Dunkin’ Brands Group will partner with Coca-Cola Co. to sell bottled iced coffee in grocery and convenience stores, the company said.
The Canton-based coffee chain said it will roll out a new line of refrigerated coffee early next year. The product will be manufactured, distributed, and sold by Coca-Cola, the Atlanta-based beverage giant.
Financial terms of the arrangement were not disclosed.
“This is a fast-growing segment of the coffee business, and it’s growing about 8 percent per year,” Dunkin’ Donuts chief executive Nigel Travis said Thursday. “We saw white space, which means very little competition, and we saw that as a real opportunity.”
Dunkin’ Donuts is already the top seller of iced coffee in the United States; its entrance into ready-made beverages follows that of Starbucks, which sells bottled drinks in a joint venture with PepsiCo. Inc.
The broader ready-to-drink coffee category has grown strongly in the past five years, reaching $2.3 billion in sales, Travis said Thursday, citing Nielsen research.
The new drink will be made by Coca-Cola to Dunkin’s specifications with Arabica coffee blends, the company said. The bottles have not yet been designed.
Jorge S. Olson, author of the book “Build Your Beverage Empire” and an industry consultant based in San Diego, said the new coffee confections in convenience stores are likely to appeal to energy drink consumers who are aging and switching to chilled coffee drinks.
“This is absolutely going from zero to 100 miles per hour in a quarter of a second” for Dunkin’ Donuts, Olson said. “And this is an incredible play by Coca-Cola into the energy drink category.”
Dunkin’ Donuts has been a partner with Coca-Cola since 2012 to serve its soft drinks, juices, and other beverages at many of its 12,000 restaurants around the globe. Nearly all Dunkin’ Donuts locations are franchised, but Travis said he does not think the new ready-to-drink beverages will draw business away from those shops.
“We strongly believe that this product launch is good for customers and for our franchisees,” Travis said.