Americans' taste for cold brew transforms summertime coffee market

Mon Aug 3, 2015 2:46pm EDT
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By Luc Cohen

NEW YORK (Reuters) - For U.S. coffee shops, business usually cools down as the weather heats up.

But as the latest craze, cold brew coffee, moves from a hipster infatuation to mainstream staple, that traditional seasonal pattern is unraveling.

Since cold brew often uses more beans than traditional iced coffee, it could boost overall U.S. demand for coffee beans, partially offsetting the effect of the more efficient single-serve pods popularized by Keurig Green Mountain.

Peet's Coffee & Tea, one of the nation's biggest coffee chains with about 400 stores, replaced traditional iced coffee with cold brew in June, and has seen cold brew sales exceed last year's iced coffee sales by as much as 70 percent.

"We went all in on cold brew," Peet's general manager Tyler Ricks said, noting that the newer product is smoother, more refreshing and lacks iced coffee's "harsh, bitter note."

For Peet's, which reported total revenue last year of $540 million, focusing on cold brew was part of an effort to slow the seasonal decline in coffee sales, which several roasters estimated at between 15 and 20 percent.

Others have jumped on board, including the nation's largest coffee chain, Starbucks, which launched cold brew at 2,800 stores this summer.

Hector Mai, manager of a Guy & Gallard cafeteria in midtown Manhattan, began serving cold brew this summer and has already noticed iced tea sales declining.   Continued...

A coffee cup of a nitrogen-infused cold brew coffee from Brooklyn-based roaster Gillies Coffee out of a tap is seen at Guy & Gallard cafeteria in New York July 31, 2015. REUTERS/Eduardo Munoz