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RTD Coffee in the US

United States RTD coffee market: Starbucks and PepsiCo lead sales


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2014-02-10 18:55:01 - RTD Coffee in the US - a new market research report on companiesandmarkets.com

The North American Coffee Partnership, a joint venture set up by Starbucks and PepsiCo, continues to hold a commanding lead in the United States RTD coffee market sales, with a 72% off-trade value share in 2012. The company did see its off-trade value share decline from 77% in 2011, as it faced competition from Monster Beverage and new entrant WhiteWave Foods Co.

The company´s Frappuccino was the first mover in RTD coffee, with a flavour approximating to the popular Starbucks blended drink of the same name. The brand also has a large advantage in terms of distribution from its first mover status, and new entrants often struggle to gain entry into national chained stores. However, Starbucks Corp has been challenged by

 

 

a sharp decline in its signature iced Frappuccino franchise in recent years. To combat the issue, it has taken several measures, including introducing more RTD coffee varieties.

RTD coffee has been able to grow in the US as manufacturers capitalise on consumers´ love affair with sweet flavours. Not all Americans like the bitter taste of brewed coffee; however, many have become familiar with iced coffee drinks such as Starbucks Frappuccino through visits to coffee houses. As a premium priced, indulgent drink, RTD coffee was particularly vulnerable to the consumer shift in spending that occurred during the recent economic downturn. Off-trade value sales declined by 6% in 2009. An improvement in the US economy led to an 8% value gain in 2011, followed by a 17% gain in 2012. Off-trade volume sales grew by 25% in 2012, a huge increase from the 8% CAGR of the review period.

Despite an increase in health and wellness awareness, RTD coffee sales are expected to continue growing strongly. Off-trade value sales of RTD coffee are expected to grow by 27% between 2012 and 2017, to reach US$1.9 billion. Total volume is expected to grow by 22% over the forecast period to reach 358 million litres, compared to growth of 41% over the review period. The slowdown in sales is typical of a maturing category. Sales are expected to continue growing, as manufacturers are expected to launch more products that emphasise the healthy aspects of the beverages.

Though they are positioned as a caffeinated indulgent beverage choice for adults, many of the products do contain protein and calcium. Americans´ interest in protein has helped drive sales of Greek yoghurt. More lower calorie RTD coffees are expected as well. The April 2013 launch of Starbucks Iced Coffee Coffee+Milk (Low Calorie), with only 50 calories, is a step in that direction. Ferolito, Vultaggio & Sons Inc´s Joltin´ Joe, launched in September 2012, is sweetened with stevia and contains 100 calories per 16oz (473ml) can.

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