Sumidagawa Brewing.
Image: Yumi Nakatsugwa

Asahi YOU. US, Ltd has found an innovative way to further the circular economy. The wholly owned subsidiary of Asahi Group Japan, Ltd, was established in January 2022 with a focus on sustainable products and activities, not only within the Asahi Group but also in collaboration with municipalities, universities as well as other business entities. Coffee and tea companies are now benefitting from two of its craft beers, Kuramae Black and Sayama Green, which are using coffee and green tea remnants or by-products that are infused into the beer.

Kuramae Black is a coffee-blended stout beer, named Kuramae after the location of Asahi’s initial product partner, Ennoki coffee roastery. The company hopes Kuramae Black will become popular among the local community and be recognised as a special product of the region. As a coffee roaster, Ennoki conducts test roasts before finalising the roasting profile of each coffee bean. They were concerned that there was nothing to do with the remaining test-roasted beans after cupping, other than discard them. Subsequently, Asahi YOU. US developed the idea of making a craft beer using the test-roasted coffee bean.

Kuramae Black launched in July 2021. It is brewed in Sumidagawa Brewing, which had been experimenting with a coffee-flavoured beer for a long time, and it was aware that stout beer could be the best to blend with brewed coffee, as it has some similarities in colour and flavour. “Since we source the test-roasted coffee from Ennoki and another two roasters now, we cannot expect a high level of consistency unlike when we order the specific blend for the product. We closely communicate with those roasters about when and how many beans we need for the next batch so that they can prepare the stock,” said Ichiro Moda, unit leader of Asahi YOU. US. “However, it is inevitable that the taste and flavour of the bean as well as those of Kuramae Black are slightly different each time. We positively see this variability as one of the characteristics of Kuramae Black.”

Sumidagawa Brewing, a microbrewery located on the premises of the Asahi Group’s head office, produces craft beers such as Kuramae Black and Sayama Green. It was originally established in 1995, and now is under the management of Asahi YOU. US. When making Kuramae Black, it brews stout beer and coffee separately, then blends them at about 70 and 30 percent, respectively. The stout beer contains 7-8 percent alcohol, which is reduced to 4.5 percent in Kuramae Black.

Left: Kuramae Black. Right: Sayama Green
Images: Asahi YOU. US, Ltd

Going Green

Sayama Green is beer blended with a green tea infusion, which launched in April 2022. Sayama in Saitama Prefecture, north of Tokyo, is one of the most famous tea-producing districts in Japan. When making Sayama Green, they use a by-product of sencha called keba-cha (hairy tea). Keba-cha is the surface of the stem of the tea leaves that comes off during the rolling and drying process and is separated from the sencha in the final cleaning by a sorting machine.

When producing Sayama Green, keba-cha is brewed in room temperature water for three hours in order to extract a clear liquor with sweetness and umami, without much bitterness or astringency. After the infused keba-cha is strained, the liquor is boiled for a few seconds to sanitise it. Finally, the cooled infusion is blended with an Indian Pale Ale (IPA) of 30 to 70 percent, with an alcohol content of 4.5 percent.

Keba-cha is sourced from three young tea producers in Sayama: Okutomien, Yokotaen and Ishidaen. Masahiro Okutomi of Okutomien explained, “When neatly shaped whole leaf sencha is sorted, some by-products are collected separately such as stems, powdery leaf, keba-cha and so on. Those by-products are still drinkable and usable teas. They are refined by firing or roasting, then sold as stem tea, roasted tea, or powdery tea in tea shops. Keba-cha can be added to tea bags after cutting into smaller particles.” He said that it is also helpful to clean up the tea- processing machines before resuming manufacturing, since the hairy keba-cha can absorb tiny dust or odour in the machines. “We are pleased to offer keba-cha as a raw material for Sayama Green, that is a unique and effective way to utilise keba-cha and increase its value.”

Asahi YOU. US supplies its craft beers in barrels for catering services, mainly beer restaurants or pubs in the neighbouring areas. The canned products are also sold in liquor shops or ecommerce sites. The company produced 3,300 litres of Kuramae Black in 2022 and estimates it will produce 4,200 litres in 2023. Asahi YOU brewed 4,050 litres of Sayama Green in 2022 and expects 4,100 in 2023.

• Yumi Nakatsugawa has been working as a freelance writer specialising in food and restaurant management. While freelancing, she developed a love of black tea as well as tea- producing countries and tea people. Her passion for black tea has brought her to Sri Lanka, India, Kenya, Indonesia, Nepal, Malaysia, and Papua New Guinea to see tea production firsthand. Based in Japan, Yumi may be reached at: ym_n@nifty.com.

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The Argentinian tea and coffee markets are steadily growing this year thanks to generally improving economic situation in the region and stable domestic demand.

Argentina has rich traditions of tea and coffee drinking. While the Covid-19 pandemic and serious financial problems of the country had resulted in a serious drop of consumption of both drinks, the market has almost completely recovered, although the rise of coffee prices by almost 150 percent in the last year put a serious pressure on the market.

For many global coffee majors, the expansion into Argentina along with Brazil, is a priority due to the potential, which is associated with the Latin American region and the exodus of business from the markets of Russia and Ukraine — once the most important emerging markets for them.

With the population of more than 47 million people and a status of the second largest country in the Latin American region, Argentina has always been under the radar of some major tea and coffee producers.

Emanuele Uccellini, the Caribbean and Latin America BU Director for Lavazza Group BU Americas told T&CTJ in an exclusive interview, that Lavazza has been present in the Argentina for many years, and that the market represents a top priority within the Latin America region for two main reasons:

1. The growing interest of consumers in high-quality coffee brands. The demand for specialty coffees has been increasing significantly, especially during the pandemic, and we’ve seen the trend keep growing, mostly among younger consumers.
2. The relevant presence of people with Italian roots: they always feel at home when they sip a good Lavazza cup of coffee.

The Argentinian coffee market has always been of interest to other global majors as well.

One of them is JDE Peet’s, which in recent years has significantly strengthened its positions in the local market. A spokesperson for JDE Peet’s, said, “JDE Peet’s does sell a range of products across our brand portfolio in Argentina including NCC capsules. We anticipate that the demand for coffee and tea will only continue to grow globally. We recently signed an agreement to acquire Marata’s coffee and tea business in Brazil, and South America in general is an area in which demand for coffee and tea is increasing.”

The Argentinian market also attracts the interest of global coffee chains, many of which are considering accelerating expansion in the local market in years to come, which is primarily done through the expansion of the existing portfolio. One example is Starbucks, which considers the local market as a priority for its growth.

A Starbucks’ spokesperson told T&CTJ, “Starbucks entered Argentina in 2008 with our first store in Buenos Aires. Today, the brand operates over 130 stores in the market, providing employment opportunities to over 1,700 green apron partners,” noting that earlier this year, Starbucks celebrated its 15^th anniversary in Argentina, together with its licensed business operator, Alsea.

