Ten years from now, 2016 may well be remembered as the year that ready-to-drink (RTD) coffee was accepted as a segment of the industry to be taken seri
But while it wasn’t until 2016 that the specialty coffee industry finally embraced RTD coffee. In many parts of the world this more convenient cousin on the caffeinated beverage’s family tree has long been a significant staple of the mainstream industry.
Asian nations such as Japan and Korea particularly have a longstanding affinity with RTD coffee.
Japan has a long history as a pioneer in the development and consumption of canned coffee.
There are some 2.5 million vending machines selling beverages in Japan, and it is via this delivery platform that RTD has been able to grow so impressively.
The RTD coffee segment in Japan today is worth more than US$10 billion annually.
In fact, Asia accounts for 83 per cent of the world’s RTD coffee market in terms of volume and 78 per cent in terms of value. While it is the world’s largest coffee market overall, the United States is the second most important market for RTD in the world, with consumption of 9 per cent in terms of volume and 13 per cent in terms of value.
However, while it is a distant second to Asia at the moment, the US is the market with the highest growth in the category, between 2010 and 2015, it grew 17 per cent per year in terms of volume and 12 per cent per year in terms of value.
The RTD coffee market reached sales of US$18 billion in 2015, with 4.9 billion litres consumed globally.
Over the five years to 2015, the volume of consumption in the segment grew by 3.1 per cent annually, though falling prices meant that the value of the segment contracted at a rate of 1.5 per cent per annum.
One company that has a particularly keen understanding of the dynamics of the global RTD coffee market is Colombian soluble coffee specialist Buencafé, which has been producing 100 per cent Colombian coffee extract for the RTD industry for more than 25 years.
“The production of concentrated coffee extract is a standard intermediate stage in the process for the production of freeze dried coffee,” says Buencafé’s Director, Constanza Mejía. “However obtaining a coffee extract suitable for industrial use in a remote location, which could be literally at the other side of the world, is a very demanding challenge.”
While instant coffee, which is Buencafé’s primary product, is very stable over time because it almost has no water in it, coffee extract is very delicate due to its water content.
“A good quality coffee extract should be 100 per cent natural – this means without addition of any stabiliser or ingredient different from coffee and water,” Mejía says. “In order to preserve intact the delicate volatile components, the coffee extract should be kept frozen below -18 degrees Celsius until final RTD packaging.”
Mejía says that Buencafé has a few key steps in place to ensure they produce the best possible product.
“We use the best 100 per cent Colombian coffee beans to bring all the delicious notes that have made this one of the world’s most famous coffee origins,” she says.
Properly slow roasting the coffee beans is essential to develop the best aroma and flavour that the consumer wants in their beverage.
“Using all the know-how gathered along decades for a perfect package where the secret is in the details, Buencafé brings the best coffee quality to clients all over the world,” Mejía says.
Buencafé offers a wide portfolio of different roasting degrees and cup profiles for its frozen coffee extracts, sold in small bottles with lid, 18-kilogram plastic pails, or in 200-kilogram drums.
Over the past few years, the RTD coffee segment has experienced a huge injection of interest due to the rising popularity of cold brew coffee, which is coffee brewed without heat, with the grounds steeped for several hours to extract the flavour and the caffeine. The end result is a coffee that is naturally sweeter, with a strong aroma, and ultimately more artisanal. This kind of RTD coffee is different from traditional RTD coffee, which is hot brewed coffee, iced or chilled, and in most cases sweetened and mixed with dairy.
“A strong trend for all markets is cold brew coffee, especially in the RTD segment,” Mejía says. “It may be regarded as a projection of the slow food movement, if you compare the 30 seconds to extract an espresso shotversus 12 hours or more for a cold brew. People tend to see some conditions (and some words) as very negative such as “trans” (for fats), GMO for any food, and it seems that “hot” may be perceived as flavour degrading for coffee.”
With this in mind, Mejía says her company is looking at different ways to cater to these new market drivers.
“Buencafé is continuously developing new products for all these trends, such as a natural coffee extract with five times as much antioxidant as a regular coffee, and the versions without or high in caffeine.”
While cold brew may be a key driver in the growing popularity of RTD coffee in Western markets, the segment as a whole continues to grow, and that is where Buencafé comes in.
“The major trend behind the growth in RTD coffee beverages is the need for easy-to-consume products on the go, when and where the consumer wants, in a convenient package with the right size and perfect temperature (which could be hot or cold depending on the weather or particular mood) and with exactly the same taste every time,” Mejía says. “The ubiquitous availability of vending machines is an important complement in mature RTD markets, where consumers may find their preferred RTD coffee a few steps away.”
Mejía says that the growing interest in RTD coffee around the world is driving manufacturers to move beyond canned RTD coffee to more premium offerings that use higher quality ingredients, a fresher experience through chilled cups, and more attractive packaging in the form of PET bottles.
In addition to this, makers of RTD coffee are moving to introduce better quality products because consumers are becoming more aware of good coffee and have developed a taste for speciality coffee drinks such as lattes through visits to specialist coffee shops. As a result, many RTD coffee makers are launching premium products.
However, from a manufacturer’s perspective, Mejía says there are two basic types of RTD coffee beverages: black with only coffee plus water and white beverages with milk or creamer.
“Coffee extract for plain black coffee RTDs needs to be perfect, without even a slight off flavour because there is no ingredient to mask it with,” Mejía says. “On the other hand, coffee extract for latte or cappuccino RTDs needs to be strong enough to supply a good coffee flavour on top of the other components.”
In mature RTD markets such as Japan, the trends reflect new options for very particular groups of consumers that want specific attributes such as products that are rich in antioxidants or high (or low) caffeine, all made with 100 per cent natural components, Mejía says. “These trends will most probably migrate soon to those follower markets where coffee RTD beverages are now growing fast, such as China or the US.”
However, Mejía adds, there is still no real certainty about which trends will really take off for RTD in China and the US.
“One could foresee an evolution in RTD iced coffee similar to the evolution of iced tea from hot tea, where the quality and variety of the tea leaves is of most importance for the warm version, while in iced tea the artificial flavours and tonnes of sugar (or any other sweetener) are the leading motivation,” she says. “For iced coffee, the blend of flavours comes in the form of cappuccinos, mostly powered by vanilla or mocha; here the coffee base flavour needs to be strong, but not necessarily of the best quality. On the other hand, one could foresee an evolution closer to the cold brew concept, where the coffee flavour itself is the core of the experience, and then the quality of, for example, a 100 per cent Colombian coffee would be deeply appreciated.” GCR