Consumers want RTD coffee with functional benefits and non-dairy milk, says Mintel

Oct 4, 2018

Mintel released a report on the top trends in the ready-to-drink (RTD) coffee segment. Among the top trends are the use of non-dairy milk and functional benefits, aligning with consumers’ overall desire for better-for-you foods and beverages. These are ongoing trends that appear to be gaining strength in the coffee market since Nutritional Outlook reported on them last year.

According to Mintel, just as many consumers who add dairy to their coffee add non-dairy alternatives (32%, respectively), and 36% say their ideal RTD coffee would contain non-dairy milk. Non-dairy milk on its own is a fast-growing segment in the non-alcoholic beverage market as more options hit the market, allowing consumers to explore their preferences. For example, while soy is the most common non-dairy milk, it’s now challenged as more consumers opt for almond milk and more recently oat milk, says Mintel.

Besides avoiding dairy, consumers also want to get added health benefits out of their RTD coffee. Mintel research reveals that consumers want their RTD beverages to provide antioxidants (47%), brain health benefits (40%), probiotics (30%), and anti-inflammatory support (35%). The fastest growing segment in the coffee category, with 31% growth in the last two years, is the RTD coffee segment—a market driven by innovation.

“Innovation is vibrant and diverse in the RTD coffee segment and includes new products that are carving out sometimes surprising territory and often taking inspiration from unconventional beverage categories…Consumer interest in better-for-you beverages is also shaping the market as demand for organic and non-GMO coffee or functional formulations enhanced with all-natural flavors, protein, and vitamins grows. The broader trend of beverage blurring is also opening up opportunity for innovation and brand extension, especially in the RTD segment,” said Caleb Bryant, senior beverage analyst at Mintel, in a press release.

Overall, total retail coffee sales in the United States are estimated to reach $14.4 billion in 2018, a 4% increase over last year, with steady growth expected to continue through 2023, Mintel says.