Coffee drinkers are expected to savor their brew in the morning and change it to soda or water as the day goes by, but the world’s largest beverage companies want to turn that morning cup of joe into an all-day thing— and an heir to the sodas that consumers have wanted.
On Monday coffee giant Keurig Green Mountain acquired Dr Pepper Snapple, the maker of 7UP, Hawaiian Punch and other popular drinks. What’s the exact reason behind that? Throughout the day, they wanna reach the customer. That’s according to a company news release.
Analysts say the new firm is to be named Keurig Dr Pepper, is in their mission to reinvent America’s favorite morning or breakfast drink. For the last two years, many of the country’s largest coffee chains and beverage-makers have aggressively pushed some new product lines to be consumed in the afternoon and evening. Some of the firms are Panera and Stumptown, owned by Keurig’s corporate parent, JAB Holdings.
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“They seem to really want to branch out beyond breakfast,” expressed Zoe Leavitt, a senior retail analyst at CB Insights, a market research company. At first glance, Dr Pepper Snapple seems an odd target for a rising kingdom of coffee. The creator of more than 40 sodas, fruit juices, energy beverages has nonetheless been a perpetual second runner-up, behind Coca-Cola and Pepsi.
Meanwhile, JAB Holdings — a German firm owned by a family of secretive billionaires — has spent the past six years snapping up not only companies that make coffee but also restaurant chains that sell large volumes of it. In addition, creator of K-Cups and coffee machines, JAB owns or invests heavily in Peet’s, Panera, Caribou, Au Bon Pain, Krispy Kreme, Stumptown Roasters, Intelligentsia and Jacobs Douwe Egberts, the world’s largest coffee-only company.
But as bizzare as Dr Pepper may seem in the trends, third-wave coffee roasters, analysts say the acquisition fits into the rise to transform your morning cup of joe into the usual soda alternative. Since the middle of 2015, Starbucks rolled cold brew out to all of the stores in US and claimed by the media as people’s afternoon refreshment.
The reasons are twofold, said James Watson, a Rabobank senior beverage analyst.
First of all, young adults are very less likely making their own morning cups at home, it’s one of the reasons of the rising of coffee break. In 2010, for example, the National Coffee Association found that only 1 in 10 coffee-drinkers had a cup at lunch. That research had unshockingly risen to 1 in 4 by 2016.
Above all that, most people are turning away their backs soft drinks — automatically puts the firms in crisis and advantages in the coffee industry.
“We’re seeing these coffee drinks now that actually resemble soda,” Watson said. “It’s a way to get into the segment, because coffee is natural and healthy and tracks with consumer trends.”
Among the firms getting in on all-day coffee, Watson said, are some of the world’s largest soda brands: Pepsi makes Starbucks’ ready-to-drink coffees, and Coca-Cola last year launched versions of Dunkin’ Donuts and McDonald’s coffees. The action isn’t narrowed to bottled drinks. Analysts see the growth of cold brew as the coffee shop menu for their afternoon customers. In the future, Watson predicts, some chains will also offer sparkling and flavored coffees as lunchtime pairings, right next to their soda fountains.
We all not yet to know what Keurig Dr Pepper is up to or will do. News flash, Keurig’s chief executive, Bob Gamgort, said that the company main concern would be on consumers need today. But a recent launch from elsewhere in the JAB empire may offer a glimpse of what’s to come. Last February, Stumptown Coffee Roasters released a “Sparkling Cold Brew” in aluminum cans, which it advertised as a summer road soda.