In April 2023, the spokesperson said that Argentina took a significant step toward a more sustainable future by certifying its first two Starbucks Greener Stores. “This is part of Starbucks global vision to have 3,500 Greener Store-certified locations worldwide, aiming to cut our climate, water, and waste footprints in half by 2030. Starbucks Argentina also continues to expand its plant-based menu offerings in an effort to deliver increased options for our customers.”

Furthermore, in collaboration with Alsea, Starbucks announced plans to operate 2,000 Starbucks stores in the 12 markets where Alsea operates the brand globally by the end of 2025.

Starbucks and other leading Western coffee chains operating in the country have faced strong competition with local players. An example of this is Café Martinez chain, a local chain that has almost doubled the number of its outlets within Argentina the last few years and which plans to continue its active expansion in years to come.

Coffee consumption is growing

A senior researcher at Euromonitor International said that in 2022, the total volume sale of coffee in Argentina is set to post a third consecutive year of growth, following a decline during the outbreak of Covid-19. “For the current year and beyond even though consumers have returned to pre-pandemic habits, total volume consumption is forecast to grow much slower. This is due to the long-term unstable economy, increased poverty, and high inflation, which is diminishing the purchasing power of middle and low-income consumers.”

However, coffee is set to post the highest total volume and current retail value growth in hot drinks, driven by the widening use of instant coffee, which began seeing consumption growth in 2021 and 2022. Instant coffee benefits from being affordable, while offering a widening variety of coffee mixes. New coffee consumers tend to start with lighter options, with less coffee flavour and with more milk content, with the inclusion of chocolate and other ingredients.

The coffee industry has suffered a major world price hike due to drought conditions in Brazil, which led to considerably lower production and higher freight costs. Coffee pod consumption rocketed as consumers prioritised high-quality coffee with a desire to replicate foodservice experiences at home. The coffee pod category was also stimulated by a continuous entry of new brands, including La Morenita, La Virginia, Jacobs, L’Or, Viaggio, and Nestlé Argentina’s latest novelty with Starbucks. Sales of coffee pods were fueled by the growth of ecommerce, the fastest-growing channel in the hots drinks industry in 2022.

According to Euromonitor’s spokesman, retail value sales of coffee in Argentina increased by 67 percent in current terms in 2022 to ARS 80.3 billion The instant coffee mix category was the best performing one in 2022, with retail value sales rising by 75 percent in current terms to ARS 5.4 billion. Retail sales in 2022 had a CAGR of 59 percent, hitting ARS 811 billion (CAGR of 15 percent over the forecast period 2022-2027).

Coffee does grow in Argentina; however, it is produced in only a single plantation in the Yungas — a bioregion of a narrow band of forest along the eastern slope of the Andes Mountains from Peru and Bolivia. It emerged in the early 1970s under the name of Café Baritú when authorities in the province launched an ambitious plan to make Northern Argentina a coffee-producing area.

Graciela Ortiz, the owner of Café Baritú in an interview with the Argentinian iProfesional business paper said that the coffee produced on the Salta farm is Arabica. “It is actually a mixture of two Arabicas, one Colombian and the other Brazilian,” he specifies. “It has a very subtle flavour, with fruity, perfumed notes.”

As for coffee, although Argentina is still far from countries like Norway, Finland or the United States in terms of coffee consumption – being stagnant for years at a per capita consumption of only one kilo per year – the sector has shown sustained growth recently, which is mainly due to the rise of popularity of coffee among local customers.

According to a study conducted by the Argentine Coffee Chamber in collaboration with the firm The Brand Bean, today, coffee in Argentina represents 45 percent of the beverages chosen compared to all other beverages and is consumed mostly by people between 25 and 44 years old.

Most local citizens prefer milder coffees instead of stronger roasts as in many European countries. According to some media reports, an average of one kilo of coffee per capita is consumed annually (208 cups) in the country, with the instant variety being the most consumed. Nine out of 10 Argentines prepare it at home and approximately 50 percent of consumers add milk.

Regarding the most chosen varieties, young people seek to customise it and choose to consume cold and instant coffees. On the other hand, those over 35 years of age choose the capsule format.

According to experts of La Nacion, local consumers are increasingly interested in knowing everything about the product: who makes it, what differential attributes it has, what extraction method enhances it, what the differences are between varietals and what the different types of filtering are like. In addition to choosing coffees from more exotic origins, such as Kenya, the Dominican Republic, Honduras or Haiti, they also turn to cold brew when the temperature rises.

Tea-growing & consuming are strong

In the case of tea, retail value sales grew by 62 percent in current terms in 2022 to ARS 21.3 billion. Green tea was the best performing category in 2022, with retail value sales rising by 73 percent in current terms to ARS131 million.

Retail tea sales had a CAGR of 41 percent in 2022, reaching ARS 118 billion (constant value CAGR of 2% over the forecast period).

Tea sales saw growth in total retail volume terms in 2022; resulting from the increasingly positive perception of tea as a healthy option. Argentinian consumers have always been very health conscious, but the outbreak of Covid-19 increased this, with consumers discussing and looking for ways to boost their immune systems. Greater interest has been given to specific functional benefits offered by different tea varieties, particularly those claiming to strengthen the immune system or provide a calming effect. Thus, green tea and herbal/fruit tea have seen strong growth, driven by their functional fortified options.

Argentina has a more robust tea production than that of coffee. According to Argentinian Mitre Y Elcampo business paper, tea production is in the southernmost part of Argentina, located between 26° and 28° South latitude, there are about 6,800 producers with an area of 40,500 hectares. About 94 percent of them are located in the province of Misiones, and the remaining 6 percent are in Corrientes. A characteristic of Argentine tea is its high concentration of polyphenols.

Approximately 90 percent of Argentine tea production is destined for foreign markets and its volume represents almost 2 percent of world consumption. The main destination is the United States, with 70 percent of the production. Currently, Argentina is the main exporter of tea to the United States of America. Other important destinations are Chile, Poland, Russia, Germany; followed by the United Kingdom, India, Malaysia and 30 other countries

The annual volume of tea exports from Argentina are varied in range of 70,000-75,000 tonnes mostly black tea for about USD $75 – $83 million in value terms. Nearly 64 percent of the cultivated area is certified with the RAS Standard (Sustainable Agriculture Network, triple impact).

Tea consumption in Argentina has been steadily growing with the biggest demand being observed in case of gourmet tea. This has even stimulated the development of tea tourism in the region, with the province of Misiones, which is located in the northeastern corner of the country in the Mesopotamia region, at forefront of this.

• Eugene Gerden is an international freelance writer, who specialises in covering the global coffee, tea and agricultural industries. He worked for several industry titles and may be reached at gerden.eug@gmail.com.

