Starbucks announced in May the introduction of nitrogenated draft cold-brew coffee. Rolled out in a few cities, the drink entered a market already showing signs that the relatively new service trend was an idea whose time had come.
A few years ago, such a move might have seemed too bold. But in coffee and tea shops around the country, coffee and tea made and served in novel fashion—like nitro, which sees coffee infused with nitrogen—has become less exotic. Thanks to younger consumers—raised with single-varietal coffees, a rainbow of black, green, white and red tea shades, and curious about anything that smacks of the new—innovative methods, like cold-brew (coffee that’s brewed cold and never heated) have found little customer resistance.
In a survey of away-from-home coffee drinkers commissioned by S&D Coffee & Tea, a North Carolina-based coffee roaster and tea blender, Millennials emerge as particular and conscientious coffee consumers who make emotional connections to their beverage experiences.
The report indicates something we have come to understand about Millennials—they look for deep connections to their food and drink experiences. Specifically, coffee isn’t just a beverage, it’s an experience. The report suggests that descriptors need to reflect that emotional tie, going beyond words like “bold” or “Arabica.” For example, more than 40 percent had tried cold-brew coffee and another 40 percent had heard of it—higher percentages than French press or pour-over brewing.
Their interest in cold-brew coffee shows. Data from research firms NPD Group and Mintel says sales of cold brew grew nearly 340 percent since 2010. After Starbucks introduced cold brew last year, their sales of cold coffee grew 20 percent, and the chain expects that to double in the next three years.
The cold-brew phenomenon not only has generated multiple service trends—immersion, pour-over, standard draft, nitrogen draft—but also serves as a base for more complex concoctions. La Colombe, an 18-café, Philadelphia-based chain, found that its textured milk and coffee draft latte, introduced about a year ago, accounts for 26 percent of the company’s $50 million annual sales, with another 25 percent coming from cold-pressed coffee served with milk. “I wanted to change the way Americans interacted with their coffee, and this is all about texture,” says Todd Carmichael, La Colombe’s CEO and co-founder, describing the draft latte, now also sold canned.
Change is certainly happening. In the coffee category during a week in late June, 68 percent of all beverages served at La Colombe were cold. Carmichael says it’s not only about product innovation, but about brand messaging, too—sustainability, authenticity and mobility are key to understanding new customers who look for a way to connect with a business. For example, about 45 percent of respondents said they would think more positively of a place that offers coffee that is “sustainably sourced.”
Cold coffee sales doubled for the 240-plus unit Berkeley, Calif.-based Peet’s Coffee & Tea when it moved from hot to cold brewing. “And it seems that cold-brew sales are sustained through all seasons,” says Patrick Main, senior R&D manager. “We used to sell a fair amount of iced coffee during the hottest months but very little in cold weather; however, cold brew sells well no matter the season.” That defiance of seasonal cues seems to stem from a consumer reaction to next-level coffee experiences—they’re so taken with the cold-brew culture that they see past its frosty countenance.
DIFFERENT IS GOOD
Along with straight cold brew, Peet’s also offers a layered beverage, the Black Tie (sweetened condensed milk, cold-brew coffee, housemade chicory syrup and half and half). Originally a limited-time offering, customer response pushed it onto the regular menu. This past summer, Peet’s expanded the category with Coconut Black Tie, with coconut-infused simple syrup replacing the chicory. The concept is also testing nitro cold brew.
In terms of flavors, coconut has had surprising staying power as a summer seasonal flavor, Main says. Of course, pumpkin has become a staple in the fall and holiday season in a variety of drinks: Pumpkin Latte, Pumpkin Javiva, Pumpkin Chai and, this year, Dark Chocolate Pumpkin Mocha with unsweetened Dutch cocoa powder steamed into the milk, combined with espresso and pumpkin syrup, then topped with whipped cream and baking spices.
He says younger consumers tend to be surprisingly sophisticated about coffee, and are driving innovation in the overall category. “It wasn’t until the ’90s that specialty coffee really began to come into the mainstream consciousness across the country. Consumers who are now in their 20s and 30s grew up with specialty coffee in a way that most of their parents did not.”
Main says Peet’s Millennial customers care about the craft of preparation. “They value quality over quantity and appreciate an expertly prepared traditional cappuccino, with perfect microfoam and beautiful latte art, rather than an overly sugared, overly flavored, extra-large beverage with the coffee flavor buried under other ingredients. Not that other flavor ingredients are bad, but they need to be authentic and they need to complement, not cover, the coffee,” he says. He finds more openness to nontraditional flavors, especially in cold coffee: citrus, berries, bitters, florals, even savory herbs. “Cold-brew coffee is particularly flexible because of its sweet, smooth nature.”
And then there’s the uber-geek, slow-drip Kyoto style, custom-made for gear-head coffee consumers. At Demitasse Roastery & Kitchen in Hollywood, Calif., the first food-serving location of a four-unit coffee company, Beverage Director James Murphee offers many service styles, including Kyoto, in which one drop of water enters the coffee receptacle every 1.5 seconds, for a 15-hour brew time. “As it slowly drips and saturates the coffee, the first drip will be very different from the last—it’s very complex,” he says. For Kyoto-style, Demitasse uses only single-varietal beans, while full immersion cold brew uses a blend, soaked for about 15 hours and then served from a nitrogenated keg. “Nitrogen changes it some, makes it a little bit brighter, gives it a gentler feel,” he says. “In the coffee industry, we don’t like to say ‘sour,’ but it tastes slightly like under-ripe raspberries and more acidic from the nitrogen, with a much more welcoming mouthfeel.”
