Exploring the market for coffee flavourings
Between August 2018 and March 2019, more than 1,000 new coffee-flavoured products were launched in the US alone. This was 30% more than the same period in the year before.
The coffee flavourings massive market is a huge one, and with RTD coffee consumption set to reach around 6.6 billion litres by the end of 2022, things only seem to be getting started.
Coffee-flavoured products have been produced for decades around the world, and their growth is expected to skyrocket as a range of different markets gather speed. To learn more, I spoke to Will Little of Little’s and Bill Aslanides of Synergy Flavors. Read on to find out what they told me.
You might also like our article on RTD milk-based coffees.
How coffee flavourings are manufactured
To capture the sensory aspects of coffee and add them to another food or beverage product, we use products known as concentrates, extracts, and essences.
And, as you might expect, to produce any of these three products, manufacturers naturally start by using roasted coffee.
Bill Aslanides is the Chief Flavour Chemist at Synergy Flavors, a global manufacturer and supplier of flavourings, extracts, and essences.
“There are many methods used by coffee extract producers,” he says. “These include carbon dioxide (CO2) extraction, liquid extraction, steam distillation, and other various solvent-based extractions.
“The method of extraction, and concentration, will have a significant effect on the flavour compounds, polyphenols, and caffeine that are extracted.”
Bill also notes that different products require different flavour profiles; some might require a more intense, roasty flavour, while others might need more delicate or sweeter flavours.
“A creamer-based drink is likely to need a ‘boost’ due to the masking properties of the fat and sugar,” Bill says. “[Similarly], a dark roast coffee product will require some extra emphasis to achieve the desired profile.”
The style of the product also impacts how much coffee flavouring is needed. For instance, processing and pasteurisation for milk-based products will mean more flavouring is necessary.
“Finished beverages, like a bottled cappuccino drink typically undergo a significant heat processing step for bottling,” Bill explains. “This will require an increased use of extracts to account for flavour degradation or loss during that step.”
Bill also notes that concentrates, extracts, and essences are different. The word “extract” can be used to refer to any flavouring, but concentrates and essences are produced in separate ways.
“Essences are made using water-based extraction, and deliver a clear water-like product that captures the aroma and flavour of the first moments of brewing.
“In contrast, coffee concentrates are another type of extract, but differ from the essence in that they carry a rich brown taste and the bitter notes of coffee.”
Which products are commonly flavoured with coffee?
After regular cow’s milk, flavoured milk is the second most consumed liquid dairy product in the world. In 2015 alone, 20 billion litres of flavoured milk were produced; this is expected to increase further, especially in fast-growing economies.
The Asia-Pacific region already has the largest share of the flavoured milk market with 60.2%. Approximately 25% is consumed in China alone.
The ten most popular RTD milk drink brands offering coffee flavours all saw growth in the UK market through 2019. Starbucks overtook Yazoo as the best-selling flavoured milk brand in the UK with their RTD latte options, sales of which increased by 16.8% to £63.6 million.
Similarly, Alpro’s Caffé range of non-dairy RTD lattes were launched in 2018. The brand saw a 6.2% increase in flavoured product sales in 2019.
However, while RTD milk-based beverages make up the biggest proportion of all coffee-flavoured products, there are a number of other options on the market.
“Coffee is reaching into other beverage categories such as alcoholic seltzers, hard alcohol, beer, and kombucha,” Bill says.
In 2019, US beer Pabst Blue Ribbon launched a malted barley alcoholic beverage made with coffee, milk, and vanilla. A year later, spirits brand Jägermeister debuted a cold brew coffee liqueur in its range.
Beyond this, Coca Cola Coffee was introduced to 25 global markets in 2019. The product contains less caffeine than a cup of black coffee but more than a regular Coke. Not long after, PepsiCo entered the US market with its Pepsi Caffé range, featuring original and vanilla flavours.
“Coffee is also an excellent flavour choice for fitness and nutrition categories,” Bill explains. “These include protein shakes and pre-workout drinks, energy bars, and cookies.”
Beyond fitness supplements, there are also a range of coffee-flavoured snacks in many consumer markets. In Europe, Germany is the most prominent of these; it comprised 24% of all global launches of coffee-flavoured snack bars in 2018.
What do consumers expect from coffee-flavoured products?
Above all else, consumers look for consistency, and this is no different for coffee-flavoured products – from soft drinks to snack bars.
