Rising Popularity of Iced Coffee Spurs Shift in Consumer Spending Habits

The increasing demand for iced coffee is reshaping consumer spending patterns, prompting a shift towards more cost-effective options for coffee aficionados. While cafes and restaurants have seen a rise in cold coffee orders, consumers are now exploring alternatives on grocery shelves and in-home brewing.

According to Darren Seifer, a food and beverage analyst at Circana, 35% of coffee orders are now for cold beverages, reflecting a 7% increase since 2017. However, the cost of cold drinks such as cold brew and lattes is notably higher than traditional hot coffee, with prices reported to be $5.14 and $5.46 on average, respectively.

With the affordability factor in mind, consumers are turning to retailers and convenience stores for budget-friendly iced coffee options. Grocery stores, in particular, are offering competitive prices, with a 1.6% decrease in coffee prices compared to the previous year, as per federal data.

Major players in the coffee industry are also adapting to this trend. Nescafé recently introduced its first-ever cold-liquid-dissolvable coffee, catering to the growing demand for in-home coffee solutions. On the other hand, Keurig is set to launch the ‘K-Brew+Chill’ machine, aimed at providing consumers with an efficient way to enjoy iced coffee without the premium price tag.

Local coffee establishments like Buddy Brew Coffee in Tampa, Florida, have witnessed a surge in interest for home brewing classes, emphasizing the shift towards DIY coffee experiences. Despite minor price adjustments, Buddy Brew’s grocery sales have remained strong, with offerings priced at a fraction of the cost of cafe-sold cold brews.