Ready to Drink Coffee

Trends & Dairy

RTD Coffee Shows Opportunity for Growth in

the U.S.

2Source: Euromonitor 2017

24%

18%

8%

4%

22%

16%

7%

2%

Bottled Water Juice

Energy Drinks Sports Drinks

Non-Cola Carbonates Cola Carbonates

RTD Tea RTD Coffee

U.S. Soft Drink Share of Dollar Sales

in 2017

41%

4%12%

5%

18%

0%13%

7%

Bottled Water Juice

Energy Drinks Sports Drinks

Non-Cola Carbonates Cola Carbonates

RTD Tea RTD Coffee

U.S. Soft Drink Share of Dollar Sales

in 2017-2022

RTD Coffee RTD Coffee

From 2013 to 2017, R.-T.-D. coffee sales grew

about 10% annually in the United States

3Source: Mintel 2017; Food Business News

Much of the growth came from some type of cold brew, with cold-brew retail sales

reaching an estimated $38 million in 2017, representing a single-year growth of 137%.

Chilled / Iced Coffee is Taking a Leading Place

in the Strategy of More Companies,

Particularly RTD Coffees

4

La Colombe RTD coffees

are made with lactose-free

milk and cold-pressed

espresso. It’s now a $30

million brand in the U.S.

Bigger players like Nestle

are also investing in the

format.

Source: New Nutrition Business 2018, 10 Key Trends for 2019

The Trend is Likely to Continue; Young

Consumers Are Leading the Shift from Hot

to Chilled RTD Coffee

5

68%Of U.S. 18-34-year-olds

currently consume single-serve

RTD coffee (in bottles or cans).

Source: New Nutrition Business 2018, 10 Key Trends for 2019

43%Of total U.S. adults currently

consume single-serve RTD

coffee (in bottles or cans).

Compared to

Around 90% of the RTD Coffee Space is Made up of

RTD Coffee with Dairy Milk

6

Top Ingredients: Purified water,

organic Colombian coffee, organic

maple syrup, Sunnova super

creamer (milk protein isolate,

purified coconut oil (mct)

Top Ingredients: Organic

coffee concentrate (water,

coffee), butter, whey protein

concentrate

Top Ingredients: Starbucks

coffee (water, coffee),

reduced fat milk, skimmed

milk, sugar

Source: Innova Database; January 2013 – December 2017; Global market; Iced

Coffee; Specialty Coffee flavor list; contains milk

RTD Coffee with Milk is also the Most Common

Choice for Consumers – Based on Sales

7 Source: IRI ILD POS data ending 2/25/18 MULO+C IRI Consulting Analysis

U.S. Adults are Drinking More Specialty Coffee

8Source: National Coffee Association; 2017 U.S. Specialty Coffee Consumption Trends

0%

10%

20%

30%

40%

50%

60%

70%

80%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Percentage of Adults in the U.S. Drinking Specialty Coffee (2008-2017)

67%

53%

41%

18%

31%

60% OCCASSIONALY

WEEKLY

DAILY

Within the 69% of RTD Coffee NPL’s that are Specialty Coffees,

Lattes are the Most Common Specialty Coffee Type

9Source: Innova Database; January 2014 – December 2018; global market; iced

coffee; RTD packaging; specialty coffee flavor list; contains milk

2014 - 2018 Specialty Coffee Types

Mocha Latte1%

Latte32%

"Frappuccino"7%

Cappuccino17%

Mocha 15%

Espresso14%

Macchiato17%

Join in on the Better-For-You Health Trend

Strategies to Handle the Demonization of Sugar

10

• Explore different ways to reduce sugar.

• Consumer acceptability varies according to target market and consumer group.

Source: New Nutrition Business 2018; 10 Key Trends in 2019

Reduce

the Sugar

Make it

Natural

Pure

IndulgenceSugar for

Energy

• Many consumers believe that if something is natural, it is healthier.

• Honey, agave and stevia are popular “white sugar replacements” on social media.

• If you market something as an honest, permissible indulgence, consumers will be more forgiving about the sugar content.

• Consumers

looking for

“natural energy”

are forgiving

about the sugar

content.

Better-For-You Health Trend: Reduce the Sugar

11 Source: GlobalData Q4 2016 Global Consumer Survey; Innova NPD Nov. 2017

U.S.; New Nutrition Business 2018 10 Key Trends for 2019

Global: consumers who find the following food and

drink product claims appealing or very appealing, 2016

71% 71%

Low sugar No Added Sugar“I pay attention to how much

sugar I consume for a

variety of reasons. It’s bad

for my teeth and for my

waistline. But also because

it’s always going around

how addicted we all are to it

apparently.”

American, curator, 28

(female)

Coffee Formulations are Moving Towards Low-Sugar

or Sugar-Free Options

12Source: GlobalData Q4 2016 Global Consumer Survey; Innova NPD Nov. 2017 U.S.

Global: “I somewhat agree/ agree with this statement”, 2016

Sugar has a negative impact

on my health.

I perceive hot drinks as having

high/medium sugar content.

I am actively trying to reduce

my consumption of sugar.

Unsweetened products taste

better than sweetened version.

63%

81%

87%

33%

Dairy Super Consumers Present

Opportunity to Increase Retail SalesStage 1 of IDDBA’s Super consumer research (2017) results indicate

that 20% of households are potential Super Consumers.

13

• Spend 2.2 more ($634/year)

• Purchase 7 subcategories

• Shop at 5 different stores.

Source: IDDBA 2019 What’s in Store

10% 22%

DAIRY SUPER CONSUMERS

Appeal to Shoppers Already in Your

Store – up to $2.4-$3B Opportunity.

14

Source: IDDBA 2019 What’s in Store

Create a coffee creamer bar in your store so customers can sip

and shop. Refine creamer bar options to make experimenting with

new flavors fun and easy.