The ready-to-drink (RTD) coffee segment is flourishing. Projected to be valued at US $43.8 billion by 2028, growth is outpacing that of the global coffee industry. More and more roasters have started to capitalise on this booming market and create their own canned and bottled coffee products to offer more choice than ever before.
Convenience was the initial driving force behind RTD coffee’s explosive popularity. While it continues to fuel market growth, consumer demand has evolved over the last few years in the wake of inflation and wider changes in the coffee market. Quality, price, and different sensory experiences are now equally important purchasing factors. If roasters want to keep up in the RTD sector, they need to stay ahead of the curve.
Ancis Romanovskis, CEO of Rocket Bean Roastery, and Jordi Mestre, founder and co-owner of Nomad Coffee, provide their insight on what roasters must know about changing trends in the RTD market.
You may also like our article on why coffee shops should pay attention to cold brew safety.
The evolution of RTD coffee
Despite its sudden surge in popularity in recent years, RTD coffee has been around for some time. In the 1960s, canned coffee vending machines were common in Japan. Three decades later, off the back of the chain’s wildly successful blended Frappuccino, Starbucks partnered with Pepsi to launch an RTD version in US grocery stores.
The drink was an instant hit, so other beverage companies soon followed suit. In Europe, illycaffé partnered with Coca-Cola to debut the “iIlly Issimo” range in 2007. Food company Mars released two Galaxy-branded coffee drinks five years later in the UK, and Jimmy’s Iced Coffee RTD beverages also launched in the UK the same year.
It would take a few more years, however, before specialty coffee embraced RTD. A pivotal moment came when US roaster La Colombe released its “Draft Latte” in March 2016. Within 18 months of the launch, the Draft Latte comprised more than 1% of the total US RTD coffee market share – making it the fastest-growing RTD coffee drink in the country.
Innovation was key to this success. La Colombe partnered with a local Philadelphia business to create the “Innovalve”, which injects nitrous oxide directly into each latte can to produce a foamy, smooth texture.
Since then, many specialty roasters have developed their own RTD beverages to sell in coffee shops and grocery retailers. Product diversification and innovation continue to lead market growth, with flavoured drinks, plant milks, and functional ingredients receiving plenty of interest from consumers.
Market growth is dependent on region
RTD coffee is clearly popular, but the level of market growth varies across different regions. The Asia-Pacific RTD coffee market was valued at US $14.75 billion in 2019, which comprised more than half of RTD coffee’s total global market value that year. Total US retail sales for coffee and RTD coffee, meanwhile, are estimated to reach US $19.7 billion in 2024, according to data analyst firm Mintel.
Jordi Mestre is the founder and co-owner of Nomad Coffee in Barcelona, Spain.
“There are very few options for RTD coffee in Spain,” he explains. This inevitably presents roasters with an opportunity to capitalise on a lucrative market, especially as convenience and quality become increasingly important to consumers.
“We launched a redesigned recipe for our Iced Coffee and Iced Latte drinks, which we adjusted last year to offer a high-quality, easy-drinking RTD coffee option,” he adds.
Ancis Romanovskis is the CEO of Rocket Bean Roastery in Riga, Latvia.
“Baltic grocery stores don’t offer a vast selection of RTD coffee, but options have been available for some time,” he explains. “However, specialty coffee remains a rare find in this region.”
Ancis tells me that in 2019, Rocket Bean partnered with cold coffee solutions company Hardtank to create its own range of high-quality RTD products. “Year after year, demand for specialty RTD coffee continues to grow, and we aim to meet it,” he adds.
Consumer preferences are always evolving
Once believed to be a “summer” drink, cold and RTD coffee is now a year-round beverage.
“As we’re in the Nordic region of Europe, our warm climate is fleeting,” Ancis tells me. “Despite this, sales of RTD coffee remain strong throughout the year, demonstrating continued demand even outside of summer.”
As key RTD coffee markets mature, consumer demand has shifted. Quality has always been a priority, but following record rates of inflation and rising food and energy costs over the last two years, coffee drinkers are more price-conscious than ever before.
Offering affordable, accessible, yet premium RTD coffee options helps roasters stay competitive, especially among Gen Z consumers who have the highest spending power in the coffee industry. This demographic also lives increasingly on-the-go lifestyles, so convenience is one of the biggest drivers of their coffee purchasing decisions.
Health is also a major influencing factor on consumer behaviour. According to a 2024 McKinsey study, 56% of Gen Z consumers in the US say their fitness is a “very high priority”, compared to 40% of US consumers overall.
This interest extends to the RTD coffee market. The National Coffee Association’s latest National Coffee Data Trends report states that 21% of surveyed coffee drinkers believe cold brew coffee is healthier than other types of coffee.
