The ready-to-drink coffee market has undergone a remarkable transformation in recent years, evolving beyond the basic canned drinks that once dominated convenience store shelves. With an increasingly sophisticated consumer base demanding both quality and convenience, the segment has experienced explosive growth, with options like cold brew, nitro infusions, innovative flavours, and functional ingredients becoming increasingly popular.
This rapid expansion has attracted many players in the industry to enter the segment, from multinational beverage companies to small-batch roasters, creating a highly competitive landscape where simply offering another canned coffee product is no longer enough.
As coffee shops and roasters contemplate entering or expanding their presence in the RTD market, they face the critical challenge of differentiating themselves in an increasingly crowded space where consumers have more choices than ever before.
I spoke to Maciej Duszak, the co-founder and head of sales at Hardtank, and Timur El Ait, the founder and managing director of NOOZ, to find out how roasters can find their niche in the RTD coffee market.
You may also like our article on what roasters need to know about the RTD coffee market.
RTD coffee has come a long way
Although they have never been more popular, RTD products aren’t new to the coffee industry. Dating back to the 1960s, canned coffee drinks, both hot and cold, were widely available from vending machines across Japan.
Fast forward to the early 2010s when global cold brew consumption boomed, and the RTD market experienced further growth. Key industry players entered the segment, offering a diverse range of canned, bottled, and boxed beverages that appealed to a broader range of consumers.
From here, coffee businesses, both large and small, pushed for further innovation. The launch of products like La Colombe’s nitrogen-infused Draft Lattes, for example, redefined consumers’ expectations for RTD. It became an experiential beverage, with an emphasis on flavour and texture, rather than just a convenient caffeine fix to be grabbed off grocery retailer shelves.
By 2032, the global RTD coffee market is projected to hit over US $64 billion – indicating its mass appeal among today’s coffee drinkers and reflecting a fundamental shift in consumer behaviour and expectations.
“The main reason we are seeing such explosive growth in the RTD coffee market is the convenience and quality that are finally available together,” says Maciej Duszak, the co-founder and head of sales at Hardtank, a commercial cold brew equipment manufacturer and private label RTD coffee supplier. “Up until a few years ago, you had to choose one or the other. Nowadays, you can sip a delicious nitro cold brew made using single origin beans from a local grocery retailer.
“It has been a game-changer for the industry– not compromising on quality while also benefiting from convenience.”
And consumer demand will drive further innovation
As Gen Z coffee drinkers, in particular (who have the highest spending power in the industry) increasingly seek beverages that offer convenience and align with their lifestyle choices, RTD coffee brands are pushed to find new ways to differentiate.
The proliferation of plant-based, sugar-free, functional, and indulgent options underscores the need to meet ever-evolving consumer demand as people seek out customisable, quick, quality options.
For roasters and coffee shops, this presents a double-edged sword. While the market potential is enormous, their success depends on delivering not just innovative flavours and functional benefits but also maintaining the consistency and quality that modern coffee consumers have come to expect.
Staying competitive has never been more important
The fast-growing RTD segment is an exciting opportunity for roasters to flex their creative muscle, diversify their revenue, and capture more market share. But as more brands see the immense value of RTD coffee, finding success in the market becomes more challenging.
For specialty coffee roasters, one of the biggest hurdles is carefully navigating the balance of maintaining their brand ethos while meeting evolving consumer demand. The growing emphasis on indulgent flavours and functional ingredients, for instance, can easily detract from a brand’s core values if quality isn’t a priority.
Still, specialty coffee businesses will struggle if they can’t find ways to differentiate and cater to a wide variety of consumer needs and preferences.
“Advances in food science have enabled us to meet the evolving needs of the RTD coffee market, catering to diverse dietary preferences and intolerances,” says Timur El Ait, the founder and managing director of NOOZ, a functional coffee brand in the United Arab Emirates. “For example, the ingredients we use are GMO-free, gluten-free, lactose-free, and sugar-free, allowing us to reach a broader audience.”
Leveraging their extensive knowledge of flavour development and quality control means specialty coffee roasters can stay true to their core values when developing RTD products. At the same time, they have to be creative, stay ahead of trends, and diversify their product portfolio to capture the attention of consumers – or risk losing out to brands that have a competitive edge.
Barriers to finding success
Effective marketing is a key part of standing out in the RTD coffee market. The packaging alone must clearly convey not only essential information about the product but also effectively communicate a brand’s identity to customers within seconds. This is a challenging task for specialty coffee roasters that build their businesses on core values of transparency, exceptional quality, and sustainability.
“RTD is an extension of your brand in one of many ways – whether you want to focus on black coffee only or cater to a wider consumer group by offering more indulgent options,” Maciej says.
“You can also elevate a brand’s identity and make it more recognised by entering different distribution channels, such as vending machines, airports, or even airlines.”
Expanding into unchartered retail segments, however, requires specialist expertise. Food safety is a huge yet often overlooked consideration, meaning access to costly equipment and adhering to strict protocol is essential. The consequences of making mistakes can be lethal for both businesses and consumers.
“There are many challenges businesses deal with when selling RTD coffee. Co-packers often require high Minimum Order Quantities, the product has a shorter shelf life, and you need to use a cold chain to preserve quality and freshness,” Maciej says. “A lack of expertise in formulating RTD coffee beverages can lead to a lot of problems.
“When you start doing the calculations, you quickly understand that it’s much easier and safer to work with a trusted private-label manufacturer that is an expert in beverage-making like Hardtank.”
Developing custom RTD coffee requires expertise
The prospect of entering the RTD sector can spark new levels of creativity for roasters, but it also requires a careful, calculated approach if brands want to find long-term success.
Although roasters have a wealth of experience in sourcing exceptional coffees and developing optimal roast profiles, it’s not always straightforward to translate this in-depth knowledge to the RTD segment. This makes investing in a trusted partner that understands all corners of the market even more important.
“Hardtank offers complex formulation services – from a general concept through to sampling, feedback sessions, sourcing, lab testing, and more. Even if clients approach us with only an idea for a product without having a single ingredient, we can create it,” Maciej explains. “If a client wants to use specific ingredients in a certain way, like recreating an existing cold brew recipe, we can do that too.
“This saves them a lot of time and effort while ensuring the safety and quality of the final product.”
There are a multitude of factors to consider when deciding which products to develop, and finding a niche in the market often isn’t easy or obvious. To assist coffee businesses, Hardtank will host the Developing Customised RTD Beverages: Two Different Approaches webinar on 29 January at 12:00 CET.
Leveraging the insight of three market experts, the webinar will discuss how coffee brands can overcome the challenges of RTD coffee by partnering with trusted suppliers that guide roasters through each step of the process, including ways to improve efficiency and reduce costs.
“We worked with Hardtank not just to delegate production complexities but also because the company’s groundbreaking technology helps reduce the brew time from 24 hours to under two hours while enhancing the flavour profile of the cold brew,” Timur explains.
The future for RTD coffee is nothing short of promising. As more brands enter the market, the push for product innovation and diversification will continue, forcing roasters to look for new ways to stand out.
Infrastructure and distribution channels will always be prohibitive, which makes working with reliable partners and suppliers all the more important. This way, roasters are more likely to thrive in an increasingly competitive market segment.
Sign up to the Developing Customised RTD Beverages: Two Different Approaches webinar, taking place on 29 January, here.
Photo credits: Bukhash Brothers, Hardtank
Perfect Daily Grind
Please note: Hardtank is a sponsor of Perfect Daily Grind.
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