Cold Coffee Market

Based on Product Type, the Cold Coffee Market has been segmented into Ready-to-Drink (RTD) Cold Coffee, Cold Brew Coffee and Iced Coffee. The Ready-to-Drink (RTD) Cold Coffee segment accounted for the largest market share of 40.9% in 2024 and is likely to register a CAGR of 17,25% during the projected period. Whereas the Iced Coffee segment will likely register the highest CAGR of 17.35% during the projected period. Ready-to-Drink (RTD) cold coffee has emerged as a prominent segment in the global coffee market, driven by consumer demand for convenience and innovative flavors.

The increasing pace of modern lifestyles has significantly contributed to the popularity of RTD coffee, allowing consumers to enjoy their favorite beverages on the go. A key example of innovation in this space is Tata Consumer Products' launch of Tata Coffee Grand Cold Coffee in October 2024. 

This product features three globally inspired flavors—Swiss Caramel, French Vanilla, and Belgian Chocolate—catered to consumers seeking a rich coffee experience in a convenient 180 ml can. Priced affordably at INR 70, it exemplifies how brands are tapping into the demand for premium yet accessible RTD coffee options. The flavor variety available in the RTD segment is vast, including popular choices such as mocha, caramel, and hazelnut. Companies are also responding to health-conscious trends by creating low-calorie and functional drinks infused with vitamins and antioxidants.

Vanilla iced coffee is especially favored in countries like Australia, Canada, and Bulgaria, where it ranks among the top cold coffee choices. For example, the iced vanilla latte has become a staple in many cafés worldwide, blending espresso, milk, and vanilla syrup to create a refreshing yet comforting drink. 

Starbucks and Tim Hortons have leveraged this flavor's popularity by offering variations like Vanilla Sweet Cream Cold Brew, which combines the richness of cold brew coffee with the subtle sweetness of vanilla cream. The appeal of vanilla extends beyond traditional café menus into ready-to-drink (RTD) products. Brands like Califia Farms and Dunkin' have introduced RTD vanilla-flavored cold coffees in convenient packaging, catering to on-the-go consumers. These products align with the growing demand for portable beverages among millennials and Gen Z, who prioritize convenience and flavor variety. 

Vanilla’s versatility also makes it a favorite for customization. Consumers often enhance their vanilla cold coffees with additional flavors like caramel or hazelnut or opt for dairy-free alternatives such as almond or oat milk. This adaptability aligns with modern trends emphasizing personalization and dietary inclusivity.

The economy category includes various products, from ready-to-drink (RTD) options to iced coffee blends available at cafés and convenience stores. 

One of the driving factors behind the popularity of economy cold coffee is the growing trend of affordability without compromising quality. Many brands have recognized this demand and have introduced budget-friendly cold coffee options that maintain a decent flavor profile. For instance, major chains like McDonald's have successfully leveraged this trend by offering their McCafé Iced Coffee at competitive prices, making it accessible for a wide range of customers. In 2024, McDonald's reported a 15% increase in iced coffee sales, largely attributed to their economical pricing strategy.

Convenience stores also play a crucial role in the economy segment of cold coffee. These retailers often provide a selection of iced coffee beverages at lower price points compared to specialty coffee shops. For example, brands like 7-Eleven have introduced their own line of iced coffees, priced affordably to attract consumers looking for quick and inexpensive caffeine fixes. 

Research indicates that approximately 79% of consumers under 35 typically purchase iced coffee at least once a week, showcasing the strong demand within this demographic. One of the key factors contributing to the popularity of cold coffee among Millennials is their inclination towards artisanal and gourmet beverages. About 62% Millennials consume coffee daily and Willing to pay more for ethical sourcing. The rise of "fourth wave" coffee—characterized by a focus on quality, sustainability, and unique flavor profiles—has resonated deeply with this generation.

For example, brands like Blue Bottle Coffee and Stumptown Coffee Roasters have capitalized on this trend by offering premium cold brew options that highlight single-origin beans and innovative brewing methods. These brands appeal to Millennials' desire for high-quality, ethically sourced products that offer a distinct taste experience.

As cold coffee continues to gain popularity, establishments are adapting their menus to cater to a diverse clientele seeking refreshing and flavorful alternatives to traditional hot coffee. One of the standout trends in the foodservice industry is the rising demand for cold brew coffee. Cold brew has become a staple offering in many cafés and restaurants due to its smooth flavor profile and lower acidity compared to hot brewed coffee.

 According to recent reports, mentions of cold brew on menus have increased by 36% year-over-year, reflecting its growing acceptance among consumers. This trend is particularly appealing to younger demographics, with 79% of consumers under 35 purchasing iced coffee at least once a week, showcasing the beverage's year-round appeal. Major coffee chains like Starbucks have capitalized on this trend by expanding their cold coffee offerings. Starbucks reported that cold beverages now account for approximately 75% of its total beverage sales, underscoring the shift in consumer preferences towards chilled options.

Their innovative drinks, such as the Iced Brown Sugar Oatmilk Shaken Espresso and various cold brew concoctions, have been designed to attract customers looking for unique flavor experiences. Rise of specialty coffee has influenced the foodservice sector significantly.

The convenience provided by supermarkets and hypermarkets is a significant factor driving the growth of cold coffee sales. 

Consumers appreciate the ability to purchase ready-to-drink (RTD) cold coffee alongside their regular grocery shopping, which enhances the overall shopping experience. These retailers often engage in promotional activities, such as discounts and special displays, which further encourage purchases. For instance, a recent promotion by a major supermarket chain featured a buy-one-get-one-free offer on popular cold brew brands, resulting in a noticeable spike in sales during the promotional period002EMoreover, supermarkets are increasingly stocking innovative products that cater to health-conscious consumers. 

Many brands are now offering cold brew options that are organic or infused with functional ingredients like adaptogens and vitamins, aligning with the growing trend towards wellness-oriented beverages. A notable example is Califia Farms, which has introduced a line of dairy-free cold brew coffees available in supermarkets across North America, appealing to both vegan consumers and those seeking healthier alternatives. The rise of e-commerce has also influenced supermarket strategies, with many retailers enhancing their online presence to accommodate changing shopping habits. This shift allows consumers to conveniently order their favorite cold coffee products for home delivery, further expanding market access.