From Cafés to Cans: The European Revolution in Ready-to-Drink Coffee

Europe, a continent renowned for its deep-rooted coffee culture, is seeing a dynamic change in consumption patterns as ready-to-drink (RTD) coffee gains unprecedented popularity. In 2023, Europe's coffee consumption reached a staggering 55 million 60-kilogram bags, with countries like Italy, France, Germany, and the United Kingdom leading the charge.

Germany tops the list in the ready to drink (RTD) coffee market, consuming more than 9 million bags annually, reflecting its long-standing tradition of coffee appreciation. The growth in coffee consumption is driven by the millennial and Gen Z demographics, who are seeking convenience and novel coffee experiences. Urbanization and busy lifestyles have boosted the demand for on-the-go caffeine fixes, steering consumers toward RTD coffee alternatives that deliver both quality and accessibility.

The economic structure of the Europe ready to drink coffee ecosystem is still evolving, and a report by Astute Analytica projects that the?Europe ready to drink coffee market is anticipated to reach a market size of US$ 4.53 billion by 2032, with a compound annual growth rate (CAGR) of nearly 7.41% during the forecast period from 2024 to 2032.

A brief about the market: -

The potential of the ready to drink (RTD) coffee market in Europe is soaring, boosted by a confluence of factors such as health-conscious formulations, innovation in flavors, and sustainable packaging. In 2023, the European RTD coffee market was valued at about US$ 2.38 billion, marking a substantial surge in consumer interest. The United Kingdom has appeared as a key player, with RTD coffee sales surpassing 300 million units this year, underscoring a change from conventional hot brews to chilled, convenient options. Germany follows closely, with consumers buying more than 250 million liters of RTD coffee, a testament to the market's strong growth.

Brands making substantial waves include Nestlé's Nescafé, which sold more than 500 million RTD coffee units across Europe, and Starbucks, whose RTD products caused revenues to surpass US$ 1 billion in the European market alone. Local brands like Illycaffè from Italy have also capitalized on this trend, selling more than 50 million cans of RTD espresso and cold brew varieties. Looking forward, the growth potential of the ready to drink (RTD) coffee market in Europe is both strong and exhilarating. Projections estimate the market will ascend to US$ 9 billion by 2025. The surge is propelled by innovations such as plant-based RTD coffees, which added an impressive US$ 400 million in revenue this year, catering to the rising vegan and lactose-intolerant consumer base.

E-commerce platforms are significantly boosting sales, with online RTD coffee transactions surpassing US$ 1.2 billion in 2023. Sustainable and recyclable packaging solutions have echoed with environmentally conscious consumers, leading to an uptick of 150 million units sold in eco-friendly formats. This dynamic market is attracting considerable investments, with more than US$ 800 million channeled into RTD coffee startups and developments in the region during 2023. Europe's RTD coffee landscape is rapidly growing, heralding compelling opportunities for brands and delivering consumers with an expanding array of choices to fuel their lifestyles with convenient and innovative coffee delights.

Convenience Revolution: The Rising Demand for Ready-to-Drink Coffee in Europe

The demand for ready to drink (RTD) coffee market in Europe has been significantly compelled by the growing consumer preference for convenient and on-the-go beverage choices. In Europe, the RTD coffee market noticed sales worth more than 2 billion euros in 2023. This trend is largely driven by the fast-paced lifestyle of urban dwellers, where more than 70 million people are living in major European cities. With a reported 9 out of 10 Europeans consuming coffee daily, the change towards grab-and-go alternatives is notable. In 2022, 50 million RTD coffee units were sold in Germany alone, reflecting the increasing consumer inclination towards these beverages. Also, the working population, which consists of 200 million people across Europe, demands convenient opportunities to fit their hectic schedules, which contributes to the growth in RTD coffee consumption.

Furthermore, the increasing presence of retail outlets in the regional ready to drink (RTD) coffee market is maintaining the accessibility of RTD coffee. In 2023, there were more than 300,000 convenience stores across Europe stocking RTD coffee products. Supermarkets recorded the highest sales, with 120 million RTD coffee units sold in just one year. Online platforms have also played a pivotal role, with e-commerce channels noticing a 30% growth in RTD coffee orders in 2023, equating to 15 million units sold online. The market is further propelled by the millennial and Gen Z population, accounting for 150 million potential consumers who prioritize comfort. As a result, the RTD coffee market in Europe is anticipated to continue its upward trajectory, with experts predicting sales to reach 3 billion euros by 2025.

