As demand for cold brew coffee continues to grow, many brands have focused on single-serve innovations to gain a foothold in the category. Minnesota-based Bizzy Coffee, however, believes it can make bigger long term gains as a fridge staple rather than playing me-too in the grab-and-go set.
Last week, Bizzy Coffee launched a line of multiserve ready-to-drink coffee which will roll out this month into Target and HyVee stores. The unsweetened organic cold brews are available in three varieties — Light Roast, Medium Roast and Dark Roast — and will retail for $5.99 per 48 oz. bottle.
Speaking with BevNET, Bizzy co-founder and CEO Alex French said the line is intended to serve as a middle ground for mainstream coffee consumers, filling white space between the “ultra premium” pricing of competing multiserve coffee brands such as Chameleon and less expensive competitors such as STOK. French also noted that “quality perception” matters in the space, as many consumers view lower priced products to be inferior, a notion which Bizzy hopes to dispel through colorful packaging and branding.
“There is a massive price gap and there’s this pent up demand for a slightly better product, but many consumers are not ready to trade up for a 300% price increase on a per ounce basis,” French said. “So that’s where we see a large gap in the market and we have been able to show that we can fulfill orders on time with the right quantity and scale quickly, because we have the manufacturing capabilities.”
According to French, Bizzy chose to develop the RTD line around its existing line of ground coffees and focused on unflavored options. Citing internal data, French said 85% of consumers choose to put cream and/or sweetener in their coffee and prefer a customizable black base over pre-flavored options.
Bizzy’s other coffee products are available in about 1,000 retail stores nationwide and are available online through Amazon and direct-to-consumer ecommerce. The company also operates a B2B private label arm. French said the company has an aggressive retail expansion planned for 2020 which will focus on the conventional grocery channel and is in discussions with multiple chains. As well, the company has partnered with UNFI to distribute its new RTD line.
The multiserve line, however, is not Bizzy’s first foray in RTD products. In 2017, the company released a line of 2 oz. coffee shots, including vanilla and caramel flavors. According to French, Bizzy discontinued the shots in 2018, in part due to well-capitalized competition from fellow coffee shot maker FORTO — a company which was able scale rapidly by partnering with Keurig Dr Pepper — but also because of a myriad of logistical issues associated with the market for single serve beverages.
“Single serve is really hard,” French said. “It requires significant capital and investment just to make sure your product’s on the shelf, that no one’s stealing your space and that your tags are up…. Creating a shelf-stable single serve shot with those components is very complex from a manufacturing perspective and we basically did a cost analysis for producing those products and the math just didn’t add up for us.”
French added that he believes a “shakeout” in the single serve coffee space is on the horizon, and that, despite strong category growth, tough competition has made it harder for small brands to break out. Single serve coffee brands not only compete with fellow RTD players, he said, but cafes as well. He noted that many grocery stores have coffee shops within them and that consumers looking for a midday pick-me-up are more likely to gravitate towards a fresh offering than canned and bottled options.
“Consumers today want more craft offerings but they’re limited,” he said. “It’s similar to craft beer where people will want variety in their coffee base and be able to mix and match however they choose. So we’re aiming to win on quality and taste. Coffee is such an emotional thing and that’s been lost a little bit with the iced coffee brands.”