn’t need to be nearly so laden with sugar and calories,” she said. “That’s where we really stand out; we’re not a diet drink, we’re not a light drink, we formulated it to be coffee-oriented but not too sweet.”
Koch noted the 8 oz. serving size also helps to keep sugar and calories relatively low, compared to 290 calories per 13.7 oz. bottle used for Starbucks Frappuccino and Dunkin’ Donuts drinks The slim can format will be used to target convenience stores, Koch said, but not exclusively. The line will launch nationally in May via DSD and Coldcraft, and will not be sold in Peet’s cafes.
Peet’s other new RTD innovation — a nitrogen-infused version of its Baridi Black cold brew coffee, available in 10.3 oz. cans — also takes inspiration from the company’s cafes, 25 of which currently serve nitro cold brew. The line is currently rolling out in regions serviced by Coldcraft, as well as Peet’s cafes and select national retailers, for a suggested retail price of $4.99.
In theory, Peet’s Nitro will be natural competition for nitrogen-infused cold brew from Stumptown Coffee Roasters, the Portland, Ore.-based third-wave roaster and retailer which it acquired in 2015. But Koch said she was confident consumers’ strong association with both Peet’s and Stumptown will create sufficient separation between the parent company and subsidiary. Peet’s is made from an East African blend that yields a darker roast, while Stumptown is typically lighter in style. Stumptown’s second nitro SKU — Hair Bender, a Central American blend served in the brand’s cafes — is set to launch this Summer. Both cans use Ball’s Widget Can technology.
“We have worked really closely with Stumptown from a communications standpoint as far as what we are working on, where we think each of our brands should go next, where it makes sense to separate the brands,” said Koch.
While pushing ahead on nitro, Stumptown is at least temporarily putting the brakes on its sparkling cold brew line, launched last year, after early feedback on the 12 oz. can indicated the serving size may be too large for some consumers and that flavors were too similar. According to Koch, the brand will be reducing volumes for the line in the coming months as it works on reformulating the product to create more differentiation in flavors and lower the sugar content.
All the new products will be distributed through Coldcraft, the company’s dedicated cold-chain distribution network that launched a year ago to supply RTD products from Peet’s, Stumptown and Revive Kombucha. After expanding over the past year to cover stores in California, Oregon, Washington and Nevada, Koch said the next step is to “maximize the opportunity for those three brands across all channels.” That plan includes a national launch for both the concentrate and RTD cold brew, which will be also available in a 32 oz. multi-serve glass bottle.
“2018 is all about Coldcraft, making all the West Coast work and having all three of those brands in as many places as possible and expanding the channels beyond traditional grocery and natural food stores,” she said.
Koch added that, so far, Peet’s hasn’t been significantly affected by the proposed $18.7 billion merger of Keurig Green Mountain, which is owned by Peet’s parent company, JAB Holdings, and Dr Pepper Snapple Group (DPS). The deal, announced in January, is expected to close sometime in the second quarter.
“It’s created a lot of curiosity around here,” Koch said, noting that DPS does not have its own chilled distribution system. “Assuming that it’s finalized, I think we may start to hear more rumblings about things. But right now, especially with Coldcraft, it doesn’t impact us today.”