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The past few years have seen a steady rise in global demand in the functional and wellness tea market, and as consumers’ quest for health and vitality continues, market players expect this trend to kick into full gear.

The Covid-19 pandemic has become the biggest game-changer in the global market of functional drinks, according to analysts. “Following the Covid-19 pandemic, consumers face increased burnout due to a lack of separation between work and personal lives, leading to increased stress,” said Nathanael Lim, insights manager at Euromonitor International, a global market research firm. “At the same time, the pandemic has caused consumers to be more health conscious, looking after their own physical and mental wellbeing. This provides tea players an opportunity to launch functional ingredients in their tea products, appealing to consumer needs.”

According to the Whole Foods 2022 Trends predictions, functional drinks sales will continue to soar, doubling in the next decade. The analysts explained that consumers, especially those from Gen Z, are looking for healthier options than the traditional sodas their parents grew up on, and many are also interested in sober living.

Functional beverages include ingredients such as herbs, mushrooms, electrolytes, vitamins, minerals and probiotics. Some elements, like vitamins, consistently enjoy strong popularity, while others only start unravelling their potential.

In 2022, the retail value sales of immune support tea globally account for USD $2.7 billion globally. This is set to grow by 4 percent year on year, reaching USD $3.2 billion in 2027, Lim said. In Europe, retail value sales of immune support tea account for $77 million and are set to grow by 4 percent year on year, reaching $93 million by 2027, he added.

According to Market Research Future, another global market research firm, the functional and wellness tea industry has achieved a valuation of $7.2 billion as of 2022. Their projections indicate that by 2032, the industry is expected to reach a value of $12 billion.

“The demand for natural and organic production is rising, driven by concerns over synthetic additives and chemicals. The focus on preventive healthcare is increasing, with consumers taking proactive measures to maintain their health,” Market Research Future stated.

Science as a beacon

The list of functional ingredients available on the market today is long and diverse, but as an average customer grows more knowledgeable, businesses need to keep an eye on the science to make sure their products are appreciated by customers.

“Consumers are being more careful with how they spend their money, leading them to actively seek high-value ingredients – for 60 percent, this means those ingredients that are science-backed,” said John Kelly, strategy director for beverages with Kerry, an Irish food ingredients firm. He shared that “where immune health is concerned, this rises to 78 percent, while ‘clinically proven’ is the most sought-after claim for more than 80 percent of consumers. This echoes Kerry’s own research, which has found that 79 percent of consumers research ingredients for themselves.”

It is increasingly important to be able to provide high-quality research supporting the efficacy of the ingredients in your products, Kelly continued. Consumers are becoming much more discerning about which ‘healthy’ ingredients are actually supported by science. “Our own research last year showed that 79 percent of consumers say they conduct their own research into ingredients. Formulators need to ensure functional ingredients match expectations because, in the digital era, information travels fast,” he said.

Functional tea manufacturers agree that the science behind the offered functional ingredients remains the key to winning customers’ hearts.

Image: Smith Tea

“People are looking to improve their own health and well-being through the ever-increasing choices available in an expanding market,” commented Anish R Patel, a spokesperson for the UK-based functional tea manufacturer NutraTea Ltd. “Our NutraTea blends are created using only ingredients that have known health benefits, and nothing else.

The 8.8 percent increase in herbal tea consumption up to last year demonstrates that the market is on the rise, showing how the public is becoming more health conscious. This is especially true of the relaxation and pregnancy sectors where we have seen an evidential increase in demand for our products, Patel said.

“What sets apart the ingredients in our ProActive Health portfolio is the quality and quantity of the science supporting them. For example, BC30 TM, our patented probiotic ingredient, is backed by over 25 published papers, with research showing that it can help support digestive health, immune health, and may support protein absorption. Similarly, Wellmune® is the only ingredient of its kind supported by over a dozen published, peer-reviewed clinical studies,” Kelly said.

Stress-relief & immune-boosting teas are top performers

Different market players focus on their own niches, but the general consensus is that functional tea helps mitigate stress and fortify the immune system.

Stress relief, sleep aid and immune boosting features are key trends in the functional tea market for the future, Lim pointed out.

“With the stresses of everyday life, consumers want an easy way to support their wellness goals, and the demand for wellness teas will continue to increase,” commented Niya Vatel, founder and CEO of Tea and I, who also underpins the importance of the science behind the offered products.

“Social media and technological integrations have played a pivotal role in propelling the industry forward, attracting a fresh wave of functional tea enthusiasts from a younger demographic. As a result, the market has experienced a significant boost. Influencer marketing has amplified the popularity of wellness teas beyond the detox and weight loss niche,” explained Vatel.

Covid-19 undoubtedly was the main factor driving the consumer demand in the functional beverage market. Although the pandemic is officially over, its aftermath is still present.

“The big ‘mega-trend’ is increasing consumer proactivity when it comes to health and an active interest in everyday beverages as the vehicle for benefits. This has undoubtedly been accelerated by Covid-19,” Kelly said.

One of the findings of Kerry’s most recent global consumer survey was the increased scale of the impact of the pandemic on the demand for everyday beverages with functional benefits. Teas benefit from this demand as teas have a traditional positioning as wellness beverages.

“Their benefits in areas like stress relief have been enjoyed by people for thousands of years and are supported by a wealth of science. This inherent ‘health halo’ makes tea a great fit for functional products because consumers are most likely to expect benefits in categories that are traditionally associated with health,” Kelly said.

The list of reasons why customers opt for functional drinks is long. One study by Kerry, for instance, discovered both men and women attribute beauty support as the top reason they consume beverages with high nutritional value and are willing to pay a premium even amid global inflation. Men and women are both drawn to gaining beauty support from fortified beverages.

Image: Kerry

Skin is the top concern, with 51 percent when it comes to purchasing beverages fortified with nutrients. Skin support was essential to 58 percent of women versus 44 percent of men globally, revealing a small gender gap regarding the interest in beauty support.

Immune support, adaptogenic teas, and functional herbal blends are currently the main segments in the functional tea market, according to tea and herbal supplier, Hälssen & Lyon. The German-based company stated that “consumers are seeking beverages that offer health benefits beyond hydration, making functional and wellness teas an appealing choice. As consumers look for ways to proactively manage their health, functional teas, which are attributed to various health benefits, such as immune system support or stress reduction, are in high demand. The ageing population also contributes to this but is more focused on maintaining health and vitality.”

Emerging segments

The functional tea market is also expected to evolve fast, especially as the science behind more ingredients becomes increasingly convincing.

Hälssen & Lyon, for instance, expects nootropic teas to be among the fastest-growing segments in the following years. Nootropics are substances believed to improve cognitive function and may be included in tea blends. Ingredients like ginkgo biloba, lion’s mane mushroom, and adaptogens may enhance mental clarity, focus, and memory.

