### Rise of Cold Coffee Consumption in America

Cold coffee consumption in the U.S. has surged, driven by younger generations embracing it as an all-year beverage.

### The Rise of Cold Coffee: Trends, Preferences, and Market Growth in the U.S.
* 🥤 Between 2016 and 2023, consumer spending on cold coffee in the U.S. **more than doubled**, contrasting with a **20% growth** in hot coffee consumption.
* 📈 Dunkin' reported a **50% growth in iced drink sales** since 2019, with iced beverages now making up **two-thirds of its total beverage sales**.
* 🌨 The shift in consumer preference is evident, as people are seen **enjoying cold brews even in winter**, a trend that has emerged **relatively recently**.
* 💰 In 2023, Americans spent nearly **$88 billion** on out-of-home coffee purchases, with about **20% attributed to cold coffee**.
* 📊 Starbucks controls around **25% of the U.S. coffee market**, and its cold beverage sales surged from **less than 40% to 75%** from 2013 to 2021.
* 👶 Younger generations, particularly Gen Z and millennials, are driving the trend towards cold coffee, with **26% of U.S. teens consuming cold coffee** compared to **18% for hot**.
* 📱 The aesthetics of cold coffee drinks, enhanced by **social media-friendly packaging**, contribute to their popularity among younger consumers, who favor **customization and flavor diversity**.
* ☕ While cold coffee is gaining traction, hot coffee remains the dominant choice, but the market is expected to see **significant growth in cold coffee offerings** over the next five years.

Between 2016 and 2023,
consumer spending on cold coffee – which includes iced
coffee, cold brew, and frozen coffee drinks – more than
doubled in the U.S. Hot coffee, on the other
hand, grew about 20%.

Lots of ice is key. We want it
super, super cold. You know, I see an iced coffee being
made on social media and they're shaking their ice
around. I'm like, 'Well, maybe I want an iced coffee now.'

Like, it truly works. You can see that iced coffee
really is at the forefront of advertising for chains like
Dunkin'. The company told CNBC that
since 2019, it's grown its iced drinks by 50%, and they
now represent two-thirds of

its total beverage sales. It can be ten degrees and snow
will be falling, and there will be people who will be
clutching their cold brew coffees as they walk to work. And that was not the case
until relatively recently.

So why do Americans love
putting this traditionally hot beverage over ice? And will cold brew and iced
coffee eventually take over? Americans spent nearly $88
billion on out-of-home coffee purchases in 2023. Vanilla latte? About 20% of
that was on cold coffee.

But tracking at-home cold
coffee consumption can be hard. A lot of people are taking
standard ground coffee, putting it in, you know, a
pitcher or something, and letting it brew overnight,
and making cold brew. And how on earth do you track
that?

And the answer is, you can't. Sales at coffeehouse chains
can help paint a clearer picture. Starbucks controls
about 25% of the U.S. coffee and snack shop market. The way it usually works in
the U.S.

is that coffee trends start
at the coffee shop and above all, at the big chains like
Starbucks. So, the way to look at it is,
when did they really start pushing the cold beverages? That's about when cold brews
start reaching those

restaurant menus. And then
that shapes what good coffee is thought to be like in the
minds of consumers, which then in turn shapes things like
their at-home consumption patterns. From 2013 to 2021, Starbucks
U.S.

cold beverage sales grew from
less than 40% to 75% of all drinks sold. It's important to note that
this includes non-coffee drinks as well. For Dutch Bros, a West
coast-based coffee chain, cold

drinks account for about 90%
of its beverage sales. About half of that is cold
coffee. The rise of caffeinated
alternatives like energy drinks may help explain the
appeal of iced coffee as well. Americans' love of soft drinks
in general.

So, the view is, how can we
make coffee into a soft drink? In the U.S., ready-to-drink
coffee is almost always drunk cold, and consumption is up
over 40% between 2019 and 2023. That is much higher
than the global growth rate.

Even without Japan, who accounts for about half of the total market and disproportionately skews the data. When you look at the big chains, they shape consumer tastes, but they also reflect consumer tastes. And so I think there's a little bit of both happening there.

right where consumers clearly are asking more for cold beverages. That's driven largely by Gen Z, by millennials. The skew is pretty clear that the younger consumers prefer cold coffees, iced cold brew, etc.. The divide between iced versus hot coffee drinkers is largely generational.

Americans age 18 to 24 are the largest consumers of cold coffee. A survey found that about half of respondents had it within the past day. The second largest cold-coffee drinking cohort was respondents aged 25 to 39.

And there was a big drop off then in the Gen X and the boomers. They'll drink cold coffees. They'll drink some cases, cold brews or iced coffee, but it's really more like a summertime thing when it's hot out.

Whereas the millennials and especially Gen Z really broke free of that seasonality. And that's the key difference, is that they view it as an anytime beverage rather than a seasonal thing. As a Gen Z coffee drinker myself, I almost always opt for an iced coffee.

