GenZs prefer cold drinks over hot beverages:3 out of every 4 drinks are now sold cold in Starbucks

Gen Z preference for customized cold beverages is driving a structural shift in the beverage sector. Cold drinks now account for 75% of total drink sales at Starbucks, prompting global fast-food chains and Indian companies to expand their cold beverage portfolios. A changing consumer preference among younger drinkers is reshaping the strategy of global and Indian beverage companies. Originally established as a hot coffee retailer five decades ago, Starbucks now generates 75% of its total beverage volume from cold drinks. In the United States, cold beverages represent 70% of total company revenue, according to a report by BBC World. The shift includes iced fruit drinks, protein shakes, and customized iced beverages with flavor syrups and cold foams. Data from market research firm Worldpanel by Numerator shows that this consumer behavior extends beyond the US market. In Britain, consumers under the age of 25 choose cold drinks for 60% of their away-from-home beverage purchases. In contrast, consumers aged 55 and older select cold options only 30% of the time. Additionally, over 70% of young consumers purchase cold beverages throughout the year, rising to over 80% during summer months. Factors Driving Gen Z Preference for Cold Beverages Industry analysts attribute the growth of cold beverages to changing consumer habits among Gen Z buyers, who prioritize customization, social media appeal, and functional benefits. Product Customization: Younger consumers prefer drinks tailored to specific tastes, moods, and dietary preferences, giving them greater control over their purchase choices. Premium Pricing Acceptance: While price-conscious in general categories, young consumers show a willingness to pay higher prices for beverages that offer added health features or custom ingredients. Brand Identity and Presentation: According to Jerry Sheldon, an analyst at IHL Group, cold beverages function as a form of self-expression where visual appearance is as important as taste. Affordable Luxury: Vanderbilt University marketing professor Kelly Goldsmith notes that consumers in this demographic purchase branding and image alongside the physical beverage. Global Chains Adapt Menus to Target Young Consumers To capture demand from younger demographics, major global fast-food and coffee chains are updating their standard drink menus. When Starbucks launched its limited-edition Unicorn Frappuccino, foot traffic at its retail stores increased by 44% during the three-day promotional period, according to tracking data from Placer.ai. Competitors are following similar product strategies. Dunkin’ has introduced protein-rich customized cold beverages and partnered with public figures to launch limited-time drink lines. Meanwhile, fast-food operators including McDonald’s, Chick-fil-A, and Taco Bell are expanding their non-coffee cold selections, adding fruit refreshers and caffeine-free iced beverages. Indian Beverage Market Experiences Year-Round Cold Coffee Demand The demand for cold beverages is also expanding across India. Cold coffee has moved from a seasonal summer refreshment to a year-round staple among young urban consumers, increasing sales for iced lattes, cold brews, and ready-to-drink coffee products. Established consumer goods companies and direct-to-consumer (D2C) brands in India are adjusting their supply chains and product lines to meet this demand. Companies such as Nestlé India, Hindustan Unilever (HUL), and Tata Starbucks are introducing new cold beverage formats, supported by faster delivery times from quick-commerce platforms. According to Tata Consumer Products’ 2025-26 annual report, the company expanded its cold brew lineup in India by launching Zesty Orange and Coconut Cold Brew variants alongside its existing Vietnamese, Vanilla Sweet Cream, and Nitro Cold Brew offerings. The company also introduced protein-based cold foams in chocolate, banana, and vanilla options to serve the growing demand for cold customized drinks.