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Maxwell House Introduces New Iced Latte with Foam to Attract Younger Consumers
Falling Out of Favor with Consumers
Maxwell House, a 131-year-old coffee brand, is looking to reestablish its popularity by appealing to younger consumers. Over the years, Maxwell House has lost its position as the top coffee brand due to consumers' shift towards more sophisticated coffee options like espresso machines, French presses, and cold brew makers.
Even within the instant coffee segment, Maxwell House ranks third, trailing behind Nescafe and Folgers in terms of market share. Additionally, it faces competition from Starbucks and Dunkin', which offer more convenience and variety.
The Introduction of Iced Latte with Foam
Maxwell House aims to bridge the gap and attract new customers with its new product, the Iced Latte with Foam. This instant drink is touted as the first of its kind, requiring just one packet, a cup of cold water, and a spoon. It offers simplicity and affordability, with each package containing six packets priced at just $6.99, making each individual iced latte cost only $1.17.
The Iced Latte with Foam comes in three flavors: vanilla, hazelnut, and caramel. It is available nationwide at major retailers and on Amazon.
Kraft Heinz's Revived Interest in Coffee Sales
Parent company Kraft Heinz previously considered selling its coffee unit in 2019 but decided to keep the coffee brands, although they were not the main focus of its turnaround strategy. However, Kraft Heinz now shows renewed interest in coffee sales.
Under the leadership of Tiffin Groff, head of Kraft Heinz's North American coffee business, Maxwell House gained market share for the first time since 2016. Groff, who joined Kraft Heinz from Peet's Coffee, launched IHOP-branded coffee last year, targeting younger consumers. Next year, Kraft Heinz plans to launch iced lattes with foam under the IHOP name.
Capturing the Cold Coffee Trend
The introduction of the Iced Latte with Foam aligns with the growing trend of consuming cold coffee beverages. Starbucks, for example, reports that more than half of its U.S. drink sales are cold beverages, mostly consumed by millennials and Gen Z.
Despite the popularity of iced lattes with foam, making cold coffee drinks at home has been a challenge. Only 7% of coffee consumed at home is cold. Maxwell House aims to capitalize on this opportunity and drive growth for the brand with its new product line.
The Future of Maxwell House
In addition to the Iced Latte with Foam, Maxwell House plans to revamp its brand next year. This includes updated packaging and a new tagline: "Live Life to the Last Drop." With these changes and its innovative products, Maxwell House hopes to regain its position as a beloved coffee brand among consumers of all ages.
Conclusion: The Potential Impact for a New Business
The introduction of Maxwell House's new Iced Latte with Foam and its efforts to appeal to younger consumers carry important implications for new businesses in the coffee industry. While Maxwell House has been facing challenges and losing market share to more sophisticated coffee options, its innovative product and strategic approach highlight valuable lessons for new businesses aiming to establish themselves.
Firstly, the Iced Latte with Foam addresses the need for simplicity, convenience, and affordability. By offering a quick and easy solution for making iced lattes at home, Maxwell House taps into the growing trend of consuming cold coffee beverages. For new businesses, this signifies the importance of understanding market demands and identifying unique selling points that cater to consumer preferences. Developing products that meet these needs can help attract and retain customers.
Additionally, Maxwell House's efforts to revamp its brand and align with the changing market demonstrate the significance of adapting to evolving consumer expectations. With updated packaging and a new tagline, the company aims to rejuvenate its image and regain its standing among consumers of all ages. For new businesses, this highlights the importance of continuously reinventing and modernizing their brand to stay relevant to target audiences.
Furthermore, the involvement of Kraft Heinz, Maxwell House's parent company, emphasizes the value of industry expertise and strategic partnerships. With Kraft Heinz's revived interest in coffee sales and its collaboration with head of North American coffee business, Tiffin Groff, Maxwell House experienced an increase in market share. This indicates the potential advantage of aligning with established industry players or recruiting experienced professionals to navigate competitive landscapes for new businesses.
Overall, Maxwell House's initiatives serve as a "hot take" for new businesses, illustrating the importance of understanding market trends, developing innovative products that cater to consumer needs, adapting brand strategies to stay relevant, and leveraging expertise through partnerships. By employing these insights, new businesses in the coffee industry can position themselves for success in a competitive and evolving market. Article First Published at: https://www.cnbc.com/2023/07/26/kraft-heinz-launches-maxwell-house-instant-iced-latte-with-foam.html
