In many countries around the world, a growing number of consumers are drinking more and more cold coffee beverages. These purchasing decisions can even transcend seasons – with cold coffee drinks becoming more popular all year-round, too.

In line with this, it comes as no surprise that in its 2023 third quarter financial report, Starbucks stated that cold drinks now represent 75% of sales in the US. In recent years, we’ve also seen similar growth in the cold coffee market segment for other large chains as well. Ultimately, this shows that coffee consumer behaviour is evolving – and this change is likely to be permanent.

At the same time, however, this leads us to ask whether there will be a similar shift in the specialty coffee sector. And if so, what does this mean for the future?

To find out, I spoke to cold brew consultant and expert Randy Anderson. Read on for more of his insight.

You may also like our article on how cold coffee beverages are changing.

Cold coffee revolution

It’s been hard to ignore the meteoric rise of cold coffee beverages in recent years. From cold brew to ready-to-drink products to cocktails, cold coffee drinks have never been so popular.

This is certainly reflected in Starbucks’ recent financial report, too. According to CEO Laxman Narasimhan, cold beverages accounted for 75% of sales in the US during the third quarter of 2023 fiscal year – reaching a record high.

Additionally, as well as the continuous popularity of cold brew, sales of the chain’s cold espresso-based drinks increased 13% year-on-year. 

Customisation has also been key to the growth of the cold beverage market segment. In its 2023 Q3 financial report, Starbucks stated that more than 60% of beverages were customised. This represents a 9% increase on 2018. Cold foam specifically was the quickest-growing customisation across all of the brand’s options, and contributed more than US $1 billion in annual revenue.

Starbucks’ cold coffee sales have been rising for some time now. However, over the past few years, we’ve also seen similar growth with other large chains.

UK coffee and food-to-go chain Pret A Manger is just one example. In February 2023, the company announced it will expand its iced beverages range – its “biggest drinks innovation in more than five years”.

Randy explains that there are several reasons for cold coffee’s surge in popularity.

“During the pandemic, RTD coffee products became very popular as more people had to stay at home,” he says. “Many consumers who would go to coffee shops or drive-thrus were buying RTD coffee from grocery stores to drink at home.

“Cold brew has grown in popularity, especially among younger demographics,” he adds. “Coffee can also be a healthier replacement for energy drinks, and can include functional ingredients such as nootropics, probiotics, mushroom extracts, and cannabidiol (CBD).”

Could we see a similar shift in the specialty coffee sector?

For many reasons, it’s no surprise that larger coffee chains have seen a rise in cold coffee drinks sales. These beverages often come with more options for customisation, as well as including more innovative flavourings and other ingredients.

Wider trends in the coffee industry certainly have an impact on the specialty coffee sector, such as the popularity of capsules and pods. And while the range of cold coffee drinks on specialty coffee shop menus is definitely broadening, will we ever see the growth of cold coffee reach levels similar to those experienced by larger chains?

Given the focus on high-quality espresso and filter coffee (especially pour overs), it’s unlikely that cold coffee drinks will account for such a high number of sales in specialty coffee shops. 

However, in recent years, an increasing number of specialty coffee brands have launched their own RTD products. Naturally, this indicates that cold coffee beverages play an important role in the specialty coffee market.

“Coffee shops are looking for ways to cut costs, including automating coffee extraction,” Randy explains. “Additionally, many now offer high-quality in-store RTD products like bottled cold brew.”

Some prominent examples of these companies include:

• Blue Bottle Coffee, which is known for its canned cold brew
• Stumptown Coffee Roasters, which sells cold brew and RTD lattes
• Recently acquired La Colombe, which manufactures and sells draft lattes. These beverages even captured a 1% share of RTD coffee sales in the US grocery category a year after being launched

“One of the most exciting emerging trends I’m seeing is smaller specialty coffee shops and roasters developing and manufacturing their own RTD products,” Randy says. “This gives them the ability to maximise profits by reducing the cost of goods sold.”

A push for further innovation

The cold coffee beverage segment is one of the most dynamic and exciting markets in the coffee industry, with constant innovation driven by many different consumer trends. 

In line with this, it’s likely that specialty coffee businesses will follow a similar trajectory to larger coffee chains. Ultimately, they need to keep focusing on ways to diversify their cold coffee offerings.

If not, specialty coffee shops and roasters risk being left behind. Consumer demand for cold beverages is only continuing to grow, so specialty coffee brands need to stay ahead of trends to remain competitive.

Moreover, considering that convenience will always remain a key purchasing factor for coffee consumers, capitalising on the RTD cold coffee segment is essential for many specialty coffee companies.

The cold coffee revolution shows no signs of slowing down, so the specialty coffee sector needs to pay attention to ever-changing consumer needs, and cater to them accordingly.

We may not see cold coffee sales reach record highs in the specialty coffee sector any time soon, but the market will only continue to grow at pace.

Enjoyed this? Then read our article on exploring innovation in cold milk foam for coffee.

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