Ready-to-drink (RTD) Coffee Beverage Market Expected to Reach $53.5 Billion by 2032

Ready-to-drink (RTD) coffee beverage market was valued at $33.0 billion in 2022, and is estimated to reach $53.5 billion by 2032, growing at a CAGR of 5%

WILMINGTON, DELAWARE, UNITED STATES, April 16, 2024 /EINPresswire.com/ -- Ready-to-drink (RTD) coffee is a convenient and pre-packaged beverage that requires no brewing or preparation, offering a quick and portable alternative to traditional coffee. Typically found in bottles or cans, RTD coffee blends brewed coffee with milk, sweeteners, and flavorings, catering to on-the-go consumers.

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The rise in health and wellness trends among consumers has significantly impacted the ready-to-drink (RTD) coffee market, driving a significant increase in consumer demand. As individuals become more health-conscious, there is a growing preference for beverages that provide a quick energy boost and align with healthier lifestyle choices. Ready-to-drink coffee manufacturers have responded by incorporating health-focused ingredients into their products, such as the inclusion of antioxidants, natural sweeteners, and functional ingredients known for various health benefits. For instance, Bulletproof coffee’s original blend features green coffee bean extract for antioxidants and monk fruit extract for a zero-calorie sweetness, along with grass-fed butter and medium-chain triglycerides (MCTs) for sustained energy. As a result, this shift toward healthier formulations taps into the evolving preferences of consumers who seek convenience while prioritizing nutritional value, which has helped boost the ready-to-drink (RTD) coffee beverage market demand.

Moreover, the integration of health-focused attributes positions ready-to-drink coffee as a versatile beverage that caters to the evolving demands of the modern, health-conscious consumer, which has set a ready-to-drink (RTD) coffee beverage market trends in recent years. The health and wellness trend in recent years has prompted the development of ready-to-drink coffee products that cater to specific dietary needs, such as low-calorie options, sugar-free alternatives, and plant-based formulations. As consumers become more conscious about the impact of their food and beverage choices on overall well-being, the market has witnessed an expansion of ready-to-drink coffee offerings that taste good and align with health-conscious lifestyles. Thus, the convergence of convenience and health benefits has created a market demand that boosts the ready-to-drink (RTD) coffee beverage market growth, appealing to a broad number of consumers seeking a balance between on-the-go convenience and healthier beverage consumption.

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Even though coffee concentrate has experienced rapid growth, there are certain factors which hamper the growth of the market. Extreme weather changes such as drought, frosts, and pests significantly damage coffee crops, which reduces production and disrupts timely supply of coffee beans to the market, which creates challenges to produce coffee concentrate products. For instance, in November 2021, global coffee prices surged due to challenging conditions in Brazil, including drought, frost, and unusual weather patterns. This trend continued into 2022, with a 14.8% increase in coffee product prices observed in grocery stores.

The major players operating in the global ready-to-drink coffee market are Nestle SA, The Coca-Cola Company, Starbucks Corporation, illycaffè S.p.A., Danone SA, Lotte Chilsung Beverage Co., Califia Farms, LLC, La Colombe Coffee Roasters, Suntory Beverage & Food Limited, and Gujarat Co-Operative Milk Marketing Federation.

As per the data provided by the International Monetary Fund (IMF), the global price of coffee exhibited fluctuations throughout the year 2022, ranging from a high of $6.17 per kg in February to a low of $4.63 per kg in December. Manufacturers of coffee concentrate often operate with tight profit margins. Rapid or unpredictable increases in raw material prices erode these margins, affecting the overall profitability of the business operating in the coffee concentrate market. The competitive pricing of the coffee concentrate market increases this challenge, with manufacturers hesitant to raise prices for fear of losing market share to competitors. These uncertainties affect the quality of coffee concentrate and hinder potential investments & expansion efforts in the industry, thereby impeding the overall coffee concentrate market growth.

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In addition, innovative paper and cardboard packaging have created several opportunities in the ready-to-drink coffee market by addressing environmental concerns and appealing to eco-conscious consumers. As sustainability becomes a central focus in consumer preferences, brands adopting eco-friendly packaging solutions gain a competitive edge over other players operating in the market. Paper and cardboard, being renewable and biodegradable materials, reduce the ecological footprint of ready-to-drink coffee products. Brands utilizing innovative paper packaging often emphasize their commitment to environmental responsibility, attracting environmentally conscious consumers who seek sustainable alternatives. Thus, the shift toward eco-friendly packaging aligns with global efforts to reduce plastic waste and promotes a positive brand image, that results in increased customer loyalty and expansion of ready-to-drink (RTD) coffee beverage market size in the coming years.

