Key facts
- Gen Z consumers are increasingly choosing customizable cold drinks over traditional coffee.
- Starbucks states that three out of every four drinks it sells are now cold.
- Customization, size, visual appeal, and functional benefits drive younger consumers' choices for cold drinks.
- Social media platforms like TikTok are instrumental in promoting limited-time cold drink offerings.
- Cold drinks are a significant part of Starbucks' US beverage sales and turnaround strategy.
Younger consumers, particularly Gen Z, are increasingly favoring customizable cold beverages over traditional hot coffee, a trend that is significantly impacting the strategies of major beverage chains. Consumers like 21-year-old Elaine Ling express a preference for local cafes for their 'real coffee' while visiting Starbucks primarily for its cold drink options, citing Starbucks' coffee as 'too sweet.'
Starbucks reports that three out of every four drinks it now sells are cold, including iced fruity drinks, protein shakes, and 'dirty sodas.' This shift is attributed to younger consumers viewing drinks as a form of self-expression and a way to tailor their consumption to specific moments or needs. Analysts suggest that customization, larger sizes, layered appearances, and functional benefits help justify higher prices for these cold beverages, making them feel like an 'affordable luxury.'
Social media platforms, especially TikTok, play a crucial role in promoting these drinks, as seen with Starbucks' highly publicized Unicorn Frappuccino, which boosted foot traffic significantly. Other chains are actively trying to capture this market. Dunkin' is experimenting with protein-boosted and customizable cold options, partnering with celebrities like Kylie Jenner. Fast-food giants such as McDonald's, Chick-fil-A, and Taco Bell have also introduced fruit-based refreshers and other non-caffeinated cold drinks aimed at a younger demographic.
Data from the UK indicates this trend is not exclusive to the US, with shoppers under 25 purchasing more cold drinks than hot when out of the home. This preference for cold beverages extends beyond summer months, with a majority buying them year-round. Marketing experts note that the 'infinite personalization' of cold drinks offers high-profit margins for chains, and this category has become a cornerstone of Starbucks' strategy to revive sales after a period of weaker performance.