The coffee landscape is continually evolving, and two industry leaders, Nestlé and Starbucks, are set to reshape the market with their latest offering: Starbucks Coffee Craft concentrate. This innovative product aims to provide the authentic taste of Starbucks coffee while catering to the rising demand for cold coffee beverages.
The launch occurs during a critical period for the coffee sector. Despite a robust global supply of coffee beans, ongoing conflicts in the Middle East are driving up transportation and production costs. Additionally, climate change is projected to elevate coffee prices in the long run across the supply chain.
This uncertainty is pushing companies to diversify their products and channels, with notable mergers like Keurig Dr Pepper’s recent $18 billion acquisition of JDE Peet’s, anticipated to spur innovation throughout the industry.
Starbucks Coffee Craft
Starbucks Coffee Craft will initially debut in the UK, Japan, and Korea this year, with plans for a broader rollout across Europe and Asia by 2027. This premium concentrate is crafted from high-quality Arabica coffee, offering a rich and genuine flavor, and will be available in two varieties: Rich Black and Signature Caramel.
“Whether using water, milk, or plant-based alternatives, consumers can now personalize their coffee experience — from iced Americanos to iced caramel macchiatos — with a simple pour and from the comfort of their homes,” comments Ethel Touitou, Nestlé’s global category lead for Starbucks.
Both Nestlé and Starbucks view the cold coffee segment as a high-growth market, with forecasted values reaching over $4 billion by 2030. Their combined expertise positions them well to meet the growing demand for personalized, indulgent, and convenient coffee options.
Nestlé and Starbucks introduce premium cold coffee concentrate amid growing consumer demand.
The Global Coffee Alliance
Starbucks Coffee Craft builds on the Global Coffee Alliance, a partnership formed eight years ago between Starbucks and Nestlé, merging Nestlé’s global reach and manufacturing abilities with Starbucks’ strong brand identity.
“The launch of Starbucks Coffee Craft underscores the strength and impact of the Global Coffee Alliance, bringing the Starbucks experience beyond our coffeehouses. By collaborating with Nestlé, we can expand our coffee experiences into new formats and reach a larger audience worldwide,” shares Nik Dodi, VP for the Global Coffee Alliance at Starbucks.
Since its formation, the alliance has greatly increased the availability of Starbucks-branded products in various channels, including consumer-packaged goods and food service, with Starbucks products now accessible in nearly 80 markets globally.
Global Coffee Pressures
Food Ingredients First recently analyzed how global coffee prices have declined significantly from peak levels in early 2025, as Rabobank predicts the first substantial production surplus in five years. Nevertheless, this correction faces new hurdles due to the closure of the Strait of Hormuz, which is increasing freight rates, insurance costs, and fuel prices while supply conditions improve.
Additionally, recent analysis from GlobalData warns that climate change presents a long-term risk for coffee procurement and operations, transcending mere agricultural challenges.
Industry pressures like rising costs and climate change challenge the coffee supply chain.
Extreme weather events across major coffee-producing regions are altering the suitability of areas for coffee cultivation. GlobalData highlights that these changes lead to a more fragile supply chain, evident through erratic harvests for farmers, uncertainty in raw material supply for manufacturers, and increased pricing.
Industry forecasts suggest these challenges will not be temporary. Rabobank estimates that about 20% of current Arabica-growing regions might become unviable by 2050, potentially shifting production to fewer, more concentrated areas.
“If the zones suitable for coffee cultivation shrink, the risk of supply shocks intensifies, which can exacerbate pricing and availability issues,” explains Katamaneni Greeshma Kasturi, a consumer analyst at GlobalData. “Quality is also at stake. Practically, climate change influences not just the volume of coffee production but also impacts the consistency of its flavor and overall quality.”
“Consumers experience the effects primarily through pricing. The FAO noted a nearly 40% price increase in 2024, largely driven by supply disruptions due to adverse weather. However, consumers are also affected in other ways, including limited choices as certain origins or grades become harder to source, fewer limited releases, discontinued premium options, and occasional lack of stock.”
As companies like Nestlé and Starbucks navigate these complexities, it’s vital to expand product offerings, target rapidly growing segments, and enhance supply chain resilience to maintain profitability and satisfy consumer demand in an increasingly challenging environment.
Key Takeaways
- Nestlé and Starbucks have launched a premium cold coffee concentrate called Starbucks Coffee Craft.
- The product will first be available in the UK, Japan, and Korea, before expanding to Europe and Asia.
- Starbucks Coffee Craft comes in two varieties: Rich Black and Signature Caramel.
- The launch aligns with the Global Coffee Alliance formed between Nestlé and Starbucks eight years ago.
- Industry pressures, including climate change and supply chain disruptions, are impacting coffee prices and availability.
FAQ
What is Starbucks Coffee Craft?
Starbucks Coffee Craft is a premium concentrated coffee made from high-quality Arabica beans intended for cold coffee beverages.
Where will it be available first?
The product will initially launch in the UK, Japan, and Korea.
What are the available varieties of Starbucks Coffee Craft?
It will be available in two varieties: Rich Black and Signature Caramel.
Why are coffee prices increasing?
Factors such as climate change, supply chain disruptions, and increased demand are contributing to the rising costs of coffee.
What is the Global Coffee Alliance?
The Global Coffee Alliance is a partnership between Starbucks and Nestlé aimed at expanding the availability of Starbucks products beyond traditional coffeehouses.
In summary, the introduction of Starbucks Coffee Craft represents a strategic move by Nestlé and Starbucks to capture the growing demand for cold coffee while navigating the challenges posed by climate change and market fluctuations. This collaboration promises to enhance coffee accessibility and personalization for consumers worldwide.
