06 Sep 2016 US: Coca-Cola makes a move into cold brew coffee

The new RTD beverages will feature premium ingredients like real milk and sugar and will come in an array of flavour varieties.

Coca-Cola will debut the new products in the first quarter of 2017.

Insights from FoodDive.com

It’s no surprise that Coca-Cola has assimilated into the fast-growing cold brew coffee category. What is surprising is what took the company so long.

Coca-Cola has a number of non-soda beverage types under its Venturing and Emerging Brands unit, ranging from premium milk to aloe water. But cold brew coffee was not yet among them.

Competitors had already beaten Coca-Cola in the race to being cold brew king. Starbucks partnered with PepsiCo to handle RTD grocery store-facing versions of its popular cold brew coffee beverage in June. Dr Pepper Snapple announced a distribution agreement with RTD cold brew coffee maker High Brew Coffee in April.

These agreements may have pressured Coca-Cola to make a move into the category quickly, before it was too late to establish dominance.

Cold brew coffee’s estimated category sales growth was 339% from 2010 to 2015, including 115% from 2014 to 2015, according to Mintel.

Cold brew coffee aligns with consumers’ demands for functionality and cold, convenient RTD beverages. It was only a matter of time before soda companies jumped on the trend, as they have been diversifying their portfolios in recent years to sustain top line growth as soda sales decline.

Coca-Cola may have been trying to determine the best way to introduce its first cold brew coffee product: through an acquisition, distribution agreement or under one of its existing brands.

Gold Peak is one of the US’s fastest-growing national iced tea brands. In 2014, it eclipsed $1-billion in annual sales for the first time, becoming the 20th Coca-Cola brand to do so.

Gold Peak could have the reach and recognition to pull off this new and already popular product segment.

Source: Coca-Cola Company; FoodDive.com