Since the mainstream establishment of coffee culture’s second wave, coffee shops and cafes have been the go-to destinations for out-of-home coffee consumption. At the end of 2024, the out-of-home coffee market was valued at $39.26 billion, and forecasts suggest it will exceed $47 billion by the end of 2029. 

Over the past two decades, as coffee’s third, fourth, and fifth waves have taken root, matured, and developed, out-of-home coffee has broadened to encompass a wider variety of beverage types, consumption locations, and consumer habits. 

Ready-to-drink (RTD) coffee is one such example. As quality, technology, and consistency have improved due to the innovative progress of the coffee industry, convenient coffee is fast becoming a preferred option, especially among highly discerning younger shoppers. 

In 2025, RTD coffee will be of exceptionally high quality, which means consumers will perceive far less of a quality sacrifice when opting for a canned coffee over a barista-made one. Young people also live busier, more mobile lives, and RTDs dovetail perfectly – they can be enjoyed quickly, functionally, and while on the move. 

Tomorrow’s coffee businesses should carefully consider the purchasing behaviours and preferences of the younger generations, as they will quickly become the most powerful purchasing group. 

We spoke with Gerd Mueller-Pfeiffer, CEO and founder of International Coffee Consulting and former CEO of Nestlé’s Coffee Cluster in Austria, Germany, and Switzerland, to gain more insight into the global coffee industry’s shifting preferences.

RTD coffee growth – what are the facts?

According to a July 2024 report from Technavio, the global ready-to-drink coffee market was valued at $14.92 billion in mid-year and is forecast to grow at a CAGR of 8.89% over the coming five years, exceeding $22.8 billion. 

57% of this growth is expected in North America, the world’s most developed RTD coffee market, where a high demand for convenient beverages is already well established. Nevertheless, Asia-Pacific is also predicted to perform strongly – Japan, for example, has one of the highest per-capita canned coffee consumption rates in the world. Europe and South America also show positive signs. 

The growth of RTD coffee’s popularity is also supported by the strong performance of closely related segments. RTD coffee is highly customisable – it can be prepared with specialty-grade coffee beans, brewed as a cold brew coffee product, and, of course, served cold. As a result, and as consumers increasingly seek out beverages in these three categories, RTD coffee benefits both directly and indirectly from cross-code customisation. 

Fortune Business Insights estimates that the global specialty coffee market will be worth $101.6 billion and grow at a CAGR of over 10% over the next five years. The global cold brew coffee market, meanwhile, is estimated by Fortune Business Insights to be worth $3.16 billion and grow at over 22% CAGR by 2032, the fastest-growing coffee industry segment.

We asked Gerd if he agreed with the statistics.

“Yes, for sure,” he says. “The significant growth geographies will be where the younger and rising populations are, in markets like Asia, the Middle East and LATAM. 

“I expect that North America will continue growing – I expect a substantial growth here over the next 10 years.”

Data from the largest multinationals indicate general cold coffee growth. Starbucks reported that 75% of the beverages it sold in 2023 were served cold. At Tim Hortons outlets across Canada, 40% of the coffees ordered were iced. Both chains boast varied menus that include nitro cold brew, iced caramel macchiato, frappés, and more. 

Thus, the evidence for sustained RTD coffee growth is well established. In September 2022, Sucafina’s Ready-To-Drink Coffee Report estimated that over 200 RTD coffee products were on the market in the United States. In 2023, the same number was launched in Europe alone. 

Data from Mintel suggests that younger generations, especially Gen Z, are ‘significantly more likely’ to drink RTD coffee than traditional hot-brewed coffee. 

“We’re seeing a general shift as cold coffee becomes more of a part of the youth routine,” adds Gerd. 

“Two out of three young people choose RTD and cold coffee regularly, driven by the variety of tastes available. According to the research, one out of three cups is incremental and sourced from other beverages and snacking behaviour.”

Why is RTD coffee growing at such a healthy rate?

The fastest-growing segments of the coffee industry all align with RTD coffee development. As consumers continue to seek convenient coffee options that align with their lifestyles but refuse to compromise on quality and flavour, modern RTD products are ideally positioned to grab market share. 

Price, convenience, and quality have long been the key purchasing drivers of coffee consumers. More and more, RTD seems to be able to outcompete any other options. 

Competing on price

During the COVID-19 pandemic, the coffee shop industry was subject to significant pressure as consumers became far more scrupulous over their habitual caffeine spend. Since then, rising inflation and cost-of-living crises in multiple markets have placed further strain on the sector, especially when combined with record coffee prices.

