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With the festive season over for another year, Ray Rowlands steps away from the mulled wine and mince pies to consider the progress of the iced coffee segment. In the UK, this is one of the smaller soft drink categories at present, for whom the seasonal window of demand has appeared somewhat limited. But, this may be about to change as exciting developments bolster category interest.

The UK is not renowned for its iced coffee culture. At a fraction of a litre per head, per capita consumption falls way below the European average, which itself is dwarfed by the international norm. The situation is rapidly changing, however, as adventurous consumers create new product opportunities, whilst suppliers pour their energies into promoting this rapidly-emerging category,

One domestic brand exemplifies these efforts. Founded in 2011 by Jim Cregan and his sister, Suzie, Jimmy's Iced Coffee has grown in four years to become a million-pound-plus business. With each passing month, Jimmy's Iced Coffee is gaining wider acceptance by both the UK retail trade and the country's public at large.

Despite a broader lack of industry background, the company is run with a real passion by its two founders whose first big break came in their launch year, when they were granted shelf space in Selfridges. This has been followed in subsequent years by listings with Waitrose and Tesco, with other retailers joining in along the way. The latest feather in the cap was November's announcement that the company had secured presence in Sainsbury's outlets. This latest success is projected to take annual turnover through the GBP2m (US$2.9m) barrier. Such results are impressive, especially considering that achieving a supermarket listing today has become something of an art. Indeed, Tesco, for one, is actually in the process of slashing thousands of its stores' SKUs. The creators of Jimmy's clearly have a flair for getting noticed.

The iced coffee brand contains five ingredients: water, British milk, ethically-sourced Demerara sugar, ethically-sourced coffee, and a thickener called Carrageenan. This obviously appeals to the growing health-conscious culture that wants to avoid unnecessary artificial ingredients.

The success of Jimmy's Iced Coffee has naturally attracted the usual wannabe impersonators. The Morrisons supermarket chain launched its own label iced coffee in 2013 with a very similar pack, reportedly produced by the same company as the one Jimmy's uses for its range. At the time, Morrisons' private-label offering was fairly unique, and there are still few own-label expressions on the market. Aldi has its Tizio pre-packed cups, and Tesco tinkered with the own-label concept in 2014, in collaboration with coffee shop chain Harris + Hoole. But, such products have had limited impact. As the category grows, own-label may take on greater significance but, at the moment, the UK public tends to put its faith in branded iced coffee drinks.

Jimmy's is one of a number of brands that is fuelling the UK's exploding iced coffee market, which  is rapidly approaching the 10m-litre mark, with volumes forecast to triple in the next five years. This achievement has been supported by the long-standing consumer interest in coffee, fueled by enterprising supplier acumen. Starbucks, from the US, is the current brand leader, followed by Switzerland's Emmi. Then comes a raft of smaller brands like Jimmy's, Frijj coffee milk from Dairy Crest and Mylk coffee flavoured coconut milk from Rebel Kitchen.

However, the UK iced, coffee market is not exactly homogenous. As well as a diverse variety of packs, covering cans, cartons, cups and plastic bottles - not to mention a range of flavour variants - it further sub-divides into two distinct product types, those which are milk-based, like Jimmy's, and those with a much higher coffee content, like Starbucks. Starbucks is seen by many UK consumers as a more traditional iced coffee. Supported by a guaranteed presence in the company's 760 coffee shops, alongside its retail sales, the Starbucks range enjoyed double-digit growth in 2014. 

Consumer interest, it appears, is now shifting towards milky iced coffees. However, milk-based coffee drinks are often misunderstood. To some consumers, they are seen as just another flavoured-milk option, competing against the likes of chocolate, strawberry and banana. This perception isn't helped by the fact that carton-packed iced coffees are often positioned by retailers in chiller cabinets alongside flavoured milks. Jimmy's, for one, is rectifying the situation by diversifying into 25cl slim cans, which sit well within the impulse channel. Tesco has also just accepted the can as part of its lunchtime 'Meal Deal' offerings, a step that should accelerate sales even further.

The UK iced coffee market is not only expanding, it is evolving from merely being a caffeine-boost alternative to energy drinks, to something approaching a meal in liquid form. Progress is not expected to end there. Opportunities exist for a whole spectrum of flavour, pack and product enhancements.

The market may be relatively small at present, but its potential is attracting new heavyweights, besides Starbucks and Emmi. An un-named multi-national, which the Cregans describe as being the world's third-largest drinks distributor, is said to have recently shown strong interest in guiding Jimmy's future. And, even if the negotiations only end in a distribution deal, rather than an outright acquisition, the potential ramifications for the UK iced coffee market in general, and Jimmy's Iced Coffee in particular, can only help enhance the burgeoning segment

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