While the ready-to-drink or iced coffee market is relatively mature and showing only modest growth in much of Asia, levels of interest elsewhere in the world appear to be growing, according to Innova Market Insights, The Netherlands. This is not only in the relatively well-established U.S. market, which is the number two global market after Japan, but also in Europe, led by initiatives from multinational beverage and dairy companies.

The market remains relatively limited so far in terms of soft drinks as a whole, however, as does the level of new product activity. According to Innova Market Insights, iced coffee accounted for just 3.5% of total soft drinks launches recorded in the 12 months to the end of September 2011, although this was up from 2.7% five years previously. Activity also remained relatively low when compared with launch numbers of traditional hot coffee products and indeed iced tea launches, both of which saw twice the launch numbers over the same period.

As might be expected, Asia continues to dominate launch activity in iced coffee in line with its domination of the global market. The Asian region accounted for nearly three-quarters of total iced coffee launches recorded by Innova Market Insights over the year to the end of September, while Europe had a more modest 16% and the U.S. closer to 5%.

The U.S. market continues to be dominated by Starbucks’ Frappuccino, jointly developed by Starbuck’s and PepsiCo, ahead of another Starbuck’s brand Double Shot. Both of these are now being made available in a range of other countries, including parts of Europe. In the U.K., for example, Arla Foods teamed up with Starbucks to introduce the Frappuccino range to the retail grocery market in 2011, packaged in single-serve glass bottles and featuring fair-trade certification. Illy Caffe’s Issimo canned coffee drinks range, launched in the U.S. and Greece in 2009 and now available in 17 countries, was also introduced in the U.K. in 2011 in Caffe, Cappuccino and Latte Macchiato variants.

Germany probably has the largest iced coffee market in Europe overall, although it trails much smaller neighbor Austria in per capita terms. It has been seeing considerable new product activity in recent years, particularly with milk-based coffee drinks in lidded cups. There has been rising interest in the chilled market in recent years, changing the traditional focus on ambient lines. Swiss dairy company Emmi has been a leader in this area with its Caffe Latte range, with Germany one of its key markets, although the range is also available in other European markets and in the U.S. The range, sold in characteristic cardboard cups with snap-on-lids, now encompasses a range of flavor variants and has been extended further in 2011 with an Extra Shot extra-strong espresso-style variant sold in smaller 150ml cups.

A review of recent activity recorded on the Innova Database reveals that other interesting innovations in the sector in 2011 have included Café Pret a Boire from Lutin Malin in France, claimed to be the first RTD coffee that can be drank hot, cold or iced. Unilever’s Café Zero range in Spain is made up of a frozen blend of coffee and ice cream. Health is Wealth Nutriccino vitamin- and mineral-fortified bottled coffee drinks in the U.S. and Bauer’s Caffe Crema Freddo in Germany with fair-trade certification are other innovations.

According to Lu Ann Williams, Head of Research at Innova Market Insights, the demand for iced coffee drinks of all kinds now appears to be developing, not only geographically, but also beyond its original home in the foodservice sector of many countries, particularly the U.S. “With the growth of the market and the need to compete with alternative beverages, more traditional coffee variants in the RTD sector have been joined by a whole range of increasingly sophisticated flavor choices, as well as light options. At the same time, further value has been added with the use of organic and/or Fair-Trade coffees, as well as coffees of specified type and origin, and the introduction of more user-friendly and convenient packaging formats, including cartons, bottles and lidded cups,” she noted.