Iced Coffee Is in Hot Demand

But the warm version is not to be forgotten, as consumers turn to their home coffee maker for a steaming cup of Joe.

September 13, 2022

ALEXANDRIA, Va.—Is hot coffee even “cool” anymore? The New York Times reports that many people, particularly millennials and Gen Zers, don’t even consider ordering a hot-coffee beverage, opting for iced coffee all year long—even in the dead of winter.

“The New York winters are brutal, with the wind and all, I don’t care,” 23-year-old Hannah Maute told the Times. “I bought gloves specifically so that I could hold my iced coffee.”

Last month, Starbucks reported that 75% of its drink sales were from cold beverages. The company said its customers are more likely to request add-ins to their cold drinks, such as syrups and milks, than they are to their hot beverages, which raises the price of the beverage. Starbucks also said that cold beverages are popular with Gen Z customers.

“The variety and the newness factor of some of their drinks that they implement makes it fun,” Maute told the Times, referring to Starbucks. “Iced coffee for me isn’t even about energy, it’s about fun.”

Maute doesn’t like hot coffee because of the temperature guessing game. It’s too hot to drink right away, and then there’s only a short amount of time that the temperature is ideal. Then the drink is lukewarm, and the taste is ruined, she said.

However, 22-year-old Brianna Fornes differs from her Gen Z cohorts. She told the Times a hot coffee in the morning is like a “warm hug.”

But she is one of few in a vast sea of iced-coffee drinkers, which is evident during her trips to Starbucks where they often mistake her hot caramel macchiato for an iced version.

“Everyone just looks at me crazy because they’re like, ‘It’s so hot, why are you getting a hot drink?’” she told the Times. “Then she gives me a cold Caramel Macchiato, and I was like, ‘Oh, I asked for this hot,’ and she was like, ‘Oh my God, my mistake.’ They just redid the whole thing. And they ended up giving me both.”

Despite the cold coffee craze, Beverage Industry reports that coffee, not including RTD or refrigerated beverages, has seen a growth online and with single-serve pods.

“Creating a specialized drink coupled with the convenience of having a cup in the home office has transformed the coffee landscape,” Sally Lyons Wyatt, executive vice president and practice leader at IRI told Beverage Industry. “Using flavors/additives have boosted the at-home cup of coffee into a unique, tasty offering. In fact, we find that coffee concentrate and flavor additives are growing in brick-and-mortar.”

Keurig Dr Pepper is hoping to capitalize on the coffee-at-home trend with its new K-Café Smart machine, which aims to better replicate the coffeehouse experience, reports Food Dive.

“Just having a black cup of coffee out of a pod is just not enough for consumers today,” Annie Oh, vice president of Keurig Experiences with Keurig Dr Pepper, told Food Dive. “They want a bigger, broader experience, and they’re going to coffee shops to get it but now we’re offering it through Keurig.”

The machine detects the specific K-Cup pod in the brewer, and users can view drink recipe recommendations for that pod via the Keurig mobile app. It also recognizes the specific brand and roast of each K-Cup pod and automatically customizes the brew settings to the recommendations of the coffee roasting expert who created it.

“We know coffee is personal, everyone likes it in a different way,” Oh told Food Dive. “But they also need some of those guided experiences, which we’re trying to help them with. [K-Café Smart] takes that intimidation factor out so you can now make a similar type of beverage at home for a fraction of the cost.”

Although the machine does focus mostly on hot coffee creations, it does have the ability to make cold foam for iced beverages.

After struggling significantly in 2020, hot dispensed beverage sales rebounded in 2021, according to the NACS State of the Industry Report of 2021 Data. However, coffee sales remained the most impacted by consumer habit shifts and the slow return of the morning commute.

To read more about coffee trends and what consumers are demanding in their brewed drinks, read “Caffeine Fix” in NACS Magazine.

The 2022 NACS Show, October 1-4, in Las Vegas includes four education sessions on foodservice: Menu Optimization: Think Like a RestaurantGlobal Foodservice Trends & MenusFoodservice Analytics: The Recipe for Success and Gulp! Reinvigorated Dispensed BeveragesRegister today to attend the NACS Show.