Collaborative Ventures: Coffee Brands and Health-Focused Food Companies Unite

The trend of expanded collaboration between coffee brands and health-oriented food companies is shaping the ready to drink (RTD) coffee market in Europe. In 2023, more than 100 collaborations were formed between leading coffee brands and health-focused food companies. These collaborations are primarily concentrated on developing innovative products that cater to the rising demand for health-conscious beverages. For instance, a significant collaboration between a top coffee brand and a well-known health food company resulted in the launch of 10 new RTD coffee variants infused with superfoods. Moreover, the European RTD coffee market witnessed the introduction of 50 new product lines in 2022, highlighting health benefits like added vitamins and antioxidants.

These collaborations in the ready to drink (RTD) coffee market are also desired at tapping into the 300 million strong health-conscious consumer base in Europe. The partnership trend is further supported by the growth of functional beverages, with the European market for functional foods and beverages valued at 50 billion euros in 2023. As these associations continue to thrive, they are anticipated to contribute significantly to the growth of the RTD coffee market by introducing products that align with growing consumer preferences.

Recent Launches: -

In 2023, Nestlé, the world’s largest food and beverage company, launched in Romania the first pan-European Ready to Drink coffee line, the NESCAFé Barista Style coverage. Nestlé presents its consumers, in addition to the classic recipes, new variants in the NESCAFé Barista Style Ready to Drink range: Cappuccino, Latte Caramel, Latte, and Americano. “NESCAFé Barista Style presents the NESCAFé brand’s new creative and strategic platform, “Make your world”, which allows coffee lovers around the world to find the inspiration and energy to become the change they want in the world. Ready to Drink NESCAFé products come with a new visual originality, a new packaging with a modern and attractive design that invites people to discover and try different tastes and aromas of the new range of coffees”, says Ramona H?r?t?u, Group Brand Manager Mixes South Eastern Europe, Nestlé.

The ready to drink segment is encountering the fastest growth in the entire coffee category, with an annual growth rate of more than 25 percent over last year (October 2021-September 2022). Moreover, in Romania, this segment is at the same level as that of coffee beans, further demonstrating the strong development potential of this category. The most significant sales channel for this category is modern trade (volume share of 62 percent), while petrol stations have a volume share of around 14 percent.

In 2019, Lavazza launched its first premium ready-to-drink iced coffee product in the UK market. Called Lavazzo Iced Cappuccino, the product has been launched by the brand under a new collaboration with PepsiCo. The beverage will be jointly marketed, sold, and distributed by the partners. Lavazza Iced Cappuccino has been available nationwide in the UK since the summer of 2019. It desires to leverage Lavazza’s reputation as a coffee specialist to capitalize on the increasing demand for premium iced coffee alternatives. Available in a 100% recyclable and premium can, the drink features a blend of Lavazza milk and coffee. The UK launch is only the first step of a collaboration between Lavazza and PepsiCo in Europe, targeted at accelerating invention in this rapidly rising segment.

Closing Note: -

As Europe adopts the convenience of ready-to-drink (RTD) coffee, consumption has soared, with 2023 seeing a substantial valuation of about US$ 2.38 billion. Propelled by the dynamic preferences of millennials and Gen Z, this change reflects a broader trend toward quick, quality caffeine solutions that fit seamlessly into busy urban lives.

Countries like Germany and the UK are showing this caffeinated charge, with innovations in flavors and health-conscious formulations captivating consumers. The rapid growth of e-commerce and retail accessibility has made RTD coffee an everyday staple, appealing to a rising base of health-focused drinkers. Moreover, the premiumization trend, prominent in new product launches and cooperations with health-oriented brands, is reshaping consumer expectations and growing market opportunities.

As the European RTD coffee market is expected to reach US$ 4.53 billion by 2032, it stands as a testament to the region’s adaptability and creative spirit. This journey from conventional cafés to convenient cans is not just about coffee—it is about a lifestyle that prioritizes quality, sustainability, and on-the-go convenience, setting the stage for a vibrant future.