Iced/RTD coffee products benefit from a trendy image, especially amongst the younger demographics. In the last few years, the category has come a long way, with product dynamics now encompassing hemp, cold-brew and bubble-gum variants. In the UK, Nestlé has taken it one step further with iced coffee sachets. The new Nescafe Gold Iced range is priced at £2.98 and contains seven sachets which are suggested to be added to cold water and ice to make up an iced beverage comparable with barista-style quality. The two flavours, salted caramel and cappuccino, combine novel flavours with traditional classics to appeal to a wide target audience.

Iced/RTD coffee is an extremely seasonal category in the UK, with the majority of sales attributed to spring and summer. Accordingly, this launch marks the start of summer consumption trends. The UK has not witnessed a decline in its iced/RTD coffee market since Q1-2014,* highlighting that although niche, the category is extremely sought after and gaining year-on-year (YOY) momentum. Coffee giant Nestlé has innovated the unique offering in line with both convenience and premiumisation trends and is likely to create conversational chatter amongst the iced/RTD coffee consumer base. The company has leveraged home consumption trends that have been driven by Covid-19. Indeed, according to GlobalData’s research, home-centric lifestyles will persist with a third of UK consumers planning to continue to or start working from home more frequently*².

Although this range presents a unique offering for the retail segment, it does pose a risk for future sales from on-premise locations such as cafes and restaurants. This price-conscious alternative can be made before commuters travel to work, a day out, or simply to be enjoyed in the comfort of ones’ own home, potentially limiting demand for on-premise locations.

The Iced/RTD coffee category has witnessed significant innovations within the last year in the UK, as producers have increased efforts to innovate in line with home consumption trends. Launches from Arctic Coffee in caramel and ‘intense’ variants, Starbucks’ coconut-based cappuccino and Costa Coffee in a can all hit retail shelves, presenting consumers with novel flavours combined with dairy-free alternatives in a convenient consumption format.

In light of Covid-19, consumers are gaining further interest in products that can be made from home, with 43%*² of UK consumers finding do-it-yourself (DIY) food and beverage kits appealing. Where cafes and restaurants have remained closed for large periods throughout 2020, Nescafe’s new launch provides consumers with an easily made iced coffee product to enjoy from home.

*    Data taken from GlobalData’s quarterly beverage forecast, UK, Q1 2021

*² GlobalData’s Q1-21 consumer survey results, UK

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