These days, there are so many different ways to make coffee, and many more places where we can have it made for us. Whether it’s at a café, restaurant, supermarket, or convenience store, today’s consumers can drink coffee in more ways than ever before.
As one of these many forms of coffee, ready to drink (RTD) coffee is rapidly becoming popular with consumers. For many, its appeal lies in its convenience: consumers can quickly stop somewhere and easily grab a pre-prepared RTD coffee out of a cooler or off of a shelf, and then be on their way.
However, as RTD coffee has become more popular, the segment has evolved to accommodate the needs of the modern customer. It’s no surprise, then, that plant-based RTD coffee beverages are becoming more popular with consumers around the world.
I spoke to two individuals whose brands focus on dairy-free options to learn more about the RTD space, the different options available to consumers, and the future of this growing category. Read on to learn more.
How has the RTD segment grown and changed?
Over the past few years, the RTD coffee category has undergone rapid and explosive growth, which is only set to continue. According to research from Mordor Intelligence, the segment is projected to grow by some 7.69% every year between 2021 and 2026.
This growth has been fuelled by consumers looking for convenience, the emergence of cold coffee trends, and in some cases, a focus on healthier alternatives. These trends are themselves all driven by consumers from younger generations: Generation Z and millennials.
Additionally, over the past two years, the Covid-19 pandemic has pushed more consumers to order coffee online as hospitality businesses around the world shuttered. This meant there was a huge spike in at-home coffee consumption (specifically in 2020) which has in turn contributed to the growth of the RTD space.
RTD coffees are often found in bottles and cans, and sold in many different forms. In the past few years, RTD brands have adapted to roll out new products that meet growing consumer demand, which includes cold brew, milk-based coffees, hard coffees, and plant-based options.
Plant milk & the RTD space
Jarrett McGovern is the co-founder of Rise Brewing Company, a RTD coffee company based in New York City, US. He tells me how he’s seen first-hand that the marketplace is changing and growing to accommodate plant-based options.
“We have seen a huge shift towards plant-based foods and beverages,” he says. “Consumers are starting to realise that plant-based products can be healthier and taste better.”
He says that the carbon footprint of plant-based milks is generally much lower, which means they’re more environmentally friendly – something which also appeals to many millennial and Generation Z consumers.
“In many cases, they even have a longer shelf life for the consumer and celebrate more sustainable farming practices,” he adds.
Abby Sutton is the marketing manager at First Press Coffee, a Melbourne, Australia-based company with a strong focus on RTD coffee. She echoes Jarrett’s sentiments on plant-based products.
“We first launched our plant based iced coffees in early 2020 in response to growing demand for a healthier and indulgent alternative,” she explains.
Why do consumers choose to go plant-based?
Both interviewees note that one of the key motivations for opting for plant-based beverages is health and wellbeing.
Over the last few years, we’ve seen a growing uptake of veganism and flexitarian diets across many major coffee consuming markets.
In the US, a 2019 survey saw as many as 6% of all consumers say they were vegan, which was a staggering 500% increase in just five years. Meanwhile, UK charity Viva! says that 45% of the vegans it surveyed chose the lifestyle for health reasons.
However, this isn’t the only motivation for choosing plant-based milk.
“Consumers choose dairy-free for a variety of reasons,” Jarrett says. “There is a clean refreshing taste to plant-based products, and the nutritional value is often better than that of dairy products.”
Jarrett also notes that Rise’s dairy-free products are totally cholesterol-free, as well as being environmentally responsible.
“When you choose a dairy-free product, you also promote the farmers that grow the plant-based alternative,” he says. “Often, their practices create a healthier earth and introduce fewer toxins into the land.”
Abby, however, notes that diet is a key change, but also that people don’t necessarily have to be vegan to choose plant milks.
“The rise of the flexitarian has encouraged people to try new ways of enjoying milk-based drinks,” she says. “These can be beneficial to those with dietary requirements, as well as those seeking to thread a little lighter on the environment.”
So, what options are there for plant-based RTD beverages?
As recently as just 10 or 15 years ago, soy milk was pretty much the only prominent alternative to dairy. However, in the 2010s, this changed dramatically, and plenty of new plant-based milks entered the market.
“Gone are the days when a café could stock just dairy and soy,” Abby explains. “Furthermore, the amount of choice in the market has definitely fuelled a discussion around sustainability and normalised dietary requirements.”
More and more brands and coffee shops now offer a range of plant-based milk options, recognising that there can be flavour differentiation under the dairy-free umbrella. Alongside mainstays such as oat, almond, and soy, we’ve seen coconut, cashew, pea, and even potato enter the market in recent years.
This is true for RTD brands just as it is for coffee shops. Within the segment, there seems to be a widespread desire to innovate and offer new milks and “flavours”.
In line with this, Jarrett tells me that Rise’s has seen a great amount of success come from investing and innovating in the breadth of its product range.
“All Rise products are dairy-free,” he says. “We offer nitro black cold brew coffee, as well as a series of lattes, including original oat milk, vanilla, and chocolate. We also offer our ‘London Fog’, a tea latte and a line of organic oat milks.”
Historically, RTD products have also been sweetened or flavoured to make them more appealing to everyday consumers who have less knowledge of the coffee sector. However, using plant-based milks can often achieve this without adding sugar.
Almond milk, for instance, adds a pleasant nutty sweetness to an RTD beverage, but allows the brand to maintain its “no added sugar” label – appealing to health-conscious consumers in the process.
Like Jarrett, Abby believes it’s important to continue to innovate and offer customers a range of options as the demand for both RTD coffee and plant-based milk grows.
“Our business began with a line of black cold drip coffee beverages designed to provide clean, natural energy,” she says. “It has since grown to include three Australian almond milk iced coffees (original, no added sugar, and mocha) and an Australian oat milk iced coffee.”
By introducing plant-based RTD coffee options and continually expanding upon existing product lines with new milks and flavours, brands are offering consumers both choice and flexibility.
Looking to the future
With the RTD market segment and plant-based milk consumption both poised to continue growing, the future for the segment is bright. Both consumers and brands are seeing that dairy-free options aren’t just better for the environment, but also that they actually taste as good if not better than some of their dairy counterparts.
Abby says she’s excited by this shift in consumer tastes. “People are seeking better, local and more sustainable alternatives,” she says. “Consumers want to minimise their environmental impact but still enjoy themselves and indulge.”
Jarrett agrees, saying there’s plenty of space for the innovation to continue. “In the future, we’re going to see even more amazing dairy-free options, and find new plants, fruits, and nuts that not only taste amazing, but have incredible health benefits, too.”
Plant-based RTD coffee beverages provide a rapidly-growing amount of choice and flexibility to a base of consumers who want convenient ways to drink dairy-free coffee beverages.
As such, supermarkets and convenience stores are gradually giving more space to these plant-based products, with new brands entering the marketplace on a regular basis.
“Ultimately, we are not just selling a product, we are selling a belief. We create beverages for people who have a similar outlook on life,” Jarrett concludes. “We get really excited about creating the best tasting beverage we can using organic plant-based ingredients, and we are attracted to other brands that do the same.”
Enjoyed this? Then try our article exploring RTD milk based coffee.
Photo credits: First Press Coffee, Rise Brewing Company, Pexels
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