- RTD coffee drinks are getting sweeter, and more processed
- Over 50% of Americans’ daily diet is made up of processed foods, compared to just 8% of their European counterparts
- Sugary processed drinks are easier to push in the US market, but consumers now want more transparency
READY-TO-DRINK (RTD) coffee is increasingly dominating beverage aisles, and it’s getting sweeter and more processed by the minute.
These products face more hurdles in the EU due to stricter regulations, while encountering less resistance in the US where market regulations are looser. However, global demand for transparency may soon shift this.
Sugary drinks meet Gen Z’s demand for sweet flavours, and coffee brands are taking note. Despite health concerns around sugar intake, sweet drinks remain a market entry point for young consumers, which is key to their success.
“The growth of sweet, processed RTD coffee is driven by consumer demand for convenience and indulgence, with brands focusing on dessert-like flavours and premium experiences,” says Krzysztof Barabosz, Head of Coffee at Hard Beans and Co-Founder of Hardtank.
“Starbucks, Dunkin’, and other mainstream brands have fuelled the popularity of these offerings. We need to keep in mind that high sugar content appeals to the palate, creating an addictive flavour profile that encourages repeat purchases. The combination of sugar and caffeine are also attractive stimulants.”
Major brands are jumping into the market with iced lattes and flavoured cold brews. Starbucks’ Frappuccino and Pumpkin Spiced Latte, Dunkin’s Iced Coffee available in various flavours like French Vanilla and Mocha, McCafé’s Frappe, Jimmy Butler’s BIGFACE Iced Lattes, Monster’s Java Coffee, and International Delight Iced Coffee are just some examples of sweet, heavily processed RTD coffee drinks on the market.
The global RTD coffee market, valued at $22.44 billion in 2019, is projected to soar to $64.78 billion by 2032, fueled largely by growing demand from Gen Z consumers who favour sweet, customisable drinks. The industry’s reliance on convenience and sugar-heavy flavours has proven to be a winning combination in the US, where sugary and indulgent coffee drinks are widely popular.
RTD coffee’s appeal is multifaceted. It taps into the consumer desire for grab-and-go options, catering to an increasingly mobile lifestyle.
Starbucks Frappuccinos, McDonald’s McCafé drinks, and Taco Bell’s new collaborations with creamer brands highlight the importance of ease, but also flavour variety, as consumers can choose between mocha, caramel, vanilla, or any number of syrup-laden combinations.
These offerings align with the Gen Z penchant for indulgent, sweet beverages, making sugary RTD coffees highly marketable. The trend toward ultra-sweet coffee drinks is particularly strong in the US, where sugar content and customisation have been key selling points.
The dark side of sweet: ultra-processed foods in coffee
While sugary RTD coffee drinks are flying off the shelves, they are not without their drawbacks.
Many of these beverages fall into the category of “ultra-processed foods” (UPFs), a term used to describe products that are heavily altered through industrial processes and loaded with additives like sugar, syrups, preservatives, and artificial flavours.
“Ultra-processed foods are widely accepted in the US despite their health risks, due to aggressive marketing through movies and TV and YouTube advertisements, and to consumer demand for convenience,” says Krzysztof.
“In my honest opinion, the average consumer may not be fully aware of how much processing or sugar goes into these beverages.”
UPFs are under increasing scrutiny for their detrimental health effects, contributing to rising rates of obesity, diabetes, and other chronic diseases – globally, and notably in the US.
“From my experience during several visits to the United States, the demand for these types of products there is higher than in Europe,” says Krzysztof.
“The US has a culture that is more accepting of sugar-heavy processed foods, as reflected in consumer habits and product offerings. This trend is mirrored in other sectors like soft drinks, where the demand for sweetened beverages remains high despite increasing awareness of health risks.”
Sugar, in particular, has come under the spotlight. For years, dietary fat was demonised as the primary cause of health issues, allowing sugar-laden products to escape much of the blame. But recent research shows that excessive sugar consumption, especially from beverages like RTD coffees, is a major factor in the global rise of diabetes, heart disease, and even certain cancers.
“We get a lot of media and social media about how bad sugar is for health, how it can be as addictive as some drugs, and the health consequences of habitually consuming sugar,” says Ildi Revi, Chief Learning Officer at Purity Coffee.
For example, Action on Sugar discovered that 98% of the 131 hot flavoured drinks found in the big high street coffee shop chains would carry a “red” warning for excessive levels of sugar, if labelling this was legally required.
