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Chilled coffee market gathers new product development momentum

Ready-to-drink (RTD) or iced coffee has been seeing a period of strong product and market activity in recent years. It remains one of the smallest sectors of the soft drinks market in terms of new product activity, accounting for just over 4.2% of global launches recorded by Innova Market Insights in the 12 months to the end of July 2014. This is up from less than 3% five years ago, however, and the actual number of launches has nearly trebled over that period. Asia continues to dominate in terms of RTD coffee introductions, accounting for over half (53%) of the global total, ahead of Europe with 30% and North America with 11.5%.
The nature of the market is changing, according to Lu Ann Williams, Director of Innovation at Innova Market Insights. “Although ambient canned and bottled coffee drinks continue to dominate globally,” she reports, “particularly in well-established markets such as those in parts of Asia and the US, it is the chilled milk-based variants in lidded cups for on-the-go consumption that have been leading growth, particularly in the relatively undeveloped European market.”
The dairy industry has been driving activity, with companies such as Emmi of Switzerland developing its Caffe Latte range, which is now available in a number of European markets, including Germany, the UK, Switzerland, Spain and Austria. A new development in the range was the 2013 launch of a larger 370ml version of its Cappuccino drink to be sold alongside the established 230ml format and targeted more specifically at men. A Decaf variant was also launched into the range in the UK in May 2014.
Key competition includes the Starbucks Discoveries range of RTD iced coffees from Arla, also available in a number of European markets. Competition from other dairy companies in Germany includes J Bauer with the premium Mövenpick line and the Landliebe range from FrieslandCampina.
More recent activity has focused on the arrival of leading hot coffee brands into the sector. A new and highly significant entrant to the German market in 2014 was Mondelez, which brought its market-leading Jacobs coffee brand to the chilled iced coffee market. During the summer of 2014, the world’s leading coffee brand Nescafe entered the European chilled dairy iced coffee market with the launch of Shakissimo, a range of three milk-rich coffees in lidded cups.

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