And for me personally, it's because it lasts longer than a hot coffee. If I'm at the office, I want something that I can sit at my desk and sip on for a few hours.

I think there's definitely
less exploration. There is less craving for
variety with those older generations. Since coffee has
such an established background as this hot beverage, I think
it's kind of hard to break that mindset with a
generation that for so much of

their lifetime, it has just
been that hot beverage. A 2023 Mintel report found
that 26% of U.S. teens consume cold coffee,
while about 18% consume hot. One reason behind its
popularity amongst younger

generations is because it's
an easier entry to coffee. It's highly customizable, and
you can add lots of flavors and toppings that help divert
from the natural, bitter taste of coffee. Increasingly, that younger
consumer that is not just

asking for a very plain cup
of hot coffee, right? They want a coffee-based
beverage that has something more to it, and I think
that's reflected in that marketing and promotions. Thank you. Enjoy, have a nice day. The clear plastic cups
that cold coffee typically

comes in lends itself very
well to the age of social media. These new drinks are a
Starbucks Wicked collaboration, so you can see
that the foam on top is actually green, and as you
swirl it around, it mixes into

the drink. There's some like,
sparkles on top. All of these colors and
esthetics simply wouldn't be possible if it were a hot
drink. Even though many younger Americans view cold
coffee as an all-year-round beverage, companies like
Starbucks have seen a clear

dip in the winter months. One of the reasons Europe hasn't fully adopted cold coffee is because of, I think, the climate, and they're still largely driven by hot coffee, and, you know, especially in northern Europe.

Americans as coffee drinkers are much more experimental, right? They don't have a very strong coffee culture that you'd find in a place like Brazil or Turkey, Italy. There's that long historical tradition, a sense of here's

how we make coffee. Traditionally, Americans are much more into trying new things in terms of the trends right now spreading around the world, things like cold brew, like nitro. They're coming from the United States. Many coffee makers like Nespresso and Keurig are

jumping on the iced coffee bandwagon, too. Nespresso released a ready-to-drink canned beverage for the first time this summer, and Keurig is now selling a coffee machine that brews hot and then flash chills it to make

iced coffee. Still, cold brew and iced coffee have some ways to go before catching up to their hot counterpart. Hot coffee is still by far the most popular way Americans consume coffee. Though a big part of our growth expectation is just

that more and more restaurants and food service operators are going to add this to the menu. And so our expectations are very bullish for growth of the cold coffee category over the next five years.

Why Americans Love Iced Coffee

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Consumer spending on cold coffee more than doubled between 2016 and 2023, while hot coffee growth was only about 20%.

The visual appeal of iced coffee preparation on social media influences consumption.

Iced drinks have grown by 50% since 2019 for chains like Dunkin', representing two-thirds of their beverage sales.

Cold coffee consumption is now prevalent year-round, unlike in the past.

In 2023, about 20% of the nearly $88 billion spent on out-of-home coffee purchases was on cold coffee.

Tracking Cold Coffee Consumption and Industry Trends

Tracking at-home cold coffee consumption is difficult due to home brewing methods.

Coffeehouse chains' sales provide a clearer picture of trends, with Starbucks controlling a significant market share.

Cold beverage trends originate in coffee shops and large chains, influencing consumer perceptions and home consumption.

Starbucks' cold beverage sales grew from less than 40% to 75% of all drinks sold between 2013 and 2021.

Dutch Bros, a West Coast chain, has cold drinks accounting for about 90% of its beverage sales.

Factors Contributing to Cold Coffee's Popularity

Ready-to-drink coffee consumption is up over 40% between 2019 and 2023 in the US.

Large chains both shape and reflect consumer tastes.

Younger generations (Gen Z and Millennials) drive the demand for cold beverages.

18-24 year olds are the largest consumers of cold coffee, followed by 25-39 year olds.

Generational Differences in Cold Coffee Consumption

Gen X and Boomers tend to consume cold coffee seasonally, unlike younger generations.

Millennials and Gen Z view cold coffee as an anytime beverage.

Longer lasting nature of iced coffee is a factor for some consumers.

Older generations show less exploration and variety in coffee choices.

A 2023 Mintel report showed 26% of US teens consume cold coffee, compared to 18% consuming hot coffee.

Customization and Marketing of Cold Coffee

Customization options and flavor additions make cold coffee more appealing, especially to younger consumers.

Clear plastic cups enhance the visual appeal of cold coffee on social media.

Visual elements like colors and aesthetics are better showcased in cold coffee drinks.

Even with year-round consumption, companies see dips in cold coffee sales during winter months.

Global Cold Coffee Trends and Future Outlook

Europe's adoption of cold coffee is slower due to climate and existing hot coffee culture.

American coffee drinkers are more experimental compared to countries with established coffee traditions.

Cold brew and nitro coffee trends originate in the US.

Coffee makers are adapting to the trend by releasing ready-to-drink beverages and cold brew machines.

Hot coffee remains the most popular way Americans consume coffee, but cold coffee is expected to grow.