Starbucks Taps Into Cold Brew Coffee Market

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Starbucks Cold Brew Coffee

Cold brew coffee has become a growing business in the US and Starbucks, which entered the cold brew market last year, expects it will keep growing fast enough to double in the next three years.

Starbucks has introduced Nitro Cold Brew on tap in locations in seven major cities, including San Francisco, New York and Los Angeles, as well as a line of cold brew drinks such as Vanilla Sweet Cream Cold Brew and Starbucks Doubleshot on Ice.

“For over 40 years we have perfected the craft of roasting and brewing the finest hot coffee and while we have always offered our customers new options in cold coffee, nothing will compare to the pace of flavor, craft and brewing innovation we will see in the next few years,” said Starbucks chairman and CEO Howard Schultz, in a press release. “The opportunity to create an entirely new cold coffee experience is limitless and our customers are already telling us that they want to meet us on this journey as cold coffee is now becoming a go-to drink.”

Starbucks has a solid history in the cold department to build on. In the last quarter of fiscal year 2015, the company had a 20 percent increase in its overall iced portfolio, as reported by the Wall Street Journal. In addition, Nitro cold brew is currently the second-highest selling beverage at the Starbucks Reserve Roastery and Tasting Room in Seattle.

Starbucks is not alone. Global coffee bigwigs JAB and Illy along with smaller companies such as High Brew, La Colombe and Chameleon Cold-Brew are all releasing high-end pre-packaged cold brews, reports Bloomberg. Coca-Cola and Dr Pepper are also giving it a go. Other smaller specialty outfits, such as Red Thread Good and Rise Coffee, are popping up to get in on the trend.

Cold brew is totally tapping into the hipster market. “Maybe you want to have a six-pack for your picnic,” said Chermelle Edwards, creator of a blog called Coffeetographer, to Bloomberg. “You don’t go to a coffee shop and buy 10 coffees for your party, but you’ll buy cold brew. It’s like craft beer.”

Starbucks Cold Brew Coffee

Schultz compared the experience to beer as well. “It almost comes out like a Guinness beer,” he said, according to Fox.com. “These are craft products, not dissimilar to the trend of craft beer.”

The trend certainly has been growing. Since 2012, the ready-to-drink coffee market in the US has had double-digit increases annually. Euromonitor International predicts the market will reach close to $3.6 billion in the next four years.

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