In addition, the company anticipates strong demand for plant-based functional ingredients, and sustainability and regenerative agriculture will stay at the centre of public attention.

“Immune-boosting tea continues to remain relevant for consumers, especially with many unknown diseases expected in the future. With features such as vitamins and botanicals like ginger, this serves to strengthen consumer’s immune system and protect them from infections,” Lim said.

New technologies also let tea manufacturers explore new niches. Probiotics are a particularly exciting area, partly because of the growing awareness of their benefits but also because the emergence of spore-forming strains has created opportunities for tea manufacturers to create innovative new functional products, Kelly said.

Market Research Future reported that a collaboration between functional tea manufacturers, ingredient suppliers and retailers foster innovation and market expansion, noting these collaborations enable knowledge sharing, distribution network enhancement and the development of new product lines, ultimately benefiting both industry participants and consumers.

• Vladislav Vorotnikov is a Batumi, Georgia-based multimedia B2B freelance journalist writing about the tea and coffee industry since 2012.

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With corporations beginning to grasp that sustainability and corporate social responsibility (CSR) are important to customers and for the long term future of businesses, company claims of achievements and action plans are everywhere, alongside, of course, accusations of greenwashing. Which is why it is increasingly important for businesses to have certifications against their claims, to enlist consumer and stakeholder trust. Whether it be Fairtrade, Rainforest Alliance, organic, B Corp, non-GMO or vegan, consumers and company partners are looking for the certification labels, especially within the tea and coffee industry.

Certifications are notably prolific in the tea and coffee value chains. With 17 percent of tea, globally, certified Fairtrade, organic or Rainforest Alliance, and 25 percent of global coffee certified by these or similar schemes, according to Ethical Consumer (ethicalconsumer.org). This may be due to the fact that many tea- and coffee-producing areas are in developing countries, as well as the way in which both products are marketed to consumers; the origin of the tea and coffee is often one of its main selling points and helps the consumers build a narrative of the product before deciding to make the purchase. By instilling this focus and painting a picture of where the tea or coffee grew and was farmed, it is natural for consumers to want to imagine it with fair working conditions, nature friendly processes and beneficial to its local area, socially and environmentally. Amanda Archila, executive director, Fairtrade America, explained, “Coffee and tea are two critical commodities for Fairtrade. Globally in 2021, Fairtrade worked with 872,916 coffee farmers, and 400,402 tea farmers and workers. Premiums earned across coffee and tea amounted to over USD $102 million. We partner with traders, roasters, brands, and retailers around the world to ensure Fairtrade is easily accessible to consumers.”

As one of the biggest players in the tea and coffee certification field, Fairtrade as an organisation facilitates equitable and sustainable trading for producers in developing countries, working with co-operatives, businesses and governments. It does this by enforcing a Fairtrade Minimum Price for when the market price drops, as a safety net for producers, as well as an additional fixed Premium payment to be paid on top of the market price, to be invested in producers’ local communities.

It is an organisation and certification that is seeing a lot of growth; “The number of certified tea farmers in the Fairtrade system has been gradually increasing over the past few years: up to 347,000 in 2021 compared with 319,500 in 2019, in diverse origins,” commented Amy Collis, senior sustainable sourcing manager, Fairtrade Foundation.

Archila added that recognition among consumers has also increased: “Since 2019, recognition of the Fairtrade label has jumped by 118 percent among US shoppers,” demonstrating the building consumer interest in certified products. Archila continued, “Gen-Z shoppers showed the highest increase in recognition of the Fairtrade label among all age groups: 18-24 year olds who recognised the mark jumped by 121 percent, from 33 percent in 2021 to 73 percent in 2023. And millennial shoppers (25-34) are the most frequent purchasers of Fairtrade products.”

Archila agreed that “in the broader world of sustainability products, consumer awareness is definitely in the mainstream. Eighty-six percent of shoppers recalled seeing a sustainability or ethical label on a product while shopping. We also see this consumer connection to sustainable and ethical products growing stronger in the future.”

While the Fairtrade certification is seeing growth worldwide, Collis explained that the UK is currently the biggest market for Fairtrade tea, holding a share of 62 percent of Fairtrade tea sold globally. Collis said this was due to strong commitments from retail partners, “with Marks & Spencer, Waitrose and Co-op all having a 100 percent Fairtrade commitment on tea and coffee.”

Image: Kloth & Köhnken

Duncan Gray, head roaster and managing director, Bay Coffee Roasters, a west Wales, UK -based roastery, explained why the Fairtrade certification is important to his company: “Fairtrade is often far more than paying a good price to the farmer and also their workers, many of the Fairtrade cooperatives that we have worked with have community initiatives providing training and education for the families, health care and often other improvements to the local area.”

Consumers embrace organic

Bay Coffee Roasters’ other major certification that it champions, is organic, which often goes hand in hand with Fairtrade, with “over 50 percent of Fairtrade farmers [choosing] to go organic: tea, coffee, chocolate, bananas and cotton are among the products carrying dual Fairtrade and organic certification,” said Collis, as they both call for sustainable farming practices. “The nature of organic farming where farmers cannot rely on chemicals means that they generally have to care for their land, respecting its bio diversity and farming in a more sustainable way. Organic certification means that the farmers have to keep to their word,” said Gray. With organic farming, the emphasis is on techniques such as crop rotation, biological crop protection, green manuring and composting, and different regions have their own organic certifications, such as the EU and USDA Organic.

As discussed in ‘The Balance of Organic’ feature in the Tea & Coffee Trade Journal October 2023 issue, the organic market is seeing growth, with the tea market holding a value of USD $1.24 billion as of 2023, with a CAGR of 8 percent through 2033, while the organic coffee market estimates are even higher with a CAGR of 12.5 percent until 2028, according to market research companies FMI and Mordor Intelligence. Organic products are not only perceived as better for the environment and for the producers by the consumer, but they are also believed to be healthier, with less chemicals needed to grow and process them.

Gray added that they even have some customers who will buy only organic coffee, and whether that be for sustainability, ethical or health reasons, it is clear it is something that is important to many customers, or at a minimum regarded highly and as a bonus to their purchases.

Organic tea is something that it is ingrained in Kloth & Köhnken’s (K&K) identity, explained Sandra Nikolei, tea department/corporate social responsibility at K&K; “Organic farming can result in a better taste of a product as the plant grows slowly compared to most conventional products.”

Nikolei added that they are seeing much interest from their customers for organic products, but also for Rainforest Alliance-certified products. Rainforest Alliance, an even bigger scheme than Fairtrade and which now includes the UTZ label, is another non-profit organisation that promotes responsible business practices and strives to improve producer livelihoods and communities, especially in the face of the climate crisis. It does not do this with fixed pricing structures, but rather through policing production.