As coffee is a seasonal product, Bill says that consistency is naturally a concern for flavourings manufacturers. “Flavours and extracts can be used to standardize the natural variation of the base coffee from season to season,” he explains.
Although we know that coffee has a broad range of flavours depending on its origin, processing method, and roast profile, there are a few choice “classic” well-recognised flavours that consumers expect when they buy a “coffee-flavoured” product.
“During the flavour development for a coffee [extract], descriptors such as burnt, roasted, smokey, ashy, brown, nutty, cocoa, and bitter are all likely to be referenced.”
Flavours like “roasted” and “nutty” are commonly associated with coffee because of some of the compounds that develop during the process of roasting. For these two particular descriptors, 2-Acetyl-2-tyazoline and 2,3-Dimethylpyrazine are responsible, respectively.
Consumers also want caffeine when buying coffee-flavoured products. There’s a big demand for caffeinated beverages alone; energy drinks sales sat at around US $53.01 billion in 2018 and are expected to reach US $86.01 billion by 2026, showing that it’s a growing consumer priority.
Even within this segment, coffee is becoming popular. Leading brands like Monster and Rockstar have released several coffee flavours. Monster’s seven “Java” flavours all contain 188mg of caffeine per can – however, coffee extract only contributes 28mg of this.
Rockstar’s Roasted has more (240mg), but Starbucks’ “high-caffeine” Double Shot and Energy beverage contains just 146mg in comparison.
Finally, some choose coffee-flavoured beverages as a smoother and more dilute alternative to just drinking a cup of coffee.
Will Little founded Little’s, which sells infused and flavoured ground, instant, and capsule coffee. “For many consumers, pure coffee isn’t something that is all that palatable,” he says. “This is evident in the amount of milk-based and sweetened drinks that are consumed, versus black coffee.”
In line with this, juice brand Ocean Spray launched a cold brew cranberry juice in the US in 2020. This appeals to the one-in-five US consumers who show interest in RTD coffee products made with lemonade or juice – flavours that are familiar and provide added sweetness.
“A lot of consumers are looking for ways to make coffee taste better and adding a [different] flavour does this,” Will says.
Why is it so popular?
Health and wellbeing is one major factor. This continues to be a higher priority among consumers when buying food and beverages, and is a key driver of the popularity of coffee-flavoured beverages.
Alongside the increase of plant-based milk consumption, brands like Koia are releasing non-dairy protein RTD products flavoured with coffee.
The brand’s vanilla latte and mocha latte flavours contain green coffee extract, coconut milk, medium-chain triglycerides (MCT) oils, and plant proteins. Options like these provide consumers with an alternative RTD coffee that isn’t as sugary.
The possibility for innovative flavour combinations is also driving this market segment, particularly in the Asia-Pacific. Recently, Nescafé launched coffee and fruit RTD beverages in Indonesia, including popular flavours like Yuzu.
The instant fruit coffee range includes flavours like peach, pineapple and coconut, and green apple. In China, KFC – a leading player in the coffee sector – offers lemon, lychee, and grapefruit-flavoured sparkling coffee drinks in their stores.
There is also a question to ask about the quality of coffee used to manufacture these flavourings.
However, as consumers increasingly expect coffee-flavoured alternative beverages to be “multi-functional” – nutritional, convenient, delicious, and full of energy – we may start to see more expensive, higher-quality coffee enter the flavourings market.
Will believes that we need to push for this in the market to make it happen. He asks: “[Coffee flavourings] often act as a gateway for consumers wanting to get into coffee, and if quality and provenance isn’t a focus at the entry point, can we be surprised when consumers don’t care about quality and provenance later down the line?
“A lot of the challenge comes down to price. It’s a problem right through the industry, but we all need to recognise the true cost of good quality coffee and be prepared to pay for it.”
With the RTD global market set to reach US $42.36 billion in 2027, the opportunities for coffee-flavoured products only seem set to grow. By focusing on the preferences and ever-changing buying habits of consumers, this flavourings market can correspondingly expect to grow.
As we see this market segment grow, perhaps coffee quality will grow, too. In time, this may well come to improve wider consumer awareness, and hopefully benefit stakeholders across the coffee supply chain.
Enjoyed this? Then try our coffee tasting exercises to improve your palate.
Photo credits: Gee Owen
Perfect Daily Grind
Want to read more articles like this? Sign up for our newsletter!