In this article, you’ll learn:
- How on-tap cold brew systems help cafés boost profit margins and reduce labour costs
- What to consider when comparing fresh service vs. canned formats
- How to decide which model aligns best with your long-term growth strategy
Once considered a niche product reserved for specialty coffee shops, cold brew is more popular than ever in cafés. Its natural sweetness and low acidity make it a health-conscious alternative to traditional hot coffee. Global cold brew sales grew by over 22% between 2023 to 2024, and Gen Z consumers often choose cold coffee over hot drinks. So, what is the best way to serve it?
For cafés, there are generally two options for cold brew coffee service. You can offer cold brew on tap, using machines that steep and dispense cold brew, or in ready-to-drink formats like cans. But which is a more profitable model for coffee shops expanding their cold brew coffee service?
To learn more, I spoke to Tim Baggs. He is the founder of BeGOAT Clean Energy Drinks, which produces zero-sugar and cascara-based RTD drinks. Read on to see how his expertise can apply to the fast-growing cold brew sector.
Operational efficiency: Fresh brewing vs. RTD production
Both fresh service and RTD solutions are reasonably efficient for cold brew coffee service. Since they tap into different consumer touchpoints and expectations, each one can easily adapt to customer demand.
For in-house production and service, dedicated cold brew systems are the most efficient choice. These are dedicated machines that agitate coffee grounds in cold water to produce fresh cold brew quickly and consistently. On the other hand, RTD cold brew comes in pre-packaged formats like aluminium cans. They are more shelf-stable and often sourced from a private label manufacturer or prepared on-site with additional equipment.
The efficiency of each choice depends on your operational needs. Fresh cold brew systems like the Baby Hardtank are designed for large-scale fresh cold brew preparation, producing up to four litres in under an hour. This method removes the need to steep coffee grounds overnight to prepare cold brew, which is less consistent and can lead to microbial activity and contamination. The key benefits are fresher output, more control over the ingredients you use, and shorter preparation times.
Traditional RTD formats – for cold brew coffee service and other drinks – require more infrastructure and partnerships. They are often manufactured by third parties with pre-approved recipes and formulations.
This strategy minimises your in-house labour and production costs, and offers a scalable model that can expand into chains or grocery stores. “Ultimately, it depends on your business model,” Tim tells me. “It depends on your category and product.”
For dynamic service environments like coffee shops, bars, and restaurants, serving fresh cold brew on tap is the most suitable option. Machines like the Baby Hardtank speed up preparation and have automated cleaning modes, which help staff stay on top of demand for cold brew throughout the day.
On the other hand, RTD production requires significant planning, production, and investment. The process of preparing your own custom developments, testing them, and getting regulatory approval can take months. Private label solutions using pre-approved formulations are faster, but less so than daily fresh service.
Which model is best for preserving profit margins and extending shelf life?
Alongside production speed, you also need to consider which method of cold brew coffee service is more profitable and suitable for long-term revenue growth.
The profitability of your cold brew relies on two core metrics: margin per unit and product turnover. Fresh cold brew, prepared with equipment like Hardtank’s, has significantly lower production costs per litre than RTDs. For example, cafés using the Baby Hardtank report average cold brew production costs of around €0.40 to €0.60 per 250 ml serving, compared with €1.20 to €1.50 for RTD bottles or cans.
Depending on menu pricing, the return on investment in equipment can occur in as little as three to five months. Conversely, RTD production requires more consistent investment as you order additional shipments of your drinks.
That said, freshly prepared cold brew has a much shorter shelf life than RTDs – usually less than 24 hours before it develops bacteria. In RTD formats like aluminium cans, cold brew can typically last for up to 12 months.
This gives drinks brands much more control over their stock and presents an opportunity for off-premesis cold brew coffee service. Since all of your RTD drinks are prepared to the same formula, it allows for easy scalability and product consistency. It means you can easily expand your stock levels and range of retailers without compromising quality.
However, these advantages come with trade-offs. RTDs generally require higher up-front investment – not only in development and packaging, but also in storage space and refrigeration. For these reasons, private label solutions are often a more cost-effective approach.
Also, any unsold stock may expire, which could contribute to wasted capital. Therefore, drinks businesses should consider whether their existing sales volumes and future projections justify the added cost.
