Iced & Frozen Coffee Gains Year-Round Appeal

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Iced & Frozen Coffee Gains Year-Round Appeal


CHICAGO -- New research from Mintel reveals that the habit of having a "hot cup of joe" is changing as more consumers see cold coffee as a tasty and refreshing year-round alternative.

More than most countries, the United States has embraced cold coffee, especially in the foodservice channel. Mintel research shows that cold-served coffee went from a 19-percent share of all coffee on the menus of U.S. restaurants and coffeehouses to a 22-percent share between 2009 and 2012.

Additionally, looking at just the first quarter of 2013, its share has jumped to 24 percent. This indicates that interest in iced and frozen coffee is accelerating and transcending summer-only appeal.

"Cold coffee, especially frozen-blended, has become very trendy in major U.S. cities such as New York, but it is more than just a momentary fad," said Jonny Forsyth, global drinks analyst at Chicago-based Mintel. "Its usage has been building for the last few years and actually reflects the changing tastes of the younger generation. This new cohort craves indulgence and has grown up drinking sweet-tasting, refreshing soft drinks. They are looking for this taste profile to be reflected in 'hot' beverages."

According to Mintel data, 18- to 24-year-olds are far bigger consumers of iced coffee than older drinkers, and they will almost certainly carry this habit into their middle age. While one in five U.S. consumers overall (20 percent) drink iced coffee, this figure jumps to 38 percent among those aged 18 to 24. This compares to just 11 percent for those aged 55 to 64, and 5 percent for those aged 65 and older.

Mintel's findings also reveal that:

  • 77 percent of iced coffee drinkers say drinking it makes them feel more productive at work.
  • Iced coffee is seeing its number of restaurant menu items decline as people move toward the more indulgent frozen blended coffee options.
  • Frozen blended coffees have a high profit margin, estimated at 65 percent to 70 percent.

"This cold coffee development has already filtered through to the U.S. retail market, with a number of ready-to-drink variants now available. There is also an opportunity to 'premiumize' the iced and frozen coffee sector," Forsyth noted "Although many of these products are not aimed at coffee purists, it would be wrong to assume that iced coffee is dismissed by connoisseurs."

Chicago-based Mintel is a global supplier of consumer, product and media intelligence.