Dive Brief:
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Keurig Dr Pepper is debuting its first family of coffee machines that give consumers more options when making iced coffee. Unlike previous models that offered a single brew size for an iced beverage, the new devices give users a greater selection of brewing options ranging from 8 – 12 ounces.
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The Keurig K-Iced brewers lineup, which features three new coffee makers and five Iced K-Cups, enables consumers to switch from a cold coffee to one that is hot depending on their preference. The brewers feature a ”brew over ice option” that automatically adjusts the brew temperature, starting hotter to extract the full flavor of the ground coffee and then cooling down to minimize ice melt.
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As millennials and Gen Z consumers show a penchant for exploring new coffee varieties and flavors, iced coffees have been among the biggest beneficiaries. The cold brew coffee segment is poised to grow from just under $500 million last year to $3.11 billion by 2030, data from Skyquest showed.
Dive Insight:
Keurig Dr Pepper’s coffee-making platform has long been associated with hot coffees brewed in the office or at home. But the beverage giant is giving a bigger boost to the popular beverage by focusing on consumers who like it cold. And for good reason.
According to Keurig Dr Pepper, 73% of Gen Z consumers between the ages of 18 and 24 drink iced coffee weekly. At the same time, the beverage maker said eight of out 10 iced coffee drinks are consumed at home. In recent years, cold and iced coffee have been getting more popular with consumers, even during the winter. At Starbucks, cold coffee makes up 75% of the drinks sold in warm months, and 60% of the drinks sold in winter, The New York Times reported.
“We’re excited to further expand our brewer and coffee portfolio to meet the needs of our consumers,” Becky Opdyke, senior vice president of coffee marketing at Keurig Dr Pepper. “With the new K-Iced line, consumers not only get that full flavored hot coffee they expect from Keurig, but also a refreshing iced coffee at the touch of a button – all in one coffee maker.”
Keurig remains a lucrative platform for its parent company with sales nearing $5 billion in 2022, the company said in February. Net sales during the year advanced 6.2%, driven by a 7% increase in price, offset by a 0.8% decrease in volume/mix. The Keurig brewing system is now available in 38 million U.S. households, an increase of 10 million from 2018.
As Keurig Dr Pepper looks for new ways to spur growth in its coffee business, a machine that allows people to make both iced and hot coffee, while having more control over how much to make, fits squarely with current trends and gives consumers additional flexibility, versatility and convenience.
But the Keurig K-Iced will find itself going up against a crowded category of ready-to-drink iced coffees manufactured by some of the biggest players in the beverage space.
Nearly every beverage or coffee maker has an offering, including Monster Beverage, Chobani, Danone’s Stok, Coca-Cola’s Costa and Dunkin, and PepsiCo, which has been selling Starbucks ready-to-drink coffees in stores for a quarter century. But it’s not only Big Food taking advantage of this trend. More startups, including Califia, Rise Brewing and La Colombe, also have launched ready-to-drink products.
