J.M. Smucker’s Café Bustelo enters refrigerated aisle with iced coffee

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Dive Brief:

• J.M. Smucker’s Café Bustelo brand is entering the refrigerated aisle for the first time with the launch of Café Bustelo Espresso Style Iced Coffee Beverages.
• The product comes in a 40 fluid-ounce multi-serve bottle with three varieties, vanilla, unsweetened and sweetened. The ready-to-drink iced coffees, with a suggested price of $5.99, are available at Target and will be available at Walmart and Kroger in the future.
• 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 in 2022 to $3.11 billion by 2030, data from Skyquest showed. 

Dive Insight:

Last year, a third of coffee consumed out of home was cold, according to food and beverage giant Nestlé. Younger generations, in particular, have embraced drinking their coffee cold. Competitor Keurig Dr Pepper estimated 73% of Gen Z consumers between the ages of 18 and 24 drink iced coffee weekly.

As coffee brands look for new avenues of growth and seek out younger consumers, moving into the refrigerated section is a logical step. Beverage manufacturers also likely view iced coffee as another occasion to keep consumers within a brand as people may not always want a hot beverage, or their preferences change as they get older.

“In recent years, we’ve started to see many of our coffee customers, both young and old, reach more and more for iced coffee — but they still want that iconic flavor of Café Bustelo’s espresso style roasts that they love,” Eduardo S. Merino, senior brand manager of Café Bustelo, said in a statement. “This new product intentionally combines our nearly century-long mastery of coffee with a cold and refreshing taste for an iced coffee that is brand-new, but somehow feels completely familiar to our Café Bustelo family.” 

The majority of Café Bustelo’s growth recently has come as the brand expands outside of the East Coast into new U.S. markets. Smucker said the coffee product is on pace to exceed $300 million in net sales this fiscal year.

Smucker is not the only large CPG company exploring the iced coffee space for growth. In May, Nestlé debuted Nescafé Espresso Concentrate to appeal to cold coffee drinkers just a few months after bringing its popular Coffee Mate creamer brand into iced coffee.

Smucker said the new iced coffees for the century-old Café Bustelo brand embrace the espresso tradition while offering a new coffee experience for those who prefer their brew over ice. While iced coffees have exhibited year-round appeal, Smucker is debuting its Café Bustelo offering just in time for the warm summer months.