Meanwhile, Ildi highlights that the Centers for Disease Control and Prevention’s National Diabetes Statistics Report 2023 finds that 11.3% of the US population have diabetes and that of these, almost 23% are undiagnosed. Type 2 diabetes, which can cause serious damage to the body over time, accounts for about 90-95% of all diagnosed cases of diabetes.
Despite these health risks, sugar has become normalised in the food and beverage industry, particularly in the US, where indulgence is a key marketing tool.
“It’s a shame, because a lot of clinical research is being done on coffee’s compounds that might actually contribute to effective weight management, particularly its chlorogenic acid content,” says Ildi. “There is a growing amount of epidemiological evidence of chlorogenic acid’s impact on glucose metabolism and inflammation in relation to obesity, type 2 diabetes and metabolic syndrome.”
But consumer backlash against UPFs has gained momentum in recent years, as shoppers become more aware of the negative health impacts of processed foods.
Several high-profile cases have highlighted the potential dangers. Brands are increasingly being held accountable for misleading labels and unhealthy ingredients, with consumers demanding greater transparency about what is in their food and drinks.
As awareness grows, sugary RTD coffee beverages—long seen as harmless indulgences—are now under scrutiny for their contribution to poor health outcomes.
A tale of two markets: the US vs. the EU
The US and EU present two very different landscapes for the sale of ultra-processed, sugary RTD coffee products. In the EU, regulations around food and drink ingredients are stricter, with governments placing a greater emphasis on ingredient transparency to empower consumers.
73% of the food on the grocery store shelves in America is ultra-processed and the US is currently the top-ranked country for UPF consumption in the world, alongside the UK. Over 50% of the average American’s daily diet is made up of processed foods.
In contrast, a pan-European study from the EIT Food Consumer Observatory on consumer
perceptions of UPFs in 2023 found that only 8% of European consumers eat UPFs daily.
European shoppers are generally more health-conscious and scrutinise what they consume more carefully, making it harder for companies to push ultra-processed products. The EU’s emphasis on sustainability and health-consciousness also influences purchasing decisions, where products high in sugar and additives are viewed more critically.
“In the EU, food and drink products are required to have clearer ingredient labels, including full disclosure of additives, preservatives, and processes,” says Krzysztof.
“Artificial ingredients, high sugar content, and UPFs are also under greater scrutiny. The EU is taking a more cautious approach to food safety, often banning or restricting ingredients that are more widely accepted in the US.”
By contrast, the US has traditionally been a more permissive market for UPFs, including sweet RTD coffee drinks. While the FDA regulates food and beverage products, its oversight is seen as more lenient, with fewer barriers for companies to bring ultra-processed products to market.
In some cases, products can be commercialised without explicit FDA approval, creating grey areas in product safety and regulation. The recent Snapchill controversy exemplified this: the company had to recall its RTD coffee products after they were found to contain potentially toxic substances. These products had not been FDA-approved, raising concerns about the effectiveness of US food safety regulations. While the Snapchill incident was resolved, it highlighted the lax oversight that can sometimes characterise the US market.
However, it may also signal a turning point. In the wake of Snapchill’s recall, US consumers are becoming more vigilant, demanding higher standards of transparency and safety from brands.
“Consumer expectations are changing in the U.S,” says Krzysztof. “The rise of the wellness movement, heightened awareness of the dangers of excess sugar and processed foods, and demand for ‘clean label’ products all point to a growing interest in transparency. Younger generations, particularly Millennials and Gen Z, are more likely to push for more ingredient transparency and healthier options.”
As awareness of the health risks posed by sugar and UPFs grows, the push for cleaner labels and ingredient integrity could challenge the dominance of ultra-processed RTD coffee products in the US.
The landscape for ultra-processed RTD coffee is shifting. While sugary drinks have long been easy to sell in the US, growing health concerns and consumer scrutiny may force brands to rethink their strategies.
“Balancing government-mandated rules with individuals’ freedom to make informed decisions is at the core of America’s identity and values,” says Ildi. “It is political, and as such, politicians and parastatal organisations generally default to inaction rather than making a stand on public health.”
“While stringent regulations can protect certain groups of people (like adolescents, children or vulnerable groups) from predatory marketing and ensure the safety and integrity of food products, Americans, in general, would consider it more in line with ‘freedom’ to empower consumers with transparent, accurate information so they can make choices that align with their personal health goals and values.”
As consumers become more aware of the risks associated with ultra-processed foods and beverages, the days of pushing syrup-laden coffee drinks without question could be coming to an end.
Whether the US will follow the EU in adopting stricter regulations and a more health-conscious approach remains to be seen – but the tide is starting to turn.
Coffee Intelligence
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