The ready-to-drink coffee market is analyzed on the basis of product type, cream content, packaging, distribution channel, and region. By product type, the market is segmented into cold brew and others. By cream content, the market is divided into dairy-based, and plant based. Depending on packaging, it is classified into bottles, cans, and tetra packs. By distribution channel, the market is divided into supermarkets/hypermarkets, departmental stores, convenience stores, online sales channel, and others. Region-wise, the market is analyzed across North America (the U.S., Canada, and Mexico), Europe (Germany, the UK, France, Italy, Spain, and the rest of Europe), Asia-Pacific (China, India, Japan, South Korea, Australia, ASEAN, and the rest of Asia-Pacific), Latin America (Brazil, Colombia, Argentina, and the rest of Latin America), and Middle East and Africa (GCC, South Africa, North Africa, and the rest of MEA).

By product type, the cold brew coffee segment dominated the global ready-to-drink (RTD) coffee beverage market in 2022 and is anticipated to maintain its dominance during the forecast period. Cold brew ready-to-drink (RTD) coffee dominates the market owing to the distinct flavor, smoother taste, and reduced acidity of it as compared to hot-brewed coffee. The brewing process of cold brew ready-to-drink coffee involves steeping coffee grounds in cold water for an extended period, which results in a less bitter and concentrated beverage. This method appeals to consumers seeking refreshing and less acidic options. In addition, the rise in health-consciousness and demand for lower-calorie, less sugary alternatives further boost the popularity of cold brew RTD coffee, establishing it as the preferred choice in the rapidly expanding RTD coffee market.

By cream content, the dairy segment dominated the global ready-to-drink (RTD) coffee beverage Industry in 2022 and is anticipated to maintain its dominance during the forecast period. Dairy-based creams such as milk or creamers offer a familiar and comforting taste, appealing to a broad consumer base which has helped increase its share in ready-to-drink (RTD) coffee beverage market share. Ready-to-drink options with dairy cater to those desiring a traditional coffee experience, making them popular among a diverse range of consumers. Dairy based ready-to-drink coffee products are favored for their indulgent and smooth qualities, enhancing the on-the-go coffee consumption experience.

By packaging, the bottle segment dominated the global ready-to-drink coffee market in 2022 and is anticipated to maintain its dominance during the forecast period. Bottled RTD coffee offers a convenient, spill-proof solution for consumers on the move, preserving freshness and flavor while aligning with fast-paced lifestyles. The sealed, portable design of bottle requires no additional accessories, providing hassle-free experience. Transparent bottles create a sense of trust among consumers by allowing visual assessment of the product. These factors, including convenience, efficiency, and transparency, contribute to the widespread popularity of bottled packaging in the RTD coffee market, catering to the needs of on-the-go consumers seeking quality and convenience.

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By distribution channel, the supermarkets/hypermarkets segment dominated the global ready-to-drink coffee market in 2022. Consumers increasingly prefer buying ready-to-drink coffee from supermarkets and hypermarkets due to their convenience, variety, and accessibility. These retail environments offer a one-stop shopping experience with diverse RTD coffee brands, flavors, and formulations available in one place. Extensive shelf space and strategic product placement enhance visibility, allowing easy exploration of options. Additionally, consumers can compare prices, read labels, and benefit from promotional offers, making purchasing RTD coffee in supermarkets and hypermarkets a convenient and efficient choice for quick coffee solutions.

Region wise, North America is anticipated to dominate the market with the largest share during the forecast period. The fast-paced lifestyle in North America goes well with the convenience of RTD coffee, making it popular among on-the-go consumers. The culture of takeout and coffee tradition fuels the acceptance of convenient options. Established RTD brands, ongoing innovations, and increased marketing promote broad awareness in the region. The diverse consumer base in North America enjoys a range of flavors, meeting varied preferences. Busy lifestyle and a vibrant ready-to-drink market drive the preference for RTD coffee in North America.

KEY FINDINGS OF STUDY

By product type, the cold brew segment was the highest revenue contributor to the market in 2022, which is anticipated to maintain its dominance during the ready-to-drink (RTD) coffee beverage market analysis.
As per cream content, the dairy-based segment was the largest segment in the global ready-to-drink coffee market during the ready-to-drink (RTD) coffee beverage market forecast period.
By packaging, the bottle segment was the largest segment in 2022.
Depending on distribution channel, the supermarkets/hypermarkets segment was the largest segment in 2022.
Region-wise, North America was the highest revenue contributor in 2022.

David Correa
Allied Market Research
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