Bottled coffee drinks gaining popularity

WASHINGTON — Beverage companies are brewing up a hot business in cold coffee that is sold like soda.

Ready-to-drink coffees – concoctions with milk and sometimes chocolate – are popular items in supermarkets and convenience stores, industry experts say.

“Ready-to-drink has opened markets to people who don’t necessarily want coffee,” said Don Montuori, an editor at Packaged Facts, a market research firm in New York. “In some ways, it feels like you’re not having a cup of coffee.”

These drinks accounted for $326 million of the $19 billion coffee market in 2003, Packaged Facts said.

“Coffee drinks just exploded,” said Chris Testa, vice president of Yoo-hoo, in White Plains, N.Y. Watching other brands take off, Yoo-hoo took its traditional chocolate drink and added coffee, creating mocha – or, as Yoo-hoo calls it, Dyna-Mocha. It rolled out in February.

By 2008, the Packaged Facts report expected sales of ready-to-drink products to reach $590 million a year.

The growth in drinks with a coffeehouse ambiance and caffeine content like an ordinary cup of coffee came in large part from Starbucks.

In 1997, Starbucks teamed its product expertise and Pepsi’s nationwide distribution system. Their joint venture, North American Coffee Partnership, moved a bottled version of Starbucks’ milkshake-like Frappuccino coffee into food stores in 1997. An espresso-based companion, Starbucks DoubleShot, followed in 2002.

The two brands dominate the market. Leading competitors include Folgers’ Jakada and Yoo-hoo’s Dyna-Mocha. Canned versions of Miami-based Rowland Coffee Roasters’ Cafe Bustelo and Medaglia D’Oro were shown at the Food Marketing Institute’s trade show in Chicago in early May.

A big selling point, Montuori said, is the convenience of not having to stop by a coffeehouse or even brew a cup.

Chris Mitchell, 24, a paralegal, said he drinks two bottled Starbucks mocha-flavored Frappuccinos a day, which he buys from a hot dog stand on his way to work.

“I work long hours. I need the caffeine to keep me going,” he said.

Mitchell said he prefers it to drinking soda, but he does not believe the coffee drinks are healthier. “It can’t be much better,” he said. “Coke is fizzy, but this is still loaded with sugar.”

Todd Dahlquist, 29, a bartender waiting in line at a Starbucks in the capital, said he started drinking bottled Frappuccinos when he kicked his Diet Coke habit. He said flavor, not health or the need to stay awake, drove his decision. He prefers Mocha. “I’m a chocoholic,” he said. “I like chocolate and I like coffee.”

The ready-to-drink coffees are being marketed to people age 18 to the mid-40s. Industry executives say the sweet drinks also have fans among teenagers. The bottled Frappuccino’s market is more female than male, and includes soccer moms, said Jeff Dubiel, North American Coffee Partnership’s director of marketing.

Some bottled Frappuccino drinkers could be the moms’ teenage soccer-playing kids. Teenagers are “a part of our market” even though the company concentrates on adults, Dubiel said.

Yoo-hoo has a similar situation.

“We are trying to go after the teenage years and the college years,” said Greg Riley, Yoo-hoo’s brand manager.

Although teenagers are a fringe market, “We’ll take the fringe,” he said.