Nestle and Keurig want you to make iced coffee at home instead of paying a barista. That’s harder than it looks
New York
CNN
—
Iced coffee just isn't the same when you make it at home. It quickly waters down, tastes bitter and simply doesn't emulate what you pay a barista upwards of $8 for.
But brands like Nestlé and Keurig, who make single-serve espresso machines ubiquitous in many households, are going all in on iced coffees, attempting to draw customers from trendy coffee shops back to their kitchens.
This year, Keurig Dr Pepper launched a machine that is dedicated to iced coffee, advertising a drink "as cold as the coffee shops" in three minutes or less for $199. The company flashed new technology, promising flavorful cups that wouldn't be watered down by melted ice by quick chilling the brewed coffee.
Nestle, which owns Nespresso and Nescafé, said it's developing "complete solutions" for customers that want to make cold coffees in their homes. In May, Nescafé launched in Australia and China an espresso concentrate, which is designed to pour over ice to make a latte or Americano. No "barista skills needed," it advertised. Also this year, the caffeine conglomerate developed its first Starbucks blend dedicated to ice coffee, new creation modes on some Nespresso machines for iced drinks, a canned cold coffee and a Coffee mate cold foam.
But there's science behind why iced coffee is so much better at coffee shops, and current single-serve espresso machine innovations don't meet that quality despite their marketing.
"The fundamental problem with how these capsule machines brew coffee is that there's actually less coffee in those pods than are used to brew cold brew and other drinks in cafes," Christopher Hendon, associate professor of chemistry at the University of Oregon, said to CNN, adding that at-home iced coffees are roughly half the strength of what cafes produce.
Trying to extract more coffee out of the pods leaves the drink with a bitter taste, he said. Unlike cold brews that are made overnight, the brew times on single-pod machines are much shorter.
And iced coffee mania comes at a time when coffee production is at risk of surging prices as factors like climate change could slash the global supply. The International Coffee Organization (ICO), an intergovernmental organization established in 1963 with the support of the United Nations, reported over the summer that the ICO Composite Indicator Price, a key reference price for the global coffee industry, hit a 13-year high, averaging 226.83 cents, or around $2.27 per pound.
"We are not immune to the price of coffee, far from it," David Rennie, head of Nestlé Coffee Brands, said during the company's Capital Markets Day in November.
But still, investing in iced coffee could be worthwhile for companies. With American consumers still feeling the pinch in their wallets, more and more are choosing to recreate fancy iced concoctions at home.
Coffee was the largest contributor to Nestlé's growth in the first nine months of this year, the company said.
Jennifer Creevy, director at WGSN Food & Drink, said café-at-home culture is particularly taking off with younger consumers.
"Partly this is due to financial pressures with many consumers choosing to spend more on premium items for their home than buying out of home drinks but it also speaks to the experimental and individual nature of the younger generations," Creevy said. "These consumers choose food and drink to showcase their personalities, to try new things, and to show friends their skills."
Nestlé, which also makes Nescafé's instant coffee, the Nescafé Dolce Gusto machine and concentrates, noted that indulgence took over stimulation for the first time as the number one reason people drank coffee in 2023. Cold coffee, especially as afternoon pick-me-ups, is going to fuel that growth, the company said.
"Coffee is no longer just hot, drunk in the morning. It's now an all-day round, versatile beverage, drunk, hot, cold and flavor that gives us huge opportunity to meet these new consumer needs," Rennie said.
Nestlé said that one out of every three coffee cups consumed globally is going to be cold. And many of those drinkers are Gen Z, a gold mine for marketers.
"It's going to be key to recruiting young consumers who are disproportionately drinking cold coffee as their first coffee cup," Rennie said.
But these machines still have a long way to go before fully converting coffee shops fans. The Keurig K-Brew+Chill came out this fall to mixed reviews, with many customers on social media complaining the machine only brews hot coffee. Keurig Dr Pepper did not disclose sales details.
Almost a quarter of Americans enjoy their coffee cold, according to this fall's National Coffee Data Trends report. And despite higher prices, they're still willing to spend for a good latte, the National Coffee Association told CNN that US consumers spend $32.9 billion a year at coffee shops.
