Ready-to-Drink (RTD) Coffee & Tea Market: Current Analysis and Forecast (2024-2032)

Ready-to-drink (RTD) coffee and tea are convenient and easy options for individuals who desire a beverage that contains caffeine, or other beverages that do not require preparation of any form. These are ready-to-consume in cold brew format, iced coffee, and flavored teas which are pre-brewed and can be in cans, bottles, or cartons, or packed in single-serve portions or multi-serve ones. RTD drinks have evolved from focusing on basic traditional tastes to varying types of enriched and functional products to meet the market demands related to health. The growing trend is that consumers buy more worked-off products, natural aromas, less sugar, and packaging designed with environmental responsibilities in mind.

The Ready-to-Drink (RTD) Coffee & Tea Market is expected to grow at a steady rate of around 7.1% driven by rising company mergers & acquisitions. For instance, in July 2023, the Board of Britvic plc acquired Jimmy's Iced Coffee to expand its product portfolio. The UK ready-to-drink iced coffee category is both large and fast-growing, with an annual increase of 15.3%. This sector contains products like cold brewed coffee, iced coffee, and flavored teas, they come in various packaging formats including cans, bottles, and cartons. The market is growing due to existing brands constantly introducing new varieties, healthier options, and functional benefits for health-conscious and time-starved consumers. Ongoing trends involve high consumption of low-sugar and organic products, and the use of sustainable packaging, which are just effects that have been a result of changes in consumer behaviors. Leading players of the industry are constantly varying the position of their products and services, which positively influences the constant high growth rate of this market.

Based on the product type, the market is bifurcated into coffee and tea. The coffee segment is expected to dominate in the forecast period driven by increased demand for quality coffee-based products that are easy to prepare, consume, and cost-effective. This segment has been growing particularly through the popularity of cold brew, iced coffee, and specialty coffee without needing brewed coffee. Factors like the emergence of new flavors including nitro and flavored cold brews and the entry of other functional related products, low sugar and plant-based milk products have also fueled the market growth. Moreover, the increasing consumption of ready-to-drink beverages due to busy schedules or increased interest in gourmet coffee is driving the high growth of the RT coffee business and making the segment very competitive in the beverage market.

Based on packaging type, the market is segmented into canned, glass bottle, PET bottle, and others. The PET bottle segment is anticipated to witness rapid growth in use during the forecast period as a result of key benefits like convenience, safety, and cost impact. PET bottles are lightweight and are particularly shatter-resistant and this can be attractive to customers who require bottles that are easy to carry and use. It is quite easier to shape them according to different sizes and this makes them suitable for serving different portions, right from the single-serve to the multi-serve serving sizes. Thus, the PET bottle segment is expected to grow significantly in the forecast period among the packaging type.

Based on the distribution channel, the market is bifurcated into online and offline. The online segment is expected to dominate in the upcoming years driven by the constantly growing trend of e-commerce and direct consumer sales. RTD beverages can be purchased easily on the internet which means that the consumers are offered a large choice of brands and flavors which can be sometimes lacking in local shops. The benefits of home delivery have been complemented by the choice of products, reading consumers' feedback, and offers of subscriptions. Moreover, the continuous advancement in digital media and segment-specific advertisement has improved customer outreach and increased brand recognition. With the increase in demand for online shopping, the RTD coffee and tea market is likely to experience further development in growth during this segment due to the trends that are being witnessed in the retail and consumption sector. Thus, the online segment is expected to hold a significant share in the forecast period among the distribution channels.

For a better understanding of the market adoption of ready-to-drink (RTD) coffee & teas, the market is analyzed based on its worldwide presence in countries such as North America (U.S., Canada, and the Rest of North America), Europe (Germany, U.K., France, Spain, Italy, Rest of Europe), Asia-Pacific (China, Japan, India, Rest of Asia-Pacific), Rest of World. The North American segment of the Ready-to-Drink (RTD) coffee and tea market has experienced robust growth, as consumers increasingly seek easy-to-consume food products and a rising coffee culture. Flavor, formulation, and packaging diversities have met consumer tastes, whereas the shift to a more portable and convenience-oriented society as well as e-commerce services have fueled the commercialization process. This growth is induced by the consumers' demands for convenience, variety, and quality which propels North America to become a predominant area in the RTD coffee and tea market. For instance, in February 2023, Danone North America, a subsidiary of French food and beverage giant Danone, announced to invest USD 65 million over the next two years to increase ready-to-drink (RTD) coffee and creamer and oat milk production in the US. The investment will cover several of Danone's coffee brands including coffee creamer International Delight, oat milk brand Silk, and cold brew range SToK. Thus, amongst areas, North America is expected to grow at a significant rate in the forecast period.

Some of the major players operating in the market include Danone S.A.; Harney & Sons Fine Teas; Nestle S.A.; Snapple Beverage Corp.; Starbucks Coffee Company; SUNTORY HOLDINGS LIMITED; Tata Consumer Products Limited; Coca-Cola HBC; Califia Farms, LLC; Unilever.