Espresso martinis have made a comeback at bars, but can their canned counterparts revive the hard coffee segment?
Just a few years ago, hard coffee drinks burst into the scene as major brands like Jameson, Jäegermeister, and Pabst Blue Ribbon brought together cold brew and alcohol in bottled or canned form. In 2019, for the 52-week period ending July 18, dollar sales for hard coffee hit $18.9 million, up more than 11,000% compared with the same time period the prior year, according to Nielsen CGA data.
But last month distributors shared that Pabst Blue Ribbon’s Hard Coffee was being discontinued. That may track with the overall performance of malt-based coffee beverages, which is down -36.7% over the last year in tracked trends, according to Cara Piotrowski, client insights consultant for market research firm IRI.
“However, there is a bright spot with spirits-based hard coffees, following broader trends in RTDs and led by growth from Cutwater Spirits and Buzzballz,” she said.
In contrast to PBR’s 5% ABV hard coffee, spirit-based RTDs leaders Cutwater Spirits and Buzzballz offer their versions of milky coffee cocktails closer to 15% ABV, hinting that the demand for hard coffee aligns with overall trends toward stronger or spirits-based RTDs. While more of a cocktail ingredient, Mr. Black— the top-selling premium-priced coffee liqueur—was acquired in September by Diageo which previously held a minority stake in the company.
Some malt-based coffee beverages are adjusting to the trend: Twelve5’s Rebel Hard Coffee recently launched a “BOLDER” line of hard coffee (8% ABV) in 16 oz cans. The brand’s best-seller is the 4-packs of Mocha and Vanilla (5% ABV) cans made with milk and coffee, but looking to the new year, it will be targeting expansion of its new line from convenience stores to on-premise locations, as well as at sports and event venues.
The decline of other hard coffee beverages is less related to consumer demand for hard coffee and more to the industry’s ability to make ready-to-drink coffee, according to Michael Sargent, senior brand manager of Twelve5’s Rebel Hard Beverages.
“The non-alcohol coffee category is under-supplied and many manufacturers are at capacity,” he said.
But that isn’t stopping other beverage makers from exploring canned espresso martinis. Several premium RTD producers have launched new SKUs in recent months aimed at appealing to coffee aficionados and craft cocktail fans. Atlanta-based TipTop’s new espresso martini is a collaboration with specialty coffee roaster Counter Culture Coffee, also headquartered in the South. TipTop has gotten traction in a handful of bars and restaurants in New York, Atlanta, and Denver since it launched November 1.
On the West Coast, the founders behind Golden Rule are hoping their new 24% ABV espresso canned cocktail will be picked up in on-premise channels soon. Like TipTop, it also partnered with a regional coffee business: in this case Bay Area-based Equator Coffee, a B Corp known for boutique chef blends and Fair Trade organic coffees. For the brand’s founders, who come from hospitality backgrounds, the aim was mainly to make the famously complicated drink a bit easier for mixologists behind the bar to prepare.
“Bartenders for the most part hate making an espresso martini,” said Golden Rule co-founder James Mauk. “Now there are coffee liqueurs but pulling an espresso shot or getting premium coffee can be kind of a nuisance.”
The new portable drink fits the active lifestyle of Equator consumers, said Helen Russell, the coffee roaster’s co-founder in a statement, and targeting consumers with active lifestyles may be an worthwhile angle for hard coffee RTD producers to pursue, as they can offer a buzz that differs from non-caffeinated RTDs that have been positioned towards golfers and other outdoor sport enthusiasts. Dallas-based Apres Hours – which contains 40 milligrams of caffeine, slightly less than a standard shot of espresso, and is made with agave wine – has touted its presence on tennis courts on Instagram, for example.
Within the growing consumer base for spirit-based RTDs, more than two-thirds still associate their consumption with ‘relaxing at home’, according to drinks data company IWSR. But findings show that penetration in on-premise channels has jumped from just 3.5% in 2019 to almost 11% in 2022. The recent report predicts that the channel is expected to be a valuable growth outlet moving forward.
Also targeting on-the-go consumers is Blossom , a new espresso martini brand based in Washington, D.C.
“Being a high-functioning executive — my background is in technology and venture capital — I was obsessed once I learned I could get the same caffeine boost at the bar or at my favorite restaurant that also powered me through the day in boardrooms or during countless pitches and meetings,” said founder David Jack.
In addition to launching distribution in the capital, Jack is partnering with outlets like Selina, the global chain of hostel/hotel and co-working spaces, and selling online.
While the espresso martini is a trendy cocktail, there have only been a couple of brands that have had success with this flavor, according to IRI’s Piotriwski. “Compared to other flavor segments in RTDs, coffee flavored alcoholic beverages are still niche and have a relatively smaller buyer base,” she said.
But RTD trends in flavor-forward cocktails, particularly vodka and tequila-based drinks, suggest cocktails with robust flavors like coffee could gain more traction in the market, she added. Additionally, RTD coffees have seen continued growth, so canned hard coffees would be a natural fit for innovation.
While tequila and vodka have been the leading RTD spirit bases, whiskey-based RTDs are now registering the fastest growth, according to IWSR. Austin-based Boldmove Beverages, now in crowdfunding stages, might be the first independent whiskey and cold brew can once it goes into production. Founder Jacob Guss is angling the 6% ABV with 120 milligrams of caffeine beverage as more of a coffee replacement for consumers in a young, socially vibrant city.
“Ours is a 12 ounce full-size drink that is coffee forward and has that smooth flavor of cold brew but you can taste the oaky flavor of the whiskey as well,” he said.