TIME FOR TEA
For many years, sun tea or other cold-brew tea styles have become common at home, but now tea shops have entered the crowded cold-brew market. Argo Tea, with more than 40 units internationally, this year launched cold-brew coffee and two flavors of cold-brew teas. “Cold-brew tea is a different chemical process of extraction with a different flavor profile,” says Argo’s Marketing Manager Mika Ishida. “Cold allows a slower rate of extraction of tannin and caffeine, a smoother flavor and more natural sweetness.” In addition, she says the demand for healthy choices, whether lower-calorie options or “functional” ingredients like ginger and probiotics, are big with all age groups.
Millennials, having grown up around tea, are now looking for different types of flavor experiences, says Cynthia Fazekas, wholesale sales manager and tea taster at Adagio Teas, a primarily wholesale company with three shops in the Chicago area. “They’ve had more access than previous generations, so they have higher expectations of quality. They are culturally open and willing to embrace these things that previous generations might not have been. For example, they have had exposure to white and green teas from youth, so blended versions, like white strawberry, play right into their wheelhouse.”
Fruity and nutty flavors with tea and chai blends work well. Chai, in fact, has come to mean tea blended with virtually anything. Argo’s Thai Chai merges Indian-spiced tea with coconut and lemongrass. Tropical flavors, like coconut, mango, guava and passionfruit, are especially big.
Fazekas credits Teavana for opening the doors for tea. “The specialty tea industry got a big push—Starbucks and even Dunkin’ Donuts are promoting iced tea as a beverage. It’s helped to get people thinking about tea.”
Starbucks stores currently offer 27 different Teavana beverages, from tea lattes to shaken iced teas and brewed teas. Last year, iced tea had its best summer to date at Starbucks, with the bestseller Teavana Mango Black Tea Lemonade (black tea, mango and passionfruit, shaken, with lemonade).
Argo stores have long offered draft teas, as many as 10 at a time, and this year introduced a line of draft kombucha, a fermented black or green tea. They’ve found that tea concoctions—served with milk, sparkling water, orange juice, puréed ginger and other ingredients—work. “Everybody who has tried them loves tea cocktails, but how can we bring them to the masses?” asks Argo’s Ishida. This past summer they offered, for a limited time, the Jasmine Teamosa, with green tea, white jasmine and sparkling orange juice. Ishida says flavors that double as functional ingredients, like ginger and hibiscus, are gaining.
And then there’s matcha. “Matcha is on fire,” says Fazekas. “We are seeing wholesale orders from more and more foodservice and wholesale customers, especially pastry and drink people.” Adagio is selling a line of flavored matchas as well, and while the traditional production method involves a whisk and bowl, the Japanese green tea powder is also easy to make in a shaken drink, she says.
Ishida says Argo’s matcha version with steamed milk and vanilla has always done well, but lately there’s more demand for straight matcha. “We responded by launching matcha shots: powdered green matcha frothed to mimic the traditional whisking in the tea ceremony.”
While Millennial consumers deserve much of the credit for driving these coffee and tea trends, there’s something else that’s occurred, according to La Colombe’s Carmichael. To him, it’s no longer simply a demographic based on age.
“New American is the correct term—the Millennials were just the beginning. It’s the America of the new, a way of thinking that includes younger and older people, more of a psychographic than a demographic. It’s the way we are now, and not just a blip on the screen.” When considering innovation in the coffee and tea category, that’s an important takeaway.
COCKTAILS ON CAFFIENE
The boom in styles and types of coffee and tea has spawned a new interest in cocktails based on them. At Demitasse Roastery & Kitchen in Hollywood, Calif., Beverage Director James Murphee puts slow-drip Kyoto coffee to use in the Green Arrow, adding Dolin blanc vermouth and honey-flavored whipped cream. Purveyors are getting into it as well. At the annual Lavazza World’s 50 Best Restaurants awards ceremony this spring, the company served the Coffeetail 51: cold-brew coffee, vodka and ginger ale.
Tea purveyors are also promoting the concept. Numi Organic Tea teamed with Square One Organic Vodka to create several “Marteanis.” Square One founder Allison Evanow steeps various tea bags into vodka to create new flavors, as well as a cocktail base. Numi also promotes drinks like the Desert Lime Rickey (lime and ginger lemon teas, pisco acholado, club soda, lime and bitters) and the Moroccan Mint Daisy (Moroccan mint tea, pisco torontel, lemon juice, cherry liqueur, honey and Creole bitters).
Cold-brew coffee has especially caught bartenders’ attention, with its lower acidity and brighter flavors making it far more mixable. While Love & Salt in Manhattan Beach, Calif., currently serves a hot coffee called Does Mama Know? (bourbon, Averna, dark chocolate liqueur, hot coffee, whipped cream), in the past it has menued #INeedCoffee with bourbon, Amaro Nonino, cold-brew coffee and cream.
The Dawson in Chicago has served Marooned on Coffee Island (two rums, cold-brew coffee, salt-roasted plantain, sherry, bitters, cinnamon and whipped cream) and also uses chai, currently serving the Doublemint Twins (two types of Banks 5 Island Rum, amontillado sherry, falernum, lemon, chai, mint and bitters).
Even matcha teas have attracted bartenders. In New York’s The Garret bar, the current menu includes the First Lady, with gin, orange liqueur, matcha, lemon, egg white and fresh basil.