Nestlé is venturing into the fast-growing iced coffee segment, leveraging its popular Coffee mate creamer brand. The new product, aptly named “Coffee mate Iced Coffee,” comes in two delectable flavors: French vanilla and caramel. This marks a groundbreaking innovation for Coffee mate, a brand cherished by consumers for over six decades.
Nestlé’s decision to enter the iced coffee market underscores a trend in the consumer packaged goods (CPG) industry. Companies are increasingly leveraging the equity of existing brands to explore adjacent categories, driving sales and enhancing consumer recognition.
The Switzerland-based company boasts Coffee mate as the leading “coffee enhancer” within the $6.4 billion whitener/creamer category. Approximately one-third of coffee drinkers who enjoy “whitened” coffee turn to Coffee mate.
Nestlé is no newcomer to the world of coffee, with a portfolio featuring well-known brands like Nescafé, Blue Bottle, Taster’s Choice, and Nespresso. Rather than ceding market share to competitors, Nestlé’s strategic move to combine its strong presence in two coffee-related categories positions it favorably in the burgeoning and trendy iced coffee market.
As millennials and Generation Z consumers exhibit a penchant for diverse coffee experiences and flavors, iced coffee has emerged as a significant beneficiary. Data from Skyquest indicates that the cold brew coffee segment is projected to grow from just under $500 million last year to an impressive $3.11 billion by 2030.
Findings from other coffee companies align with this trend. Keurig Dr Pepper reports that 73% of Gen Z consumers aged 18 to 24 indulge in iced coffee weekly. Starbucks, on the other hand, sees cold coffee accounting for 75% of its sales in warmer months and 60% during the winter.
Leonardo Aizpuru, Nestlé’s Vice President of Brand Marketing for its Beverage Division and Business Unit, noted, “Enjoying cold coffee year-round has become a ‘personality trait’ for many coffee enthusiasts who now prefer iced coffee over other options. This burgeoning love for iced coffee, particularly among Generation Z, presented an ideal opportunity for Coffee mate to venture beyond creamers for the first time in its more than 60 years since inception.”
Introducing Coffee mate Iced Coffee also extends the retail presence of the brand while creating new occasions for consumers, particularly among younger demographics. A consumer could now enhance their morning brew with Coffee mate at home and later savor the new Coffee mate Iced Coffee on the go or at the office. By embracing the iced coffee segment, Nestlé can potentially attract Generation Z and other young consumers who may remain loyal to Coffee mate and the company’s coffee brands as they age, due to their familiarity with them.
Each bottle of Coffee mate Iced Coffee is designed to serve about five cups of whitened coffee and contains 25% less sugar than the leading dairy-based competitor, making it an appealing choice for health-conscious consumers. Nestlé’s foray into iced coffee with Coffee mate marks a milestone in the evolution of a beloved brand, demonstrating the company’s commitment to adapting to changing consumer preferences and staying at the forefront of the industry.