How Profitable Can Commercial Cold Brew Really Be?
Written by Tim Egan – Brew Bomb
Fueled by it’s craftability, higher caffeine content and it’s appeal to the savvy consumer, Cold Brew coffee has been one of the fastest growing segments in the coffee industry over the past few years. The best example of this trend is the shift in consumer consumption patterns for specialty coffee which is expanding and showing up in many more retail locations beyond the typical shop where Ready to Drink (RTD) Take Away products are in high demand Cold brew uniquely satisfies this demand because of it’s craftability, longer shelf life and the fact it can be stored in bulk.
The Challenge and Barrier to Entry:
Many roasters and coffee shops currently offering Cold Brew are doing so using immersion brewing or buying it wholesale and are finding the challenges to scale production to be daunting. Specifically:
- “Traditional” bucket (Immersion) brewing and 24 hour brew cycles are difficult to scale or efficiently produce Cold Brew on-demand in the coffee shop.
- Consistency and quality across batches is challenging with immersion brewing.
- Crafting Cold Brew, using immersion brewing, is labor intensive and time consuming.
- Transportation challenges with wholesale Cold Brewing are expensive and require cold-chain vehicles to distribute the product.
Is it possible to overcome these Barriers and Make Money producing Commercial Volumes of Cold Brew?
Absolutely! Brew Bomb offers leading edge, Kyoto style drip brewing technology to address each of these challenges to easily scale the production of high quality, consistent Cold Brew, batch to batch. More importantly, the business case supports a rapid return on investment given the current market conditions.
The graphic below outlines a high level business case producing 100 gallons of Ready to Drink Cold Brew utilizing Brew Bomb’s X-60 Commercial Brewer.
- As you can see, the gross profits are very compelling with commercial Cold Brew production equipment ranging from 60% to 80% depending upon the target market segment.
- In addition, commercial Cold Brew production allows you to offer both wholesale and retail products which help diversify risk and provide alternative revenue streams to grow your business.
- Based on this approach, your return on investment (ROI) is more realistic and easier to achieve than you might currently believe. With some conservative brewing estimates, a business can recoup the initial capital investment in one to two months or 6 to 24 brew cycles depending upon the blend of wholesale vs. retail revenues.
It is clear that an investment in Brew Bomb technology can position your business to scale the production of Cold Brew yielding a rapid return on investment while generating high profit margins in order to keep up with the demand of this explosive RTD market segment. In addition, selling into the retail segment of the market is much more profitable and will deliver significantly higher gross profits and revenues for your business.
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