Cold brew experiences growth in the UK market
Cold brew coffee’s flavour profile and mouthfeel drive its growth in popularity in the UK. Image credit: Finlays
While cold brew coffee is already a strong category in the US, it is at an earlier stage in the UK. Preferred by younger consumers, cold brew is growing quickly and has untapped potential throughout the UK given its inherent characteristics. By Kathryn Brand
Brits still may not like their tea cold but they are embracing cold coffee – cold brew to be exact.
Thom Walton, global head of marketing at Finlays, a B2B manufacturer and supplier of tea, coffee and extract ingredients, including cold brew, commented that the UK cold brew market “first started to emerge in 2015, with availability largely focused on London. Since then, however, the category has seen strong growth with the number of retail stores and foodservice outlets offering cold brew increasing 140 percent CAGR, to reach consumers across the UK.”
Cold brew is made by soaking or ‘steeping’ coffee beans in cool water for at least a day in order to extract the flavours from the beans. Due to the gentle process and no need for high temperatures or pressures, the resulting product offers consumers a smoother, naturally sweeter, less acidic beverage. Walton explained that medium and dark roasts, coarsely ground, are best suited for the slow extraction process, “preventing over-extractions and bitterness, instead producing that velvety cold brew experience.”
It may be a niche market in the UK now, but the cold brew coffee market is experiencing rapid growth. Infographic credit: Finlays
It is this flavour profile and mouthfeel that Walton attributes to cold brew’s growth in popularity. “Finlays’ own UK consumer research found that once people start buying cold brew, they can’t stop,” he said, noting, “Of those surveyed, nearly half (43 percent) reported drinking cold brew at least once a month, while others drink it weekly (15 percent) and some even daily (8 percent).”
A new flavour and format
Its smooth taste, strong coffee flavour, and lower acidity compared to regular coffee offers a different consumption experience for consumers, especially those who want to diversify their coffee shop or café order. Cold brew has seen an increasing adoption in coffee shops and cafés, fuelling its growth on the back of the simultaneously growing coffee shop culture. Ilaria Abagname, a consultant at Euromonitor International, explained that “coffee shops play a key role in terms of innovation, as they act as a hub for educating consumers about new products, approaches to new coffee varieties and brewing methods, as well as syrups and flavours or alternative milk options.”
Consumers are increasingly interested in trying new and unique coffee flavours, said Abagname, adding, “cold brew allows for play and experimentation with flavours and ingredients, enabling a wide range of customisation options.” This is especially utilised in ready-to-drink (RTD) formats of cold brew, which offer a significant bolster to the category as RTD in itself is a growing market. One example is the use of nitrogen gas in cans to make nitro cold brew coffee, which gives the beverage a smoother texture and enhances its sweetness while reducing bitterness.
Major brands like Starbucks, Costa, Emmi, and Arctic Coffee dominate RTD/iced coffee in the UK, revealed Walton, and introduce flavour variations for their consumers. He used Califia Farms as an example, which introduced a pumpkin spice flavoured cold brew to its existing range in autumn 2022, driving the consumption of cold brew beyond the warmer summer months and showing how cold brew can provide a platform for flavour innovations to expand the category.
But it is convenience that may be the main draw for consumers. “We found that cold brew meets various consumer needs, from on-the-go refreshment to a quick caffeine boost,” noted Walton. According to data from NeilsenIQ, the RTD/iced coffee segment has grown from GBP £69.3 million in January 2023, to £77.1 million in January 2024, which in turn delivers growth in the cold brew segment.
“The growth of the RTD market has provided a significant boost to the cold brew trend by making it more convenient and accessible,” explained Abagname. “In fact, the RTD format has expanded its reach beyond coffee shops and cafés, making iced coffee and cold brew options available in retail spaces at an affordable price. This increased availability has promoted cold brew to a wider audience, driving its popularity further.” It offers consumers convenience and on-the-go consumption opportunities, all areas that consumers are demanding from the brands.
“Another factor driving awareness of cold brew,” commented Walton, “is the presence of multi-serve formats in retail. While single-serve formats occupy a stronghold in grab-and-go fridges, cold brew can also be found in a multi-serve format in the main aisles.” Although this may currently be a smaller segment of the market, it does give consumers a convenient and affordable way to consume cold brew at home, especially with cold brew being marketed as a more premium beverage offering, with a price to match.
Appealing to younger consumers
Cold brew is building a consumer base from customers who want an alternative to sugary iced coffees. As cold brew is a naturally sweeter beverage, it requires less sugar or sweeteners, which appeals to many consumers. Its convenience, grab-and-go attributes, and potential health benefits are reasons why cold brew is particularly desirable to Gen Z and millennial consumers, who are increasingly mindful of health.
Image: Finlays
Cold brew offers new drinking occasions for coffee, “such as an after-lunch pick-me-up, or in the evening as an alternative to alcohol,” said Walton. The premium nature of cold brew presents it as an alternative to alcohol for social occasions and gains support from the low and no alcohol trend.
“A key factor is that millennials and Gen Z are drinking alcohol more mindfully than previous generations, while also seeking healthier beverage options. This has driven demand in the ‘low and no’ alcohol category where cold brew plays a key role in innovation. Younger consumers are also much more receptive to exciting new beverage concepts and a premium drinking experience meaning they’re willing to try new things and to pay more for them,” shared Walton.
Abagname further added that cold brew coffee offers experimentation with flavours and ingredients and customisation. “This aspect of cold brew appeals to younger consumers who value variety, novelty, and the ability to personalise their food and beverage choices.”
A hot future for cold brew
Commenting on the future of the UK cold brew market, Walton revealed that we only need to look towards the US. “Looking at the trajectory of cold brew coffee in the US over the last ten years, there’s a clear direction of travel for the UK and Europe over the next decade. While the UK market is small, at Finlays, we believe the UK is about to follow the US in having its own cold brew moment with fast growth anticipated over the next few years.” He said that in the UK, currently, “the cold brew coffee market segment is valued around £10 million, however this is expected to reach £26 million by 2027. This presents a superb opportunity for brands who seize the initiative by bringing cold brew coffee into the mainstream.”
Finlays, which operates a cold brew facility in Hull, Yorkshire, UK, anticipates the continued growth of the category across the UK and Europe, as shown in the infographic above.
Meanwhile, Abagname emphasised the increasing interest in functional beverages and wellness-oriented products. “Cold brew may incorporate additional health benefits or functional ingredients, appealing to consumers looking for beverages that support their overall well-being.” She cited the UK brand Rokit Health, which offers cold brew coffees made with oatmilk and added vitamins and minerals. Noting consumer demand for reduced fat and sugar options, and cold brew’s adaptability, Abagname said the category can meet this demand, further encouraging its growth.
So, while the cold brew may currently be more of a niche market in the UK, it has a lot of potential to build on a wide variety of trends – from convenience to customisation to innovative flavours to healthier options to plant-based additives – that will secure its continued success.
- Kathryn Brand is an associate editor on T&CTJ, while still writing for several of Bell’s other magazines. She joined Bell Publishing at the beginning of 2022 after graduating from the University of East Anglia with a degree in English Literature and Creative Writing. She may be reached at: [email protected].
