Despite being one of the smallest sectors of the global soft drinks market in terms of launch activity, coffee ready-to-drink (Coffee RTD) or iced coffee has entered a period of strong product and market activity, according to global market research organisation Innova Market Insights.

The iced coffee sector accounted for just 3 per cent of global launches recorded by Innova Market Insights in the 12 months to the end of June 2013, but growth in the sector has become more apparent, especially in the traditionally undeveloped European market. According to Innova Market Insights, in Europe, growth in the ice coffee sector has been led by chilled milk-based variants in lidded cups, rather than the more common products in cans and bottles in the more established markets of Asia and the US.

Innova Market Insights said its research showed that iced coffee is “set for further growth”, particularly in premium-style chilled in-cup lines.

“The market has particularly appeal as an on-the-go option for younger consumers, offering a sweet, indulgence-style beverage or snack,” said Lu Ann Williams, Director of Innovation for Innova Market Insights.

“The rise of RTD milky coffee drinks has offered opportunities for both coffeehouse brands to expand into supermarkets and for flavoured milk suppliers to broaden their customer base,” Ms Williams said.

Germany sees strong growth for chilled coffee

Germany, which has the largest iced coffee market in Europe, has seen strong growth in the market for chilled products, according to Innova Market Insights.

Swiss milk processor and dairy products company Emmi has been a “pioneer” in this area with its Caffe Latte range, according to Innova Market Insights. Germany is one of Emmi’s key markets, although the range is also available in other European countries and in the US. The range, which comes in a characteristic cardboard cup with a snap-on lid, now encompasses a range of flavour variants. It was relaunched across Europe in early 2013, with the 2012 limited edition Tahitian Vanilla variant becoming a permanent fixture in the range under the name Vanilla. At the same time, a new limited edition New York Caramel flavour was introduced.

The Emmi Caffe Latte range faces competition from other chilled lidded cup lines in Germany, according to Innova Market Insights. The premium dairy and ice cream brand Movenpick has a line of similar products, made under licence by dairy company J Bauer. This range was extended in 2012, with a Caffe Colombia variant sweetened with stevia. The Landliebe range from Dutch dairy co-operative FrieslandCampina was also launched in the first half of 2012.

As well as these brands, Germany and other European countries also saw the launch of Starbucks Frappuccino range, under license from global dairy company Arla Foods, as well as the Illy Issimo joint venture set up by Coca-Cola and Illycafe in 2007 to develop premium Coffee RTD products. The Starbucks Discoveries range in lidded cups has been joined by fair-trade Coffee RTD specialities (Coffee, Mocha, Chocolate and Vanilla) in 250mL bottles, marketed as “perfect for consumption on the go”.

Growth in the UK

According to Innova Market Insights, the UK has also seen a number of new entrants to the iced coffee market over the last year or so. International food and beverage manufacturer Mars launched two Galaxy branded ambient coffee drinks in lidded cups in mid-2012.

Smaller specialist brands have also been able to create space for themselves, according to Innova Market Insights. Jimmy’s Iced Coffee, launched in 2011, claiming to be the only chilled Coffee RTD made with British milk. The Company has since introduced a range of standard and more “exotic” lines, including the limited edition Gingerbread flavour, introduced in the European autumn in 2012, and a decaffeinated variant in a 330mL screw-top carton, which was introduced in April 2013.

Premium iced coffee in Australia

The growth of premium iced coffee drinks has begun to trickle into Australia in recent times. Australian Food News reported earlier in September 2013 that Lion-owned brand Dare Iced Coffee had launched a new Cold Pressed Iced Coffee product, keeping up with the trend towards cold pressed coffee in barista-made coffee.

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