After teasing the launch last year, Coca-Cola with Coffee was finally released this week, making it the latest ready-to-drink (RTD) offering to hit the market. RTDs, particularly those with coffee or that promise health benefits, have seen massive growth in recent years, with many relying on digital strategies to advertise and sell their products. Fortune Business Insights estimates “the global ready to drink (RTD) coffee market size was valued at USD $22.44 billion in 2019 and is projected to reach USD $42.36 billion by 2027, exhibiting a CAGR of 8.31% during the forecast period.” Multichannel digital campaigns that build consumer interest for both online ordering and brick-and-mortar shopping are helping RTD scale.
RTD Brands Offer Convenience And Multiple Purchase Options, Including Subscriptions
The rise of RTDs can be attributed to a number of factors, including rising consumer interest in wellness, particularly alternatives to dairy and sodas and the convenience of ecommerce and subscriptions. Premiumization (something appealing because of superior ingredients or benefits) trends are also driving interest in RTDs, with some consumers caring less about savings and more about fair trade, organic ingredients and other “premium” characteristics.
Major brands, like Chobani and Starbucks, are offering inventive RTDs promoted via digital channels. Smaller brands, like Goldthread and Rise Brewing Co., are connecting with consumers through email and SMS strategies, subscriptions and by matching evolving consumer preferences. “The innovation I’m currently seeing in RTD rivals even that of some of the top coffee cafés,” said Jill Failla, foodservice analyst with Chicago-based Mintel. “For example, there's been a quick rise in the number of RTDs offering functional ingredients and benefit claims, from adaptogens to nootropics. Young consumers and Hispanic consumers are core consumers of RTD coffee, which bodes well for the continued future growth of this format.”
Chobani + Alternamilks
Differentiation is an effective and necessary strategy for brands within markets that are suddenly inundated with offerings. The explosion in popularity of alternamilks like soy, almond and oat milk gave Chobani an in with their new RTD “Chobani Coffee.” (Cow milk drinkers aren’t left out as the brand seeks to integrate their existing products, including Chobani dairy creamers, into their new RTDs.) “Chobani Coffee is crafted from single origin 100% Arabica beans, geared for the passionate coffee drinker looking for cold-press brews who love the added taste of creamers made from farm fresh milk and oat milk,” explains the brand.
Chobani deployed an integrated digital advertising campaign ahead of its launch of Chobani Coffee, leveraging paid and earned media across social media platforms like Instagram and Twitter. The creative for Chobani emphasizes the tagline “crafted with good ingredients and good intentions,” leaning into Chobani’s reputation as a socially responsible, health-focused brand. Failla notes that “Non-dairy milk alternatives are a large part of the RTD market’s innovation. Consumers are seeking them out for health and taste reasons alike, and unsurprisingly, interest is driven by Gen Zers and Millennials.”
Goldthread + Wellness
Goldthread’s plant-based RTD tonics, including Turmeric Radiance, Hawaiian Ginger and Honey Rose, bring convenience to consumers focused on wellness. Goldthread describes their tonics as “brewed formulation of super herbs, spices and adaptogens that restore, refresh and invigorate our mind, body and soul.” In addition to active social media feeds, Goldthread also relies on email to keep consumers informed about “new products, recipes, special events and more.” Email campaigns are an ideal way to nurture consumers, create more personalized relationships and drive sales with promotions and product announcements. Email engagement can provide timely first-party data offering insight into what matters to consumers, which can be used for future segmenting, targeting and personalization. Goldthread encourages website visitors to sign up for email updates by offering 15% off first orders.
Starbucks + Illy
Starbucks and Illy both added new RTD products to expand their customer bases. When Illy, a very popular Italian coffee brand, introduced its RTD canned cold brew “they [hoped it would be] their ‘first handshake’ with a younger generation of customers.” And, though Starbucks has long offered a variety of RTDs, the brand continues to introduce new products, like the latest Nitro Cold Brew. “To build on the success of Starbucks Nitro Cold Brew in our retail cafes and meet the evolving needs of consumers in the category, we are excited to launch a line of RTD Starbucks Nitro Cold Brew beverages to expand the reach to even more people.” Starbucks has tremendous brand loyalty, built through a combination of its Starbucks Rewards program, seasonal products launches, digital strategies including hashtag campaigns and community based initiatives and partnerships.
Rise Brewing Co + Subscriptions
A subscription is the perfect way to keep the caffeine coming, which is just what Rise Brewing Co. tapped into with their 14-day, 30-day and 60-day coffee subscriptions. Rise Brewing Co. offers subscriptions for their coffees, teas, lattes and oat milks, and has a gifting option for 3-month, 6-month and 12-month subscriptions of their original Classic Black nitro cold brew. Subscriptions have grown in recent years, with the rise of ecommerce. For Rise Brewing Co., email and SMS messaging coordinated with strategic partnerships and promotions like the brand’s recent pairing with FOX Sports for the 2020 college football season support growth of its subscription offering.
RTDs Are Here To Stay As Ecommerce & Convenience Match Consumer Preferences
The popularity of coffee and healthy RTDs isn’t likely to slow, as consumers increasingly appreciate convenience during difficult times and as more and more ecommerce platforms make it easier than ever to order online for seamless delivery. Whether it’s a popular coffee type or premium ingredients, differentiation matched with ease is likely to pique the curiosity of consumers and gain new, loyal customers.
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