Image: Rainforest Alliance

“As we approach 2030 – a year experts mark as the potential point of no return – we must respond with unparalleled speed and scale to shift the course of sustainability transformation,” said Rainforest Alliance CEO, Santiago Gowland, “The hard truth is that the old sustainability models are good but not good enough.” The Rainforest Alliance certification has been going for 35 years, and, as of December 2022, has since achieved sustainability projects and certified farmers in 58 countries, worked with over 6,000 companies, and made Rainforest Alliance certified products available in 190 countries.

B Corp on the rise

Another major certification that is rising to the forefront of the tea and coffee industry, indeed most consumer industries as a whole, is B Corp. For a company to achieve B Corp certification, it must be verified by the ‘B Lab’ organisation, to “meet high standards of social and environmental performance, transparency and accountability,” B Lab explained. There are B Labs across the world, including UK Australia, East Africa, Europe, and North and South America, with 6,800 B Corp certified companies across 89 countries and 161 industries.

Duncan Gray that becoming a B-Corp is next on Bay Coffee’s agenda to achieve, joining the many tea and coffee companies certified as B Corps, such as Nespresso, Pact Coffee, English Tea Shop, Bigelow, and Pukka Herbs to name a few.

The cost of certifications

Many companies, including Bay Coffee and K&K, hold multiple certifications, particularly if they have a strong international presence as different certifications are more popular in different regions. K&K for one, lists Fairtrade, Fair Trade USA, Bio EU (organic), Bio Suisse organic, USDA Organic, Rainforest Alliance, FairBioTea, and kosher, among theirs.

Different certifications cover different areas and demand different requirements from companies, so perhaps the more the better, it could be argued. There is such a variety of certifications available, many much smaller than the ones listed here, and it comes down to a company’s specific operational practices, locations, and community needs as to what certifications will have the largest impact on its environmental and social undertakings. However, it is the big names such as Fairtrade, Rainforest Alliance, organic, and B Corp that seem to be major drivers of consumer and customer interest and purchases.

Image: Bay Coffee Roasters

But there are also a lot of conversations around certifications in relation to pricing and verification. Consumers realise that they will likely pay more for certified products than they do for those without certifications. “For a pound bag of coffee, shoppers said they were willing to pay a price premium of up to 35 percent more for certified coffee over uncertified. Nearly four in five consumers said they were willing to pay more for a product to ensure that producers received a fair price,” explained Archila.

While it is understandable that there must be additional costs to ensure the producer is receiving a fair price, it does mean the more price sensitive consumer may struggle to choose the ethical option when making their purchasing decisions. This allows the mass produced and possibly unethically sourced tea and coffee companies to keep a sizeable share of the market. Collis detailed that “Fairtrade-certified organisations sell only around 4 percent of their tea on Fairtrade terms – this means they don’t benefit from being certified to the extent that they could. When shoppers choose Fairtrade tea, tea producers can sell more of their product on Fairtrade terms.”

So, while there is growing demand for certified products, and a certain amount of consumer willingness to pay extra for them, there may not be enough for producers to justify the additional expense if it is not being bought from them at the certified price.

Certifications are costly for the producer as well as sometimes for the consumer. “Significant commitment is needed from producers to achieve and maintain compliance with the Fairtrade Standards: but it isn’t always feasible for producers who are facing other challenges, such as rising costs of inputs, low market prices and the effects of climate change,” said Collis. Likewise with organic, there is a conversion phase where anything grown cannot be sold under the organic title with the benefits that come with it, until the transition is complete, and no compensation is offered for the expense or yield loss.

K&K is proud of its certifications and recognises their value, but also their limitations; “Certifications are necessary to help to make the world a better place. But often they are too cost intensive and too difficult to implement, for farmers, small businesses and for start-ups. They should be less complicated and should focus on an easy way to make changes. Imposing the same requirements on everyone in this world and origin is, from our point of view, unfortunately very European and unidimensional. It should be more individually adaptable. Many certificates are too bureaucratic and rigid,” explained Nikolei.

Therefore, while they are an important mark of credibility and of good intentions to inform consumers, having certifications is not the only nor final step to sustainability and ethical business practices. “Certification can only ever form part of a company’s sustainability efforts,” articulated Collis, they do not “replace the duties of state or business actors with respect to human rights or sustainability.”

• Kathryn Brand is an associate editor on T&CTJ, while still writing for several of Bell’s other magazines. She joined Bell Publishing as an editorial assistant at the beginning of 2022 after graduating from the University of East Anglia with a degree in English Literature and Creative Writing. She may be reached at: kathryn@bellpublishing.com.

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Uganda is the largest coffee exporter in Africa and the eighth largest exporter of coffee by volume in the world, yet when it comes to coffee-producing countries in Africa, Uganda is not the first one to come to mind. But the ‘Pearl of Africa’ is working diligently to change that. 

Uganda is focusing on doubling its total agricultural exports from USD $6.629 billion to USD $12 billion by 2027. Odrek Rwabwogo, chairman of the Presidential Advisory Committee on Exports and Industrial Development (PACEID), in a presentation to an international group of journalists on a government-sponsored media tour of Uganda earlier this year, said that coffee is a top target for growth. PACEID advises President Yoweri Museveni on ways to improve and increase Uganda’s export potential in a variety of sectors. 

Historically, Uganda coffee has been used for blending and not identified, but the country wants to change that by improving quality. Within coffee, Uganda’s current exports are around $627 million annually, with the goal in five years being $1.5 billion — a 28 percent increase. Rwabwogo said that further goals include growing annual coffee production from approximately seven million bags to 20 million bags by 2030.

Currently, Uganda’s major coffee export is robusta. In August, its exports rose by 48.4 percent to 0.74 million bags from 0.5 million bags in August 2022, per the International Coffee Organization. This represents the second largest monthly exports on record, just behind the 0.79 million bags exported in March 1973. Although robusta is the largest export, Ugandan officials believe there is opportunity in premium coffee (arabica), roasted coffee and soluble/instant coffee. 

Uganda’s Ministry of Agriculture, Animal Industry and Fisheries has stated that coffee is a “strategic commodity in the agro-industrialisation programme under the National Development Plan III (NDP III)’. It has been prioritised for the country’s march towards middle-income status and poverty eradication programme.” The Ministry reported that coffee provides the needed foreign exchange and is a source of income for 1.8 million households in the country that are involved in its cultivation. 

The Uganda Coffee Development Authority (UCDA), which was established in 1991, monitors and regulates the country’s coffee industry, and advises the Ugandan government on policy issues. In addition to having the responsibility of increasing quality coffee production and productivity, the UCDA is also charged with growing domestic coffee consumption. Given that coffee has been identified as the leading commodity for growth, the UCDA has devised an aggressive roadmap –it includes nine initiatives (see chart below) – to elevate Uganda’s reputation in coffee and transform its coffee sector to achieve the stated growth goals. UCDA managing director, Dr Iyamulemye Emmanuel, said that the government is undertaking a number of measures to ensure that farmers are producing coffee that meets international market standards and requirements. He noted that Uganda is looking to export to emerging markets as well as developed markets. 

