Why Costa can crack the crowded iced coffee market

Apparently, it’s summer. You wouldn’t know it to look at the downpours outside. But we’re promised a rise in temperatures next week – making it an opportune time for Coca-Cola to launch its trio of Costa RTDs into grocery. Brewed using the Mocha Italia coffee beans used in Costa’s high street cafés, they’re hoping to tempt Brits looking for a cooler way to get their caffeine dose.

Admittedly, it’s hard to get excited about an iced coffee launch. They’ve hardly been thin on the ground lately. And there are plenty of players who are already strong in this area: Starbucks, Emmi, Jimmy’s and Crediton Dairy, to name a few. Coca-Cola already has iced coffee ventures in the form of Honest Coffee and the launch of Monster Espresso at the tail end of last year. The addition of Costa to the line-up is hardly ground-breaking.

 

 

 

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Costa cans ☕️ Follow us for all the latest food and drink launches before they hit supermarkets 🛒 Coca-Cola is launching three ready-to-drink Costa Coffee cans this month The range includes Classic Latte, Caramel Latte and Black Americano flavours

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But even in such a crowded arena, it could make a splash. The iced coffee market grew by £22.2m last year [IRI 52 w/e 30 December 2018]. Starbucks in particular is booming. Its value has shot up 22.6% to £62.1m [Nielsen 52 w/e 29 December 2018], making it one of the fastest growing brands in our Britain’s Biggest Brands report in spring. That just goes to show the power of a big high street name when it comes to a grocery coffee brand.

Coca-Cola is clearly betting on the brand equity of Costa to generate sales. Back in April, Coca-Cola Company CEO James Quincey explained how the Costa brand gave it “a platform in coffee overall”. He outlined plans to roll out the coffee brand into “vending and being a beverage partner with beans and machines” later in the year “as we have time to really solidify the expansion plans with the management of Costa”.

It’s also a proposition that could chime with consumers. Costa’s trio of beverages are billed as containing 30% less sugar “than most other ready-to-drink coffees in Great Britain”. As shoppers become more aware of the typically high sugar content of their iced coffees – a Starbucks Mocha Frappuccino contains10g of sugar per 100g, for example – that could prove a compelling claim.

So on the face of it, the Costa RTDs have all the ingredients for success. There is a caveat to all this positivity, though. Last year’s stellar growth in iced coffee was largely driven by the hot weather. Brands readily admit they wouldn’t have seen that same growth in the case of cold, damp weather. Although they would like the UK to start mimicking the US – where iced coffee is a year-round, rather than a seasonal beverage – we’re not there yet.

So for the sake of the iced coffee market – and the mood of the British public – let’s hope these downpours stop soon.