“With our RTD products, our focus has been on catering to a diverse range of customers and their specific needs,” Ancis says. “Most of our products are sugar-free and oat milk-based.”
As consumers want more customisable, functional, and environmentally-sustainable products, roasters have launched dairy-free RTD options which have captured a large share of the market.
How roasters can find success in the RTD segment
One of the most effective ways for roasters and coffee shops to tap into the burgeoning RTD market is to make their own cold brew or coffee concentrates in-house. Traditionally, this meant steeping ground coffee in water for up to 24 hours.
Not only is this practice time and labour-intensive, it can also create the same flavour profile no matter which coffee is used. To offer new and exciting sensory experiences, manufacturers have developed new machines that extract concentrates in a much shorter time frame.
Ancis recalls how Rocket Bean spent years testing various cold brew systems to refine its RTD products.
“From 2013 to 2015, we experimented with cold brew drips,” he says. “But in 2019, we were introduced to Hardtank, and were quickly impressed by the quality and cleanliness of the flavour profiles it produces.”
New cold brew and concentrate systems have revolutionised how coffee shops and roasters create RTD drinks. Innovative vacuum and vibration technology increases extraction efficiency, which massively reduces total brew time and changes the overall sensory experience.
“Coffee tastes sweeter and lighter, so it’s easier to drink,” Jordi says. “Traditional cold brew is more syrupy and heavy.”
He explains that the countertop Baby Hardtank – which received the 2021 and 2022 SCA Best New Product award and the 2023 Coffee Innovation award – uses patented recirculation and cold extraction technology to brew up to four litres of RTD coffee in under an hour. The machine constantly recirculates the liquid to result in a cleaner-tasting flavour profile with a higher extraction yield. It can also be used to brew tea, cascara, and cocktails to offer customers a more diverse range of RTD beverages.
Leveraging new technology to maintain margins
Following the pandemic, roasters and coffee shops have grappled with rising costs and inflationary pressures. Forced closures during Covid-19 added strain to businesses, while ongoing conflict in Ukraine pushed food and energy prices to record highs.
In early July 2024, arabica prices edged over a two-year high – largely the result of growing supply shortages in Vietnam and Indonesia. Robusta futures also reached record highs over the past few months, driven by rising demand, unfavourable weather conditions in Brazil and Vietnam, and conflict in the Middle East.
To manage increasingly tighter margins, roasters and cafés are looking for more ways to cut costs and improve operational efficiency. At the same time, they still need to offer their customers high-quality and differentiated products to stay competitive, including RTD coffee.
But investing in equipment upfront can be costly, so leveraging the resources and expertise of co-packing partners is a smart move. Moreover, with cold brew safety becoming an increasingly pressing concern, roasters need to make sure they meet strict health and safety standards.
Ancis explains how Rocket Bean works with Hardtank to produce larger quantities of RTD products at its private label production and packaging facility in Opole, Poland.
“We’re always looking to improve our products without compromising on quality,” Anics adds. “It was clear to us that RTD canned coffee was the best option.”
For smaller-scale operations, coffee businesses are investing in countertop solutions that improve consistency and efficiency. Ancis says the Baby Hardtank allows users to fine tune their recipes to prepare RTD coffee in less than 45 minutes. This can help roasters and coffee shops to streamline operations, reduce labour costs, and free up time to focus on other areas of their business.
Staying ahead in the RTD coffee market
Trends in the RTD market are constantly developing and changing. By embracing new cold coffee technology, roasters can stay ahead of them to meet ever-evolving demand.
But the need to match consumer expectations for quality and consistency will forever remain a priority. This means roasters need to keep this in mind if they want to stand out.
“You have to be critical of your RTD products,” Ancis says. “Leverage new technology like the Baby Hardtank to your advantage and source excellent coffee to achieve your desired results.”
Understanding how to tap into local and regional market preferences is essential. If RTD milk-based products are particularly popular, roasting to medium or darker profiles or using blends will result in more complementary flavour profiles.
Customers who prefer to drink their coffee black, meanwhile, may be looking for single origin options or more interesting tasting notes. Lighter roast profiles and washed processed coffees may work better in these cases.
Moreover, as interest in exclusive varieties and experimental processing increases, using high-scoring or “funkier” coffees is an effective way for roasters to offer a unique RTD experience to their customers.
RTD coffee is only growing, with demand from younger consumers leading the way. If roasters want to find success in this market, keeping up with the latest trends and innovation is crucial.
Quality and convenience will always be important. But now more than ever, roasters and coffee shops need to provide differentiated experiences to stand out in an increasingly competitive market.
Enjoyed this? Then read our article on why long brew times are no longer the norm for cold coffee.
Photo credits: Hardtank
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