Challenges to achieving growth 

The goal to raise Uganda’s coffee reputation on the global stage is ambitious and the impediments to growth in most agricultural sectors are vast: overcoming long-held stereotypes, perceived low quality because of low-standard inputs (seeds, pesticides, chemicals, banned substances still being used, etc), lack of investment, no economies of scale, minimal understanding and sharing of information relating to regulations, weak cooperatives, high transportation costs (handling fees, limited infrastructure when receiving), and most commodities go to the low end of the market and take cost-cutting measure. 

Within coffee, the biggest challenges – aside from the average age of a coffee farmer being 63 – are the lack of branding (coffee is rarely identified as being from Uganda versus origins that are highlighted such as Ethiopia, Kenya, Colombia, Brazil, etc), changing the mindset of the producers who view coffee as just a cash crop (most producers don’t even sample their own coffee), and the perception of the global coffee industry, which views Ugandan coffee overall as low quality — but the potential is there. 

Mountain Harvest, an exporter, producer and provider of farmer services based in Mbale, aims to ‘challenge the status quo of coffee production in Uganda for the sake of smallholder farmers’ as its company mission asserts. “We want to show the market that Uganda has great coffee and that we can consistently deliver it,” said managing director, Kenneth Barigye. 

Mountain Harvest produces, processes and exports organic, Fair Trade and Rainforest Alliance-certified coffee. It maintains eight processing facilities throughout Uganda, where it employs washed, natural and honey processing techniques. The Mt Elgon facilities are overseen by processing manager, Ibra Kiganda, who is also the 2023 African Fine Coffees Association barista champion. Kiganda is passionate about coffee processing and likes to experiment with anaerobic fermentation, carbonic maceration and other new techniques (using microlots grown at elevations between 1,600 and 2,200 meters above sea level). 

The majority of coffee producers in Uganda grow coffee on farms that average one acre at best, typically they are smaller. Mountain Harvest teaches producers, especially women – who do the bulk of the labour on smallholder farms in Uganda – better farming methods and techniques (such as stumping, pruning, irrigation, fertilising, using organic pesticides/weedicides, etc), and is working to change their mindsets when it comes to selling their coffee. The farmers are also taught the importance of intercropping with bananas, avocados and other trees that provide shade for the coffee as well as incremental revenue. 

Better livelihoods through better pricing 

Mountain Harvest provides micro-financing that educates producers on savings and loans, in addition to covering expenses in the off-season. The financial training builds their capacity to manage money while creating a transaction history the future lenders will require. “We are not an NGO — we do not give handouts,” asserted Barigye, noting the 2 percent interest loans the company offers to producers. “Our hope is that after three years, the farmers can go to a commercial bank that has more money.” 

The loans are ‘kick-starter financing’ for the farmers, but said Barigye, they also help build trust with the farmers so they will sell Mountain Harvest their cherries rather than process and accumulate coffee at their homes. 

Farmers receive more money for their coffee – about 20 percent more – if they sell Mountain Harvest the cherries rather than the parchment but are not always willing to do so. Company COO, Nico Herr, said that many farmers will think about when they will need money for the family (school clothes, books, etc) so they will hold onto the coffee and ‘play the market’ to see if someone else will offer them a higher price. “It is degrading the crop, but you have to consider that this is the traditional way of processing coffee in Uganda,” she explained, “we’re introducing a new way to do coffee.” 

Herr, a certified Q grader, shared that Mountain Harvest is also working to shed Uganda’s reputation for ‘fast fading’ coffees. Coffees that ‘tasted great’ on cupping tables in Mbale deteriorated during transportation oversees. They discovered that it was a warehousing issue. 

Mountain Harvest now has one of the few climate-controlled warehouses in the country and has grown over the past few years from filling three containers of coffee annually to 11. 

Recruiting youths is critical 

Instrumental to the growth of Uganda’s coffee industry is ensuring that younger generations remain interested in coffee farming and not all flee to urban areas for higher paying jobs. One factor in Uganda’s favour is that although the average age of a coffee farmer is 63, more than half the population is under the age of 18. 

“For us to have sustainable coffee production, we have to attract young people while their parents are still there to train them,” stressed Barigye. 

The government has extension programmes but it is overwhelmed so individual companies provide these services. Companies like Mountain Harvest, Endiro Coffee and Masha Coffee, with the support of the UCDA, are teaching Ugandans – both young and old – on all facets of the coffee industry: from proper farming techniques to elevate quality and improved processing and storage methods, to better record keeping, microfinancing, quality control, and how to cup, as well as training young men and women to be baristas. 

Coffee cupping at Mountain Harvest Coffee

Mountain Harvest selects the top 20 students from a local university each year to be trained in agronomy and microfinance. After six months of training and work, it offers permanent positions to the top achievers among those students. Another programme is its ‘Professional Pickers’, which hires local youth for assistance during the harvest and to do other tasks the remainder of the year. 

Ugandan officials and private sector companies realise, however, that the key to growing Uganda’s coffee industry, is through women. Women in Uganda, as in many coffee (and tea for that matter) producing countries, have not had a ‘seat at the table’. Women have long been heavily involved in the labour aspect of coffee production (picking and sorting for example) but have not had the opportunities for training and education or been involved with business transactions because of conflicting familial activities. 

Endiro Coffee and Masha Coffee are both female-owned and operated companies and work with women producers — training them in all segments of coffee production, hiring them, and of course, sourcing coffee from them. Mountain Harvest also taps women to be its team leaders (most farms are still owned by men) so they are also involved on the business side. 

“We have found that when the women handle the money, there is more for the children for clothing and school items, for food and savings,” said Millie Drijaru, head of coffee, Endiro Coffee. Both Barigye and Sylvia Achebet, executive director of Masha Coffee echo the sentiment. 

Endiro Coffee was founded in Kampala in 2012 by Gloria Katusiime as a café to provide employment opportunities to Ugandan youths. In 2014, Endiro switched from buying roasted coffee to sourcing green coffee directly from Ugandan farmers, paying them a premium for their high quality beans. It partnered with a roaster in Kampala for its blends. 

Endiro started with 50 farmers that formed the Endiro Growers Bukalasi Women’s Group, which has now grown to a network of more than 500 farmers across four growers groups throughout Uganda. Endiro offers training and support, and in return is receiving higher quality coffee and greater yields, which allows it to offer farmers better prices, thereby improving their livelihoods. Endiro Coffee, which received its B Corp certification in 2019, now operates 14 coffee shops in Uganda, one in Kenya and one in Aurora, Illinois. It plans to open its own roastery in Uganda this year. 

