The Future Looks Cold

Cold brew coffee, that is.

In recent years, the coffee industry has seen a shift towards what is considered the “Third Wave” of coffee. The first wave is considered to be the era of Folgers, where coffee became a common household commodity throughout America. The second wave was brought about mainly by Starbucks, which introduced a better quality coffee as well as a unique atmosphere within cafes. However, nowadays it is safe to say that Starbucks and its competitors have changed direction from quality and uniqueness to a more mainstream approach. There is no longer any significant quality in their coffee and espresso, no longer a unique style and experience in their cafes, and no longer any fuss from customers about spending slightly more for their drinks. The likes of Starbucks, Caribou Coffee, and Seattle’s Best are simply commonplace in today’s world, just as Folgers was before the second wave stole the show. Now, history is repeating itself as the third wave enters the stage.

Possibly the best analogy to describe this third wave of coffee is to think of it like the craft beer movement within the beer industry. You have the big name breweries such as Anheuser-Busch, Yuengling, and Coors that can mass produce beers that appeal to the general population. These breweries represent coffee companies such as Starbucks and Caribou. But then you have the craft beer companies that have been gaining not only massive amounts of popularity but also a huge share of the industry’s market. These are companies like Dogfish Head, Sierra Nevada, and Lagunitas. It is these breweries that are extremely focused on producing the highest quality of beer using only the highest quality ingredients. They are in no means focused on producing a mainstream beer that everyone will like. See where this is going?

The third wave coffee companies (Blue Bottle Coffee, Stumptown, Intelligentsia, and Counter Culture to name a few) are impacting the coffee industry just as the craft breweries did the beer industry. They are focused on sourcing only the best coffee berries from the best farms around the world, roasting them to perfection, and using extremely precise brewing processes to create a perfect cup of coffee. Yes, this cup could cost you $12, but were you one of the people complaining about the jump in price when the second wave hit? Again I remind you, history is repeating itself.

Blue Bottle is a company that I have been following closely over the past few years and they are a prime example of the success of this third wave. Having received tens of millions in investments from names such as Kevin Systrom and Google Ventures, Blue Bottle has been able to expand quite rapidly throughout San Francisco, LA, New York, and now internationally with the recent opening of a cafe in Tokyo. Many of their third wave competitors are also located in these majors cities along with Portland, OR being another major hub.

Each of these third wave coffee companies all tend to be fairly similar in a few ways. First and foremost, they all roast and brew fantastic coffee and espresso. This is because they all share the similar view that coffee should be treated in the same way as a craft beer or delicate wine rather than a household commodity. They believe coffee should be produced in a way that reveals its true flavors and aromas rather than being dumbed down to a pumpkin and cream filled beverage. These companies are also similar in the sense that their cafes have unique, modern, industrial designs. They are all visually appealing and create an environment like no other. The last similarity I will point out is that most of these third wave companies are now selling a product that has never been seen before in any of the previous waves: cold brew coffee.

Cold brew coffee? You mean iced coffee? Sort of, but not really. Cold brew is a process in which cold water is mixed with coffee grounds and left to steep for a long period of time, generally in the vicinity of 12 hours. The result is an almost syrup-like coffee concentrate that is typically mixed with milk or water. The concentrate is good for about a week and will hold its flavor for that duration. This is far superior to the typical iced coffee or iced latte many of us are used to. Iced coffee is simply hot coffee that has been poured over ice or chilled in a refrigerator and then served. Both of these methods cause the coffee to lose its most essential flavors and also can cause it to become watered down. Iced lattes are made by pouring hot espresso over ice and then adding milk to form a latte. Pouring espresso onto ice destroys its most important flavors. Cold brew coffee undoubtedly creates a better tasting iced coffee but is not seen as viable to many coffee companies due to its long brewing process.

The third wave coffee companies each have their own take on cold brew coffee. Some examples include Blue Bottle’s New Orleans Iced Coffee and Stumptown’s Single Origin Cold Brew Coffee. A few companies strictly produce cold brew only and sell it bottled in big glass jars. Examples are Chameleon Cold Brew, Grady’s, and Slingshot Coffee Company.

In order to deal with the long brewing process of cold brew, many companies have created unique ways for selling their cold brew other than having it ready for a barista to pour. Various cafes have their cold brew packaged in cartons or glass bottles for customers to grab and go. Serving kegged cold brew on tap is also becoming a big trend in cafes along with selling cold brew growlers. Customers can come back to have their growlers refilled from the tap, just like at a beer store. Another rising trend is kegging cold brew with nitrogen, creating “Nitro Cold Brew”. This creates a creamy beverage with a foaming head, similar to that of a Guiness beer. Cuvee Coffee will soon begin offering their nitro cold brew, Black & Blue, in cans just like it were a beer or soda.

As new trends continue to arise and these coffee companies continue to fight for the best iced coffee beverage, customers are continuing to drink more and more iced coffee. According to a 2011 survey conducted by Dunkin’ Donuts, nearly 80% of iced coffee drinkers said they are drinking more iced coffee now than a year ago. The results also showed that winter isn’t a problem for cold coffee beverages due to the fact that 56% said it is never too cold to drink iced coffee.

The rise of the third wave of coffee has gained a great deal of traction and is here to stay. With that being said, I would also argue that cold brew coffee is one of the most important products that has come from this new wave. It has changed so much as a product in an extremely short amount of time and still holds massive potential. It is a product that should continue to receive a respectable amount of attention by those within the industry. Cold brew coffee is, without a doubt, a major factor in the future of coffee companies.