Coffee Megatrend #7: Iced, blended coffee is the category growth leader
As the largest coffee and tea manufacturer and supplier to restaurants and convenience stores in America, we are in tune with the trends of the away-from-home market for coffee — which entails 10 billion servings annually and is growing at a 6 percent clip. In this blog series, we will walk through 10 mega trends we’re seeing in the coffee industry.
It’s probably not lost on you, but many of us have an incurable sweet tooth. Even in this era of healthy beverages there is a craving for indulgent beverages — and, we love to drink our frozen, slushy treats. Coffee would never be left out of this equation.
The next mega-trend is #7: iced, blended coffee is the category growth leader.
A few key insights about this popular beverage:
- Frozen coffee has grown 38% over the last five years — currently at about 746 million servings annually.
- In many places, frozen coffee outsells iced coffee.
- Quality is the most important criteria for purchase and the taste is why consumers drink frozen coffee.
- Consumption of frozen coffee peaks in the afternoon at the snack daypart.
- Over half of frozen coffees are served with a flavor.
With these stats, it’s no surprise foodservice chains are finding success with frozen coffee on their menus. Take, for instance, the Chick-fil-A frosted coffee story.
This product came from the franchisee-level, an improvisation using the same cold-brewed coffee concentrate as the chain’s iced coffee, paired with Icedream®. The corporate team listened to the idea and began serving Frosted Coffee as an LTO.
With this product, Chick-fil-A doubled their frozen beverage sales and experienced minimal cannibalization from the iced coffee or frosted lemonade menu items. In just four weeks, frosted coffee was named as a permanent menu item.
Foodservice “owns” frozen coffee as three-quarters of these beverages are purchased away from home, and the drive-thru is a critical factor as consumers want to drink it on the go. Overall, frozen coffee is easy to implement with low food costs and high gross profit.
With the category’s potential and upsides for operators, I think we are going to see a lot more of these decadent frappes in the future. Do you agree?
As we continue our exploration of the top 10 Coffee Megatrends, you can review the first six blog posts here, and we’ll be sharing the #8 in the series next month.