Kween-based Masha Coffee buys coffee cherries from a network of nearly 1,000 female-led farms –ranging in elevation from 1,800 to 2,400 meters above sea level – in the Kween, Kapchorwa and Bukwo districts. Masha sends field officers to train local farmers in best practices multiple times throughout the year. Trainers offer guidance on agronomy methods from planting seedlings to soil management to harvesting, etc, and said technical manager, Eunice Chekaptui, “how to be environmentally friendly,” – all to ensure a consistent supply, which benefits both Masha Coffee and the farmers. Masha Coffee also hires local youths to assist with production and processing in Kween. 

Endiro Coffee’s shop in Sipi Falls at Lacam Lodge

Masha Coffee has begun shipping roasted coffee to wholesale customers internationally and is exploring distribution opportunities in other countries, including the United States. The coffees Masha processes in Kween are carried in parchment to facilities in Mbale for hulling, and then to Kampala for roasting and packaging. Having to haul the coffee to so many different facilities and towns is costing Masha “time, money and security,” said Achebet, noting her dream would be “to have everything done here.” She said that having everything done in one place would reduce risks. First up would be purchasing a huller, with roasting being the final phase of the plan. 

Joining forces to meet demand 

Along with 16 other Uganda companies, Masha Coffee is a member of the Coffee Investment Consortium of Uganda (CICU), a Ugandan trade group that shares resources and connections to meet international demand. 

By collaborating to deliver higher volumes of higher quality Uganda coffee on the global market, the CICU’s mission is to attract investments specifically to cover expenses and the cost of exporting. Nelson Tugume, CEO of Inspire Africa and chairman of the CICU, said there is no export financing, no available or product-oriented credit. “Coffee is different from other commodities like bananas, from a manufacturing and housing [perspective], therefore you need a particular [type] of financing.” 

PACEID is consulting with financial groups and institutions, including lenders, equity funds, foundations and the Uganda Bankers’ Association to develop an export credit fund that will provide affordable financing for producers of coffee and other products. And while many are hopeful such a fund will be established and available soon, the CICU believes time is of the essence. “[International] buyers are saying they want to buy the coffee directly, [but are asking] ‘do you have what it takes?’,” said Tugume. He shared that Uganda needs to create a better environment for investors to bring in the financing. “In terms of production, the farmers can manage it, if you give them a better price. They can manage it at the production level, [but the difficulty] is in the market.” 

The UCDA, along with Mountain Harvest Coffee, Endiro Coffee, Masha Coffee and other CICU members firmly believe that as more companies start producing higher quality, Uganda’s profile will be elevated. “The market is going to know Uganda as an origin,” said Barigye, “and it’s going to appreciate Uganda as an origin because we have great coffees.” 

•  Vanessa L Facenda joined T&CTJ in 2012 as editor. She was previously editor of Retail Merchandiser and has written for a variety of magazines including Consumer Reports, Brandweek, Adweek, Hollywood Reporter, and Specialty Food Magazine, among many others. She may be reached at: vanessa@bellpublishing.com. 

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Convenience may be a catalyst for RTD tea sales, but the category in North America is also benefitting from continued innovation, expanding flavours and, of course, meeting consumer wellness demands for healthier options. By Shambhu Nath Jha

In 2023, the global market for ready-to-drink tea is assessed to hold a valuation of USD $34 billion, with a projected growth trajectory at a compounded annual growth rate (CAGR) of eight percent from 2023 to 2033. Rising consumer preference for convenient and on-the-go beverage options align with the hassle-free nature of ready-to-drink teas. As per global market research firm, FactMR, the market is segmented by product type (herbal, black tea, green tea, others), by sales channel (direct sales, indirect sales), and by region (North America, Europe, Latin America, South Asia and Oceania, Middle East, and Africa).

RTD tea sales in North America

In North America, the ready-to-drink tea market holds a significant portion of the total market share, amounting to 32.2 percent, and is projected to experience a CAGR of 5.6 percent. In North America, convenience and health-consciousness drive the demand, with consumers valuing portable, on-the-go options and seeking beverages with perceived wellness attributes.

Moreover, increasing awareness of health benefits associated with tea consumption, such as antioxidants and potential stress reduction, has driven health-conscious consumers towards these products. Besides this, innovations in flavours and packaging formats further attract a broader consumer base.

Ultimately, the trend towards natural and organic ingredients in beverages has led to the development of healthier ready-to-drink (RTD) tea options, appealing to a segment seeking more wholesome choices. The RTD market in North America has experienced substantial growth and continues to evolve due to other factors such as:

• Shift away from sugary beverages: Concerns about sugar consumption and its impact on health have led many consumers in North America to opt for RTD beverages as an alternative to sugary sodas and juices. Moreover, the rising rates of obesity in North America have drawn significant attention from healthcare professionals, policymakers, and the general public. Sugary beverages, including sodas and fruit juices, have been identified as a major contributor to excess sugar and calorie intake, making them a target for reduction.
• Diverse flavour profiles: North America October 2023 is a melting pot of cultures and ethnicities, and as such, it boasts a highly diverse population with varying taste preferences. People from different backgrounds have grown up with distinct flavour profiles and culinary traditions. RTD brands recognise this diversity and seek to tap into the various regional and cultural tastes prevalent in the market.
• Premiumisation is on the rise: The concept of premiumisation in the North American RTD beverage market refers to the growing trend where consumers are willing to pay a higher price for RTD options that are perceived as higher in quality, and uniqueness, and often associated with artisanal, small-batch, or organic production.

While TAZO is known for its hot tea offerings, it has also ventured into the RTD market. Image credit: Unilever

Forecast trends for North America

The evolving landscape of the RTD tea market in North America reflects consumer preferences for health, sustainability, personalisation, and diverse flavour experiences. It is important for businesses in this industry to stay attuned to these trends and adapt their strategies accordingly.

Consumers in North America are expected to seek out RTD teas that offer functional benefits, such as probiotics, adaptogens and added vitamins or minerals, to support overall health and wellness. Functional ingredients like probiotics for gut health, adaptogens for stress relief, and added vitamins or minerals for overall wellness are expected to be sought after.

Moreover, as the beverage landscape evolves, RTD teas may overlap with other categories like functional beverages, herbal tonics and wellness drinks. This trend suggests that consumers may have access to a wider range of beverage options with diverse health benefits. The boundary between traditional RTD teas and other beverage categories (functional drinks, herbal tonics, and wellness beverages) is expected to blur, leading to a greater variety of hybrid products.

RTD teas with specific health-enhancing properties, such as those promoting gut health, reducing stress or boosting immunity, are anticipated to gain popularity among consumers looking for functional and health- conscious beverage choices. Moreover, caffeine- free and low-caffeine options address the increasing demand for beverages that provide an energy boost without the stimulating effects of caffeine. RTD teas with low or no caffeine content cater to consumers seeking alternative options to high-caffeine beverages.

