Artisanal turn: the rise of cold brew and nitro coffees - Inside FMCG

Artisanal turn: the rise of cold brew and nitro coffees

Nitro coffee

Coffee has been the saving glory for many during the long months in lockdown and has served as the ultimate survival method when working long hours.

As more and more consumers are staying home to keep themselves safe, 2020 has seen the emergence of cold brews and ready-to-drink (RTD) coffee. Consumers across Asia-Pacific have become their own baristas, using pour-overs by the popular Hario or Kalita brands from Japan to brewing equipment like V60s, Moka Pots or Syphon. 

It’s not simply cold brews gaining traction in 2020 but particularly the rise of nitro coffee. But what is nitro most would still ask? This niche drink is a cold brew coffee that is infused with nitrogen. It has low acidity but is still bold and full-bodied in flavour. Similar to how draft beers are dispensed, the infused nitrogen has sweet notes that subdue any bitter taste. Unlike the usual cold brews it’s served with froth on top, like beer.

Tamara Urukalo, Kahlua global VP marketing, said its own take on the nitro drink is the Kahlua Nitro Cold Brew RTD. The dark brown liquid is topped with a creamy foam layer similar to a beer froth. The aroma of arabica coffee wafts into the air with hints of caramel spiked with the popular Kahlua sugar cane rum. It also has vanilla and chocolate notes.

“At that time we were experimenting with a nitro widget, for another product in our range, the Espresso Martini RTD, which enables us to deliver a product with more body, texture and mouthfeel. So, the decision was made to incorporate this same technique to our Nitro Cold Brew RTD,” said Urukalo.

It may seem more expensive to produce this type of coffee but Urukalo said it isn’t. It does, however, require more time to steep the coffee – over 18 hours. She said there’s a growing interest in espresso martini and the spirits-based RTD market is also “experiencing rapid growth, driven by millennial-aged consumers looking for simple, convenient products to fit their busy lifestyles”.

Nitro coffee on the rise in Asia

In the Philippines there is an emergence of a third-wave coffee community. Gone are the days when Filipinos would buy only instant coffee at the supermarket or flock to Starbucks for a hot cuppa on rainy days. The emergence of pour-over cafes in Manila and as far as Siargao with beans hailing from the mountains of Sagada or the well known Barako coffee from Batangas, the industry has come a long way.

Richard Torres, More Coffee managing director, told Inside FMCG about how he discovered this niche market. He and Mikel Antunez are the co-founders of Nitro 7 Coffee & Tea Bar in Manila.

“It started in 2015, two friends and I were hanging out and got to talking about how we wanted to have our own coffee shop. The three of us, all businessmen in different fields, only had our love for good coffee in common, and we decided to take the plunge and become the first to introduce nitro coffee to the Filipino. We spent about a year doing intensive research, trial and error, consulting with experts in the field; and with a whole lot of gut feel, we launched Nitro 7 Coffee in August 2016,” said Torres. 

He said they saw the growth of third-wave cafes in the country but wanted to veer away from the trend using the usual espresso machine approach. This led them to doing something more niche with nitro using Arabica beans.

“We grind our dark roast coffee to a medium coarse level, brew it for 18 hours in cold temperature, pour it in a keg, infuse it with nitrogen, let it sit for a day, and then serve,” he shared.

But is it more costly to create nitro as it sounds quite a bit more complicated than a pour-over? Torres said it depends on the equipment the cafe uses. The “cost incurred in our production is time and labor”. It takes two days for Nitro 7 to brew and prepare the product. 

Supporting the livelihood of local farmers 

The coffee farming industry has suffered during the pandemic as cafes shut down and lockdowns affected the delivery of coffee beans from farms. It also limited the access to equipment, pesticides and fertilisers as costs rose. Covid-19’s effect on global economies and currencies depreciating against the dollar is also likely to increase the cost of fertilisers in coffee producing countries. The depreciation of Latin American currencies, for instance, is likely to affect coffee producers’ profitability in 2020.

“Workers in the coffee sectors of many countries, including Brazil and Colombia, are defined as essential workers who must continue to work during the pandemic,” Ryan Whittaker, consumer analyst at GlobalData Retail, told Inside FMCG. “New measures to mitigate Covid-19 risks, such as PPE and extra sanitation, are likely to be unsupported and patchy in application, which may lead to Covid-19 outbreaks on farms.

“Coffee bean markets have been tumultuous and consumption has continued, but the loss of on-trade consumption will send reverberations down to the farm level, especially for growers of ultra-premium coffee, which is more typically consumed in cafes.”

Urukalo said the impact on the sector may be more visible in the second half of 2020 during the harvest season.They are currently working with the non-profit organisation Fondo para la Paz (FPP) to “help mitigate any further disruption to our business partners that could impact the coffee farmers’ livelihoods”. They have donated funding to help them survive the crisis.

Meanwhile, Pernod Ricard’s Kahlua has the “Coffee for Good” initiative to support Mexican coffee farmers and their families. It works with Fondo para la Paz and the farmers from the indigenous communities in Veracruz, Mexico. 

“We have a responsibility to make sure we work towards minimising and proactively preventing the negative impact that the farming, production and sourcing of coffee currently [has] on our planet. The goal is to have 100 per cent of Kahlúa’s coffee sourced from sustainable communities in the ‘Coffee For Good’ program by 2022,” shared Urukalo.

Sustainability in coffee production

Kahlua also addresses sustainability with its packaging. Shipper case suppliers have Forest Stewardship Council certification (FSC), which ensures a product is made with or contains wood coming from FSC-certified forests or is made from post-consumer waste.

“Sustainability will play a very significant part in coffee as the world begins to move past the pandemic. While it’s taken a bit of a back seat during the Covid-19 outbreak, global consumers are increasingly conscious about what they consume, and this definitely applies to coffee. People want to know where the coffee comes from and how ethically, environmentally and socially conscious the parties involved are,” Whittaker added.

While Nitro 7 uses paper cups in its cafes, which are located in Philippine shopping malls such as SM, Ayala Mall and Robinsons, Torres also encourages customers to bring their own tumblers for their drinks to lessen the usage of paper cups.

“For our lockdown baby – our newly introduced cold brew kits – plastic bottles were our best option, so we made sure to use recyclable ones. We also made it a point to include a reminder to recycle the bottle on our labels,” Torres said.

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