Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, September 7, 1994 TAG: 9409070117
SECTION: BUSINESS PAGE: B8 EDITION: METRO
SOURCE: ASSOCIATED PRESS
DATELINE: NEW YORK LENGTH: Medium
Consumers have demonstrated a sizeable thirst in recent years for something new and tasty, an alternative to variations on colas.
Juice drinks, flavored waters, sports drinks and iced teas all have done surprisingly well when packaged in bottles and cans.
At the same time, coffee bars have re-emerged as hip social settings. The trend toward moderation in alcohol consumption also has helped prod the search for a new drink.
So has the inventiveness of the urn-meisters at the coffee cafes.
Is iced coffee in the convenience store cooler case or in the vending machine in the lunch room far behind?
Pepsi-Cola Co., the second-largest U.S. soft-drink maker, recently announced a partnership with Seattle cafe chain operator Starbucks Coffee Co. to develop coffee beverages for sale in bottles or cans.
But some consumer researchers say Americans have little taste for cold coffee and doubt the beverage ever will attain the popularity of iced tea and assorted New Age beverages.
``There will be small pockets of people who will think it is incredible,'' said Doug Hall, who heads the consumer research firm Richard Saunders International. ``But cold coffee tends to cause a gag reflex in most persons.''
Ready-to-drink coffee has been a big hit in Japan, where it is widely available in vending machines that can deliver either hot or cold cans.
But bottled or canned coffee barely has registered in the United States, where consumers spent more than $49 billion last year on carbonated soft drinks.
Ready-to-drink coffee sold one-tenth of a percent of that figure last year. Beverage Marketing Corp. estimates consumers spent about $60 million last year on ready-to-drink bottles and cans of coffee.
That is about the level that Diet Cherry Coke and Diet Squirt each achieved in 1993, publisher Jesse Meyers of Beverage Digest says.
Iced-tea sales, on the other hand, are expected to surpass $1.5 billion this year and sports-drink sales are approaching $900 million.
Iced tea and sports drinks have gotten a lift via new entries from both Pepsi and soft-drink industry leader Coca-Cola Co. over the past few years.
Pepsi hopes its new drinks, the first of which is expected to reach the market next year, can fuel similar growth in coffee.
Industry watchers say the obstacles are formidable.
``Eighty percent of the tea consumed in the U.S. is iced tea,'' said Emanuel Goldman, beverage analyst for PaineWebber in San Francisco. ``By contrast, the lion's share of coffee consumed here is hot coffee. Iced coffee is going to be a tougher sell.''
Goldman said the taste will be crucial to success.
Philip Morris Cos.' General Foods USA division accounts for about two-thirds of domestic bottled coffee sales with its Cappio Iced Cappucino, according to Beverage Marketing's Hellen Berry.
Cappio has been available nationally since the fall of 1992, and is sold in vanilla, mocha and coffee flavors in eight- and 24-ounce bottles.
by CNB