Dive Brief:
- Nestlé is bringing its popular Coffee mate creamer brand into iced coffee, the food and beverage giant said. The product will be sold in two flavors: French vanilla and caramel.
- The Coffee mate Iced Coffee, which is available in retailers across the U.S., is the first major innovation for the brand since its inception more than 60 years ago.
- The move into the iced coffee space by Nestlé is the latest effort by a CPG company to take strong equity with an existing brand and use it to enter a nearby category to grow sales and boost consumer recognition of a product.
Dive Insight:
The new iced coffee from Nestlé is a logical transition for a brand that is already closely associated with the popular caffeinated beverage.
The Switzerland-based company said Coffee mate is the No. 1 “coffee enhancer” in the $6.4 billion whitener/creamer category. Roughly a third of coffee cups that are “whitened” use Coffee mate.
Nestlé is no stranger to coffee, with a portfolio that includes well-known brands such as Nescafé, Blue Bottle, Taster’s Choice and Nespresso. Rather than lose sales to another company, it’s a smart move for Nestlé to bring together two categories where it already has a strong presence in order to capture sales in the trendy and fast-growing iced coffee category.
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.
Information provided by other coffee companies echoes a similar theme. According to Keurig Dr Pepper, 73% of Gen Z consumers between the ages of 18 and 24 drink iced coffee weekly. 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.
“Enjoying cold coffee year-round has become a ‘personality trait’ for many coffee drinkers who are choosing iced over everything,” Leonardo Aizpuru, Nestlé’s vice president of brand marketing for its beverage division and business unit, said in a statement. “This growing love for iced coffee – especially among Gen Z – presented an ideal opportunity for Coffee mate to move beyond creamers for the first time in its 60+ years since inception.”
The presence in cold brew also expands the retail presence for Coffee mate, while increasing the usage occasions for the brand, particularly among younger consumers.
A consumer, for example, could add Coffee mate to their morning brew at home and then later drink the new Coffee mate Iced Coffee on the go or at the office. By playing in iced coffee, Nestlé has the added benefit of potentially grabbing Gen Z and other younger individuals who could remain users of Coffee mate and the company’s coffee brands as they age due to their familiarly with them.
Each bottle of Coffee mate Iced Coffee contains about 5 servings of whitened coffee, Nestlé said. It also has 25% less sugar than the leading dairy-based competitor.
