Growth in the UK RTD iced coffee market is being driven by convenience, coffee-shop-inspired flavours, innovation, and consumers drinking iced coffee across more occasions throughout the day.
The Arctic Coffee brand is benefiting from strong performance in take-home formats, product innovation, and its positioning around quality, taste, and value.
Arctic’s new Decaf Café Latte is attracting new shoppers and creating additional consumption occasions, helping grow the overall category rather than simply replacing existing sales.
Abigail Kelly, Head of Marketing & Insight at Arctic Coffee, tells Grocery Trader what makes Arctic Coffee unique and what the future looks like for the iced coffee sector.
How is the UK RTD iced coffee category performing?
The UK RTD iced coffee category continues to perform strongly and is now worth £377m, with growth showing no signs of slowing. It remains a dynamic and exciting space, with more shoppers entering the category and existing consumers purchasing more frequently as iced coffee becomes increasingly embedded in everyday routines. This growing penetration and frequency demonstrates the category’s continued momentum and the significant opportunity it presents for retailers.
Is the market in growth and what is driving the growth?
Yes, the category is seeing strong growth, up +8.3% in value and +5.8% in volume. This momentum is being driven by convenience, indulgent coffee-shop-inspired flavours and continued innovation across the category.
We’re also seeing consumers incorporate iced coffee into more moments throughout the day, expanding consumption beyond the traditional morning occasion. As these occasions broaden, so too does demand for products that meet different consumer needs — from lower-calorie and functional options to caffeine-free choices.
How is Arctic Coffee performing?
Arctic Coffee continues to perform really well. The brand is now worth £31m RSV and holds an 18.2% volume share, making it the number two brand in RTD iced coffee. We’re also seeing strong momentum in take-home formats and innovation-led growth, showing that our focus on accessible, great-tasting products is resonating with shoppers.
How is the new Decaf range performing?
Arctic Decaf Café Latte has performed strongly since launching in May, delivering consistent week-on-week growth. More recently, performance has been further boosted by a dedicated out-of-aisle shipper in Tesco, giving the product greater visibility and helping us reach shoppers beyond the traditional RTD iced coffee fixture.
What’s particularly encouraging is that Decaf appears to be bringing new shoppers into the category, including consumers whose needs weren’t previously being met by the existing fixture. It’s also giving existing iced coffee drinkers more flexibility to enjoy the category at different times of day or when they want to moderate their caffeine intake. That means we’re not simply adding another product to the fixture; we’re helping to unlock new shoppers, occasions and incremental growth for the category.
What makes Arctic Coffee unique?
What makes Arctic Coffee unique is our ability to combine great taste, quality and value.
Our iced coffees are made with fresh British milk at our creamery in Devon, delivering the smooth, indulgent taste consumers expect, but at an accessible price point.
As an independent brand, we’re also able to be agile and respond quickly to changing consumer tastes and emerging needs. In such a fast-moving category, that allows us to continually innovate and bring relevant new products to the fixture, while staying true to the quality and value Arctic is known for.
What are the key consumption occasions for iced coffee?
Iced coffee has become a year-round choice, although the category naturally sees an uplift during the warmer months. Increasingly, though, consumers are enjoying iced coffee across different moments throughout the day — from a morning pick-me-up or on-the-go drink, to an afternoon refreshment or simply as an alternative to a traditional hot coffee.
As these occasions continue to broaden, we’re also seeing opportunities later in the day. This is creating demand for greater choice, including decaf options that allow consumers to enjoy the taste and experience of an iced coffee while moderating their caffeine intake.
What are the key trends influencing the iced coffee sector?
Innovation continues to drive the category, we’re seeing growing interest in balanced and lifestyle-led choices, including lower sugar, lower calorie, and caffeine-moderation options. Consumers want flexibility — the ability to enjoy iced coffee at different times of day without compromising on taste. This shift, alongside demand from health-conscious shoppers and younger consumers, is creating new opportunities for brands to expand the category.
What does the future look like for the iced coffee sector?
The future for iced coffee looks very positive, with plenty of headroom for continued growth as the category attracts new shoppers and becomes an increasingly established part of everyday routines. We expect innovation to remain a key driver, from new flavours and expanding take-home formats to products that respond to evolving consumer needs and unlock new consumption occasions.
Choice will be increasingly important, with opportunities to cater for different lifestyles and moments throughout the day — whether that’s through functional benefits, lower-calorie options or caffeine-free alternatives. Ultimately, the brands that continue to innovate around how, when and why people enjoy iced coffee will help drive the category forward.
What marketing activities are currently supporting the brand?
We’ve had strong support behind the brand this year, including a digital-first marketing campaign and partnerships with key influencers who love Arctic Coffee. We also invested in YouTube, Spotify and OOH advertising, alongside sampling at major festivals this summer. In-store activity and retailer collaborations helped further drive visibility, and we also celebrated 10 years of Arctic Coffee with a range of activity throughout the year.
What are the brand’s key products that multiple retailers should be stocking?
Our best-performing products in grocery are the single-serve Caramel Latte and Latte, alongside the 1L take-home versions of both flavours. We’re also seeing growing demand for Double Shot and our Protein Caramel Latte, which are becoming firm favourites with shoppers.
How do you work with multiple retailers to grow sales?
We work closely with our retail partners to drive category growth, combining impactful in-store activation and seasonal POS with range and category insights that help ensure the right products are available in the right places. We also support new listings through our social channels and collaborate with retailers on digital activity to extend reach beyond the fixture. By aligning our activity around key seasonal moments, particularly the important summer period, we can work together to increase visibility, encourage trial and ultimately drive sales across the category.
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