Title: Americans Love Iced Coffee. A Marketing Professor Explains Why.

Iced coffee is becoming America’s caffeinated beverage of choice.

The global market for iced coffee is expected to grow from $11.1 billion this year to over $21 billion by 2034, with North America claiming nearly half of the market share. Meanwhile, cold beverages like iced coffee made up 75% of Starbucks’ sales in the third quarter of fiscal year 2024.

One of the most significant drivers of this trend is age, said Wendy Zajack, the faculty director of the Integrated Marketing Communications and Design Management Communications programs in the School of Continuing Studies.

“It’s one of the biggest trends, having those great sweet drinks and kids getting exposed to them at a younger age,” Zajack said. “It’s this memory of our first experiences of coffee, and we get used to that being what coffee should taste like.”

The shareability of iced coffee concoctions and American tastes and preferences make the caffeinated drink a mainstay in the U.S. and on Georgetown’s campus, Zajack said.

In this Ask a Professor, Zajack explains the marketing behind iced coffee and why this cold caffeinated beverage is a particularly American phenomenon.

Ask a Professor: Why Iced Coffee is So Popular

What’s the main driver behind the surge in iced coffee’s popularity?

A lot of it is driven by age. As an old person, the first time I had coffee, it was hot. It was black. That’s what I think coffee is. One of the things that has propelled iced coffee drinking is Starbucks because it introduced the younger generation to iced coffee at an earlier age. I have kids who are in their 20s. When they were teens, they started getting frappuccinos and other sorts of cold coffee drinks. It introduced the whole concept of it in a way that wasn’t available to me when I was that age.

If you think about the first time you try a product, it’s how you think about the product going forward. Because of the prevalence of Starbucks or Dunkin’ and their iced coffee for a lot of young consumers, the first time [consumers] have the product is iced.

How does social media feed into this trend?

We share our favorite iced coffees. We have so many flavors of iced coffee. There are all these new ways that you can get a pump of this and a pump of that to make these creations of iced coffee. When we think about both this childhood memory of iced coffee being a thing for us and then this popular thing to try, those two together are powerful from a marketing perspective.

Why is this trend most pronounced in the U.S.?

There’s a lot of cultural significance around coffee. 

I worked in France for a French company. In France, coffee has a very particular taste, and you don’t mess with it. It’s in a small cup, and you don’t put cream in it, maybe sugar. There’s a lot of cultural context around what the taste of coffee is. What does coffee mean to your country?

In the U.S., we’ve had exposure to these types of sweet drinks such as iced coffee. Americans have a preference for iced things, weird for the rest of the world. We’re one of the few countries where you get a soda and it is loaded with ice. That has aligned well with coffee. It’s kind of a cultural preference that’s become very American.

We love our chocolate. We love our syrups, give us caramel, put whipped cream on it. I think my European coffee-drinking friends would say that it’s a horror what we’ve done to coffee. I would say it’s an amazing dessert.

Americans also like our energy drinks. Coffee, especially iced coffee, fits into that mid-afternoon slump. You can pick up a soda, but why not just pick up an iced coffee, which will give you that boost you need to get through the day? You certainly see this at Georgetown. Just check out at 3 in the afternoon to see all the med people [from Georgetown University Hospital] lined up at Starbucks.

How do coffee companies account for cultural differences in their marketing?

The companies are very good at this. You have to know your market and its taste preferences. Americans, we love our sweets, candies and cookies. In other countries, you might see different taste profiles, and some of them have come to the U.S. One I think about is matcha latte, which started not in the U.S. but has made its way here. We sweeten it a lot more probably than if you got a matcha somewhere else.

How do the customization options for iced coffee affect its marketability and popularity?

All of us want to feel like — to the brands that we like — we are the one and only and that our preferences matter the most. We love it when we think something can be customized to our taste preferences. It doesn’t matter if you’re at Starbucks, Dunkin’ or Coffee Republic down the street, listen to people’s coffee orders. They’re literally never the same — I want it half-sweet. I want it with a lot of ice. I want it with less ice. I want whatever it is.

By giving way to preference, it’s a way for brands and businesses to show us their love and their love for our uniqueness.

This also gets into the American psyche, where we are a country with a lot of diversity. We all want to feel like we’re getting our little special taste, and it makes us feel special.

Did consumers or coffee companies start this trend, and is iced coffee just a temporary fad?

It’s not that people have not been drinking iced coffee or that they created iced coffee as a concept, but I think [coffee companies] popularized it.

Everything in life and marketing is cyclical, but I don’t see hot coffee coming back anytime soon. I don’t think hot coffee is going away. But now, as millennials become parents and eventually Gen Z, they’ll introduce their kids to iced coffee, so I don’t see the trend going away anytime soon.

How do coffee shops distinguish themselves in a crowded market?

We have so many choices in terms of where we get our coffee, even on the compact campus of Georgetown. In terms of marketing, you have to have all the offerings. You have to have iced coffee, you have to have hot coffee, you have to have lattes. There’s an expectation of what you’re going to get. I think how coffee shops differentiate themselves is having a flavor of the month or week so we can get new varieties. I think having things that go with a coffee that are marketed specifically to you, a certain kind of food or snack, that’s a way to get folks out there.

The U.S. is an international country, so bringing in new flavors that appeal to different cultures is a good way to find uniqueness in the market space and cater to exactly what you want.

The thing I love about coffee is its cultural significance in society. If you think in terms of beverages, we have water drinkers. We have soda drinkers. We have juice drinkers. We have all these different segments. But coffee, at least in the U.S., is this unifying drink that many people across the culture drink.

Coffee has a ritualistic significance in society, so that gives marketers interesting things to work with as they sell and develop their products. Whether coffee is the first morning thing you do or an afternoon break with friends, it gives the product another layer of purpose besides just giving someone a drink and a jolt. When coffee companies can become part of your ritual, that’s pretty powerful from a marketing perspective.

Do you have a preference between iced and hot coffee?

I’m a mixed coffee drinker, but I will see people walking around campus in January with an iced coffee. It blows my mind because, to me, nothing is better than a hot cup of coffee, but I don’t think it’s a seasonal preference anymore. I have to have a hot coffee in the morning, and if I’m going to have an afternoon coffee, it might be iced depending on the weather.