Starbucks puts coffee on tap with nitro cold brew
Starbucks plans to start tapping kegs this summer — for ice-cold coffee.
The Seattle-based coffee company said Tuesday it will introduce a nitrogen-infused version of its cold brew coffee in stores as it aims to capitalize on the explosive growth in chilled coffee drinks.
The company that made a morning hot coffee run a staple of American culture wants a stronger presence in cold beverages. It could not only boost sales during hot summer months, but help store traffic in what might otherwise be sluggish afternoons and evenings.
Starbucks said iced coffee consumption has grown 75% in the past decade and sales of cold brew in particular grew nearly 340% between 2010 and 2015, based on data from market research firms NPD Group and Mintel. Even Dairy Queen, the fast food chain known for its soft-serve cones and Blizzard treats, last week started selling iced coffee and mixing its soft serve with cold coffee to make drinks called frappes.
After Starbucks introduced cold brew last year, sales of iced coffees grew 20% in the fiscal year ended Sept. 27. Starbucks expects cold coffee sales to double in the next three years. The company declined to give specific sales figures.
Nitro cold brew coffee started dotting menus of local cafes and trendy shops like Stumptown Coffee Roasters in the past few years. It's often served on tap like beer, and has a creamier, richer taste than regular cold brew coffee, which is brewed with cold or room temperature water, vs. iced coffee made by serving hot brewed coffee over ice.
Dairy Queen aims at Starbucks, McDonald's with iced coffee
Nitro cold brew will make its way to more than 500 Starbucks stores this summer, including those in Portland, Ore., Seattle, New York, Chicago, Boston, Los Angeles and San Francisco. It's already started rolling out to a handful of Seattle stores. Starbucks serves its nitro cold from a tap, without ice, which could give the stores a little more of a tavern ambiance. The company also announced that it will start serving a vanilla sweet cream cold brew this summer in the U.S. and Canada.
Specialty coffee shops in particular have had more success luring diners in recent years, with sales growing faster than at fast food restaurants for the past three years, according to Euromonitor. With that in mind, Starbucks has started crafting a higher-end experience for customers with the opening of its Seattle roastery in December 2014 and another planned for New York in 2018. The stores are set up to educate people about Starbucks' brewing process, allow interaction with baristas and showcase the company's Reserve line with beans roasted in-house. The Seattle roastery already sells nitro cold brew.