Gen Z's love for cold coffee has brands chasing beverage boom

Hyderabad: For India's younger coffee drinkers, the beverage is less about a steaming hot mug and defined more by iced lattes, cold brews, and cold coffee cans.

The occasional indulgent drink, consumed mostly during peak summer, is emerging as an everyday beverage, pushing companies from Nestle India, Hindustan Unilever (HUL), and Tata Starbucks to direct-to-consumer (D2C) brands like Sleepy Owl racing to build what they believe could become one of India's fastest-growing beverage categories.

Nestle India said cold coffee has emerged as one of its rapidly-expanding segments over the past 18 months, with the ready-to-drink category delivering consistent double-digit growth. Alongside ready-to-drink offerings, the company is expanding formats such as Iced Roast, Frappe, and cold beverage vending machines to "broaden appeal and accelerate the overall growth of the cold coffee segment".


"Cold coffee clearly has the potential to evolve into a massive category in India, and that is central to our long-term strategy," Sunayan Mitra, head, coffee and beverages at Nestle India, told ET, adding that the category's low base and strong youth appeal offers a long growth runway. The push mirrors a broader global trend, with Nestle identifying cold coffee as a key growth opportunity across markets.

Rival HUL is also widening its ready-to-drink portfolio under Bru to cater to growing interest across consumption occasions, said Rajneet Kohli, executive director, foods and refreshment.

Executives attribute the trend to the rise of Gen Z consumers who prefer cold, on-the-go beverages, and are looking to move away from colas, the cafe boom that introduced them to the world of cold coffees, and the rapid growth of quick commerce, which has made cold coffee more accessible at home.

Tata Starbucks highlighted continued demand for cold brews and iced lattes, increasingly extending beyond just the summer months. "Tier-2 markets account for a higher share of orders, highlighting the widespread appeal of these offerings beyond metropolitan centres," said Mitali Maheshwari, head of product and marketing, Tata Starbucks.

For startups that entered the category early, the biggest shift is that cold coffee is losing its seasonal tag.

Sleepy Owl, who's ready-to-drink business contributes about 30% of overall sales and growing at 60-70% compounded annually, said winter demand fluctuations have narrowed sharply over the years.

"Pre-Covid, winter sales could drop 60-70% compared to peak summer months," said co-founder Ajai Thandi. "That decline has now come down to around 20% and from next year, we expect sales to be uniform throughout the year," he said, adding that quick commerce has been a major unlock for the category.

Zepto said Vietnamese coffee has remained its top cafe product regardless of the season. "What started as curiosity is now becoming a ritual," said a spokesperson for the quick commerce platform.

On Flipkart Minutes, cold coffee consumption surged twofold between January and March this year and nearly fivefold by May, while searches rose 4. 6X. Demand for sugar-free cold coffee jumped eight times, while hazelnut and chocolate variants recorded fivefold growth.