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Cold Brew coffee is a new niche for German startups

Coffee has become a new art, and Cold Brew a genre in itself. The coffee beverage is not brewed, the powder usually draws for several hours in cold water, depending on the recipe times eight or even 24 hours. Thereafter, the concentrate is filtered and bottled.

In the US, startups earn millions from this. For example, Texas based Chameleon Cold Brew sold around € 8.3 million in 2015, and in 2017 it was bought by Nestlé for an unknown amount. In Germany, however, cold brew manufacturers are still at the very beginning. Of the millions in turnover, young companies like Karacho or Philosoffee are far away.

“Cold Brew is a niche. That still takes at least two years in Germany, “says Philosoffee co-founder Benjamin Thies in an interview with Gründerszene and NGIN Food. The same applies to its competitors Karacho, Lycka and Motel. The Berlin startup Philosoffee has been on the market since mid 2017. It was selling its bottles in around 400 organic supermarkets and 200 cafés for around three euros. Last year, Thies and his team converted a low six-digit amount. For 2019, Philosoffee set a high target and wanted to target a scarce million euros.

It’s going too well not to keep going

While Philosoffee and the Berlin based Nitro Coffee Startup Motel are increasingly focusing on catering, Karacho sees its customers primarily in retail. The Augsburger started three years ago, selling their cold coffee in 1,900 DM stores and at Rossmann, as founder Jonas Braun tells. Since its founding in 2016, its startup has sold more than a million cans. One costs around two euros. However, the CEO does not want to reveal how much Karacho has actually taken.

Social startup Lycka launched its Cold Brew last March. In addition to coffee, the hamburger sell ice cream and power bars. In 2018, Lycka claims to have written a mere six figure turnover with iced coffee alone. The category accounts for only about ten percent of total sales. But it’s going too well not to keep going,” says Lycka founder Felix Leonhardt to founder scene and NGIN Food.

This is not a profitable niche for startups

Although the business of cold brew startups is growing, cold coffee can not be successful in the long run, say online retailers Coffee Circle and Roast Market. The Berlin based company Coffee Circle has been distributing coffee and accessories through its online shop since 2011. Chief Martin Elwert is certain and stated, “I do not know any brand that has both a strong focus on quality and the financial power to bring their cold brew to the German supermarkets.” He believes that traders are primarily products from well known corporations how to put Tchibo and Melitta on the shelf. “The only way I see is the way to gastronomy,” he continues.

Karacho founder Braun, on the other hand, would not trust catering as a sales channel alone. “Cafes often use their own cold brew and do not offer startup products,” says the founder. This is also believed by Boris Häfele, CEO of the coffee online shop Roast Market. Every coffee roaster produces his own cold coffee. Häfele sees in cold brew  no unique feature. Startups should rather have more products in the range than just cold coffee.

Lycka founder Leonhardt believes another reason to know why it does not make the drink out of the niche. “He believe that the Germans have so far not understood cold coffee.”

Philosoffee co-founder Thies says, “Cold Brew is for the German Market too expensive. Especially since the cold coffee is rather drunk in large cities, the trend is not nationwide.

New projects launched by Philosoffee

To get more attention, the Berlin based Philosoffee have launched two new projects. Their own cold brew shot in cooperation with Jägermeister and a coffee with the trendy hemp substance CBD. The CBD cold brew will be released in April and contain up to 15 milligrams of cannabinoid. This ingredient is similar to Cold Brew in the US has long been a hype, but is still in its infancy in Germany.

Published inStartups

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