• by Karlene Lukovitz  @KLmarketdaily, March 13, 2015

With consumers clamoring for protein in virtually every food and beverage category, ready-to-drink (RTD) iced coffees continuing to heat up, and younger consumers showing a particular penchant for flavored iced coffees, there's little mystery behind Kraft Foods' latest beverage launch: Gevalia Iced Coffee with Almond Milk.

The just-announced launch — the brand's first RTD offering — not only manages to combine all of those attributes; it's also looking to leverage another factor: Gevalia, which saw U.S. sales rise 27% in 2013, is already particularly popular among young consumers, according to Packaged Facts. 

Overall, Kraft's aggressive marketing behind Gevalia since it rolled it out in packages and K-Cups in U.S. retailers starting in 2012 — as its competitive premium coffee entry, following its contentious split with Starbucks — appears to be paying off. Gevalia was the fastest-growing premium coffee brand in the U.S. in 2014, according to Kraft.

The new iced coffee/almond milk product, which starts hitting grocery and mass merchandiser retail shelves this week, has six grams of protein per 8-ounce serving, and comes in mocha, vanilla and caramel flavors.

"Coffee lovers have always been able to count on Gevalia for a rich, never-bitter cup of hot coffee, but we know they’re now searching for iced coffee options in the premium space as well,” says Tracy Sinclair, director, Gevalia. The new product's protein content, combined with a "touch of sweetness," makes it a "treat that on-the-go coffee drinkers can feel good about," she says. 

The brand is also able to incorporate a sustainability angle: The launch announcement notes that the new Gevalia line comes in "recyclable Tetra-Pak packaging" (11.1-ounce single serve and 33.8-ounce packages, with suggested retail prices of $2.19 and $4.99, respectively). Most RTD iced coffees are bottled.

Gevalia is kicking off the launch with samples offered at "interactive ice bars" it's sponsoring at the Fast Company Grill and Rachael Ray's Feedback party during the SXSW festival, which starts today in Austin, Texas.

The new line will have extensive, integrated support, starting now with sampling programs, social media marketing and public relations, with in-store promotions and print and digital advertising launching in early May, Sinclair tells Marketing Daily.

WPP Group's Taxi is the lead creative agency, with the EVB agency handling digital, Starcom handling media planning/buying, Shopper Arts Network/SAN overseeing the shopper marketing/in-store programs, and Henson Consulting on PR.

RTD Iced Coffees Hitting Sweet Spot With the Young

The new RTD iced coffee/almond milk product expands Gevalia into the fast-growing arena of convenient, flavored cold beverages with "value-added" elements.

This is a literal sweet spot when it comes to wooing Millennials and younger consumers — who are actually not all that big on hot coffee, but have taken big-time to cold coffee brews, which tend to deliver a less acidic, smoother taste than hot varieties, particularly when combined with dairy beverages. These more "drinkable" products are expanding the traditional consumer base for coffee, as experts noted to Beverage Industry.  

About 83% of Americans say they drink any kind of coffee, and fully 20% now report drinking iced coffee, according to the National Coffee Association and Mintel. Moreover, Euromonitor International reported that sales of bottled coffee in grocery and convenience stores increased by 69% over five years, to reach $1.8 billion in 2013, reported FT.com. 

Common misperceptions aside, among demographic segments, 18-to-24-year olds are the least frequent hot coffee drinkers. But they're also the biggest consumers of iced coffee (38% report consuming iced varieties), per Mintel. 

"This new cohort craves indulgence and has grown up drinking sweet-tasting, refreshing soft drinks," and they're seeking the same in their coffee beverages, stated Jonny Forsyth, global drinks analyst for Mintel, commenting on cold coffee's growth, reports Beverage Industry. Forsyth stressed that the cold coffee consumption trend isn't limited to metro markets, or a passing fad: It's been growing for the last few years, and it "reflects the changing tastes of the younger generation."

These consumers are major drivers behind "third wave" coffee houses and craft brands that, building on the Starbucks phenomenon, are taking attention to every aspect of coffee to a level previously reserved for oenophiles. Some of those brands, like Blue Bottle, are now starting to get serious backing and finding their way into natural and specialty retailers, for starters.

There is, of course, a potentially much bigger opportunity for large CPG companies like Kraft that can readily leverage their relationships and distribution networks in traditional mass retail channels. 

To tap that opportunity, Kraft will once again be going up against Starbucks, whose bottled Frappuccino is estimated to account for about 80% of bottled coffee sales.