It’s something that Tim knows well. “RTDs can be great,” he says. “But they can also be expensive and complicated. Don’t grow your programme too fast until you know what you have.”
Which cold brew coffee service format matches consumer expectations and encourages menu innovation?
Lastly, you also need to consider which cold brew coffee service model is best suited for future expansion and growth. Firstly, though, that involves tapping into existing market demands to determine how much you can scale your operations.
In terms of cold brew coffee service, offering it on tap allows coffee shops to add a signature product. The narrative of preparing your cold brew in-house resonates with consumers, especially Gen Z and Millennials, who value authenticity and transparency.
Equipment like the Hardtank also opens the door to product innovation. You can adjust ingredients in the filter basket to make anything from iced tea to infused cold brew, expanding your menu accordingly. With one system, you maximise equipment ROI and constantly change your drinks menu without additional investment.
While RTD formats are less flexible due to longer lead times, they help businesses offer their drinks to a wider market. RTD cans can be sold in grocery stores, chains, or even in fridges at your coffee shops. It’s a level of market penetration you can’t achieve with fresh cold brew, and it appeals to consumer demands for convenient drink formats.
One approach is to use a hybrid model: offering cold brew on tap while also selling RTD formats. While the upfront cost is higher, you can capture consumers across a range of touchpoints and expand your brand awareness.
Alongside your operational needs, you should keep your budget in mind when making the decision. “Fresh service is an expensive model, and RTDs can be great, but they can also be expensive and complicated,” Tim says.
Therefore, your choice of cold brew coffee service should be driven by two factors: the suitability for your operations and the potential for revenue growth. “It can be hard, and takes a lot of time,” Tim advises. “Know and understand your niche and model.”
For most cafés, cold brew on tap is the more profitable and operationally flexible model. Brewing in-house lowers per-unit costs, allows for menu expansion, and aligns with consumer demand for fresh service. Systems like the Baby Hardtank allow you to scale production without sacrificing flavour or food safety, helping you develop a reputation for quality.
On the other hand, RTD formats make sense in specific scenarios: for businesses with an established consumer base who are exploring retail expansion, or that need longer shelf life and portability. Some cafés use RTD products to extend sales beyond opening hours or location limits – for example, selling canned cold brew through partner bakeries, hotels, or online stores. It’s a natural next step once in-house service demand stabilises.
Ready to choose the model that works for your cold brew service? Whether you want to maximise café-level profits or scale your brand into retail, Hardtank helps you do both – from fast in-shop brewing to turnkey RTD development. Explore our systems or book a consultation to plan your next step.
Cold brew coffee service: Key takeaways for cafés
- Fresh cold brew on tap offers higher margins and lower operating costs for cafés.
- Two main cold brew coffee service formats exist: preparing it freshly or offering RTD formats in cans for retail and takeaway.
- Fresh cold brew coffee service offers higher profit margins and faster preparation, while the shelf life for RTD formats is longer.
Cold brew coffee service FAQ
Which form of cold brew coffee service is more profitable for cafés – cold brew on tap or RTD formats?
For most cafés, fresh cold brew coffee service offers higher profits for daily operations. However, RTD formats allow you to expand your reach into grocery stores and other retail settings.
How long does RTD cold brew last compared to fresh cold brew?
Fresh cold brew is typically good for 24 hours until microbial activity begins. On the other hand, RTD cold brew in sealed cans can last for up to 12 months.
Should you offer both cold brew on tap and RTDs?
The hybrid model can maximise your revenue streams by helping you offer cold brew in a more varied range of settings.
Can the same recipe be used for both on-tap and RTD formats?
Not exactly. When scaling production from fresh service to RTD, you can keep core elements like the same coffee beans and general flavour profile – but the recipe itself usually can’t be transferred 1:1. Factors such as product stability, shelf life, and packaging requirements mean the extraction parameters and ingredient ratios need to be adjusted to ensure the final drink stays consistent over time.
Want to learn more about cold brew coffee service?
- Explore our cold brew systems for cafés and coffee chains: Browse our cold brew systems here.
- Discover how to expand your brand with private label RTD production: Learn more about our private label RTD services.
- Book a free consultation with our cold brew specialists: Contact our team here.