In Ireland, for example, 80% of consumers reported preferring to make their hot beverages at home as a direct result of the cost of living crisis. In Germany, more than half of coffee consumers purchase their coffee from outlets other than coffee shops. 

The reality of the coffee shop is that the price of a cup of coffee reflects numerous other factors, including labour costs, rent and taxes, and equipment spending. Consumers were nevertheless willing to spend more on their cup of coffee in return for the highest-quality beverage. As high-quality RTDs have become more available, an increasing number of shoppers – especially young ones – are opting to get their caffeine fix elsewhere and for less. 

Intelligentsia, for example, retails its premium flash-chilled coffee in a canned form on its website – $48 gets you 12 cans, $4 a serving. In-store, it will cost you $6.50, and a nitro cold brew will set you back $7. 

Starbucks sells its cold brew concentrate on Amazon.com for just $11 for a 32-oz bottle. This will create five servings or less than $2 per glass. The same drink in-store will cost almost $5.

According to AHDB, younger consumers are usually more price-conscious than older generations. Factoring in the cost of living crisis felt in many global markets and hitting younger generations particularly hard, they are increasingly likely to choose RTD formats from their favourite brands given the lower cost.

Convenience and quality

Young people tend to live busier, fast-paced, on-the-go lifestyles due to myriad factors, including the rise of remote working, the impact of health and wellness trends, and general globalisation. 

Just as takeaway coffee became the convenient choice for the Boomer and Gen-X generation on their daily commutes to the office, RTD coffee has become the most suitable way for Gen-Z and Millenials to get their caffeine fix at their home desk on the way to the gym, or while travelling. 

Add in the increased availability of high-quality coffee options from new channels, like convenience store fridges, supermarket aisles, or transport hub shops, and younger customers are less motivated to queue in a coffee shop or cafe. 

Instant coffee is just as convenient as RTD coffee and certainly cheaper. However, young people are more discerning when it comes to coffee quality, and instant coffee is disregarded as lower quality. Convenience is key, but quality is also essential, and cold drinks are preferred. 

Coffee brands like the ones mentioned above have identified the correct middle ground to appeal to these shoppers: replicating café or coffee shop quality at a lower price in a cold format. 

A specialty-grade cold brew concentrate or canned RTD coffee can be ordered online, stored in a home fridge, and consumed on demand, all more conveniently and cheaply than visiting a café for primarily the same experience.

Customisation and aesthetic appeal

RTD coffee is generally cheaper and more convenient for younger consumers. However, Millennials and Gen Z are the group most likely to seek customised, innovative, and alternative beverage experiences. 

In the coffee shop environment, this has translated into the popularity of the Frappuccino, alternative brewing styles, functional coffee, added flavourings, plant-based milks, and different single-origins. Until recently, such variation was available only in the most forward-thinking coffee shops – now it’s available in sleek aluminium cans or BPA-free bottles. 

When searching for ‘canned RTD coffee’ on Amazon.com or similar e-commerce websites, shoppers can find a product that almost perfectly matches their dietary preferences. Califia Farms offers both single-serve and multi-serve RTD coffee with almond milk to suit plant-based diets. Rise Brewing Co. provides a comprehensive range of nitrogen-infused cold brews for an innovative, more indulgent take on cold coffee. Super Coffee offers its customers functional benefits alongside a traditional caffeine kick. 

Coffee companies are also putting a massive emphasis on packaging design and aesthetics to compete on packed e-commerce websites, busy supermarket shelves, and uber-competitive convenience store fridges. 

Colourful, eye-catching packaging jumps off the shelf. It is well-suited to online social environments, where shoppers can share their purchases and encourage their friends and family to seek out the same beverages. 

Sustainable packaging materials, such as aluminium cans, BPA-free bottles, compostable plastics, and paper, are exceptionally popular with eco-conscious consumers. 

Businesses that offer high-quality, varied, and innovative cold coffee products in environmentally friendly packaging materials with eye-catching, thoughtfully and beautifully designed aesthetics are sure to perform well. 

Suppose you’re looking for attention-capturing ways to convert new customers, drive innovation in your local coffee space, or offer a more compelling portfolio to large retailers. In that case, Hardtank offers ten different RTD nitro coffee variations to be privately branded according to your aesthetic and brand story. 

To source your private line of RTD nitro coffee, visit our website or contact us directly.

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