Running the Numbers: Iced Coffee Is Hot!

Iced coffee seems to be gaining tremendous popularity as the summer months bring on the heat. And according to data from NPD Group's Consumer Reports on Eating Share Trends (CREST), servings of iced and frozen coffee drinks have shown a 20 percent increase during the first months of 2009 over the same time period last year. The company's research also found young adults between the ages 18 and 34 make up 39 percent of the iced beverage's consumption. Even the National Coffee Association has data procaliming coffee consumption among 18 to 34-year-olds has recently hit record highs.

All this iced coffee commotion probably helps explain why franchises and other brands - 7-Eleven, McDonald's, Starbucks, Dunkin' Donuts and Cold Stone Creamery - are all unleashing various iced-coffee products or promotions this summer.

7-Eleven just rolled out its new iced coffee products. Pilot programs for iced French vanilla and mocha flavors were so successful the brand has distributed new refrigerated iced coffee beverage dispensers at 4,500 U.S. 7-Eleven stores. The new iced coffee machines are located near the Slurpee and Big Gulp self-serve cold-drink machines or on the hot-beverage bar. Unlike frozen coffee drinks, 7-Eleven customers dispense the coffee drink over ice into new clear cups.

"If taste tests are any indication, this is one of the best beverages we've ever introduced," says Jay Wilkins, 7-Eleven brand manager for cold beverages. "As the beverage machines rolled out across the country and the stores introduced iced coffee, it has become an instant hit. It gives coffee-lovers a great-tasting, refreshing alternative to a hot cup of joe."

Since iced coffee-drinkers tend to be younger, 7-Eleven's strategy is to reach young adults (that 18 to 34 category), typically on-the-go college students and young professionals.

A month-long ad campaign in June featured promotional radio spots and outdoor, metro rail, and bus transit advertising in select markets, online viral marketing including a new 7-Eleven iced coffee website and coupon emails, store signage and point-of-purchase displays.

With double-digit growth rates, the iced-coffee category accounts for between 15 and 20 percent of sales within quick-serve restaurants and coffeehouses, and consumption could reach 1 trillion cups this year, according to Nielsen AdViews Competitive Tracking.