RTD tea companies are anticipated to introduce a wider range of unique and exotic flavours, as well as explore innovative brewing techniques and herbal infusions to cater to diverse consumer preferences. It lends into consumers’ desire for diverse and exciting taste experiences. Advancements in brewing techniques, including cold brew, nitro-infusion, and tea concentrates, are reshaping the RTD tea market by offering consumers a wider spectrum of taste experiences and product choices. These innovations cater to the evolving preferences of consumers who are seeking unique, high- quality, and customisable RTD tea options, contributing to the continued growth and diversification of the RTD tea industry.

The RTD tea market in North America, although growing, faces several challenges that industry players need to address to maintain and expand their market share. Some of the key challenges include:

• While RTD teas are often marketed as healthier alternatives to sugary soft drinks, they still face scrutiny over their sugar content, artificial additives and preservatives. Consumers are increasingly health-conscious, and brands must respond by offering low-sugar, natural ingredient options and transparent labelling.

• Environmental concerns, such as plastic waste and the carbon footprint of packaging and transportation, are critical challenges. RTD tea brands are under pressure to adopt sustainable packaging practices, reduce plastic usage, and implement eco-friendly distribution methods.
• Many consumers are not fully aware of the benefits of RTD teas, including the potential health benefits associated with certain types of teas (eg, green tea) and functional ingredients (eg, antioxidants). Brands must invest in consumer education to highlight the value and nutritional advantages of their products

Starbucks’ Teavana Craft Iced Tea line focuses on high- quality, handcrafted tea beverages. Image credit: Starbucks

An intensely competitive market

The RTD tea market in North America is characterised by intense competition among a diverse range of players. Established beverage giants, as well as smaller regional companies, vie for market share in this segment. Key companies in the market are Danone, Harney & Sons Fine Teas, Nestlé SA, Snapple Beverage Corp, Starbucks Corporation, Beam Suntory, Inc, Tata Consumer Products Ltd, The Coca-Cola Company, The Republic of Tea, and Unilever Plc.

• Key players often focus on product innovation and diversification, introducing new flavours, formulations, and packaging to cater to evolving consumer preferences. Moreover, new flavours and formulations cater to diverse consumer tastes, ensuring that the product portfolio remains fresh and appealing. Innovative packaging not only enhances product shelf appeal but also improves convenience, such as resealable bottles or eco-friendly packaging options.
• Competitors in the market focus on marketing strategies that include social media engagement, celebrity endorsements, and health-focused campaigns to differentiate brands and attract a wider audience. Given the growing consumer interest in health and wellness, many RTD tea brands emphasise the health benefits of their products through advertising campaigns. This includes highlighting ingredients like antioxidants, vitamins, and natural ingredients that promote well-being.
• Distribution networks also play a pivotal role, with companies leveraging both traditional retail channels and e-commerce platforms to ensure widespread availability. The rise of e-commerce has revolutionised the way consumers purchase beverages. Many RTD tea brands establish an online presence through their websites or partner with online retailers to provide easy access to their products. This is especially important for reaching consumers who prefer shopping online or those in areas with limited physical retail access.

Some examples of the leading brands in the North American market:

• Pure Leaf, owned by PepsiCo: offers a wide range of RTD tea products. It continuously introduces new flavours and blends, such as its Pure Leaf Herbal Iced Tea Collection, featuring unique herbal infusions like hibiscus, chamomile and peppermint.

• Teavana Craft Iced Tea (Starbucks): Starbucks’ Teavana Craft Iced Tea line focuses on high-quality, handcrafted tea beverages. It has introduced unique and innovative flavours, including Teavana Craft Iced Tea Pineapple Berry Blue Herbal Tea.
• Tradewinds (NestléWaters): Tradewinds, a brand under Nestlé Waters, specialises in specialty RTD teas. It has introduced unique flavour combinations like Tradewinds Slow Brewed Iced Tea with Honey and Ginseng.
• TAZO (Unilever): While TAZO is known for its hot tea offerings, it has also ventured into the RTD market. Its bottled TAZO Tea Latte range offers consumers a unique and convenient way to enjoy specialty tea beverages.

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The International Coffee Organization (ICO) reported that world coffee consumption increased by 4.2 percent to 175.6 million bags (60kg) in c offee year 2021/22 and by a further 1.7 percent to 178.3 million bags in 2022/23.

This increase in consumption, the ICO noted, is expected to trigger another year of deficit in the world market with an estimated shortfall of 7.3 million bags in coffee year 2022/23.

According to the ICO, Africa and Asia and Oceania’s consumption would expand by the most, increasing by 4.1 percent and 3.1 percent to 13.4 million bags and 44.2 million bags respectively. The two regions’ shares of world coffee consumption would, as a result, grow to 7.5 percent and 24.7 percent, respectively.

As consumption grows, coffee producers are endeavouring to sustain or improve the flavour of their coffee, especially during the post-harvest processing phase to satisfy the taste and volume demand of consumers. One of the trends that has recently gained traction among coffee producers is co-fermentation of coffee.

Image: Lucia Solis

What is Coffee Co-Fermentation?

US-based green coffee company, Ally Coffee, which connects roasters with specialty coffees sourced through sustainable partnerships, said these co-fermented coffees “offer distinct cup profiles defined greatly by added flavour agents in the fermentation process, imparting difficult-if-not-impossible to achieve flavours to the coffee.”

Ally Coffee, through its Ally Open, a platform for roasters to purchase a curated selection of mall-box specialty green coffee, said some of the coffee producers complete the processing of their crop with little-to-no additives leaving the fermentation process to the naturally occurring microbes and sugars from the coffee cherries.

However, there are others who “have adopted the use of extra ingredients during processing to achieve a number of results including batch consistency, labour efficiency, and differentiated flavour profiles.”

Co-fermentation, explained Joseph Rivera, senior research scientist at Ireland-based public food company, Kerry Group, is an emerging trend that could give coffee farmers control over their coffee fermentation “by intentionally infusing commercially available yeasts, such as Saccharomyces cerevisiae, commonly used in wine and baking to allow a more uniform colonisation of microbes in their tanks.”

Moreover, there is an increasing interest in co-fermenting coffee with fruits and spices such as orange peels, peaches, pineapples, cinnamon, and hops, among other additives.

“The addition of these non-coffee products alters the natural biome in the fermentation tank, introducing new flavours compounds such as terpenes, oils, ester, to ultimately create more complex flavours than traditional coffee fermentations,” added Rivera.

The putting of additives in the fermentation tank/bag, stated Vietnam’s processing and export firm, Helena Coffee, “will help control fermentation by providing sugar for existing microorganisms.” Furthermore, “it also enriches the microflora of the solution or changes its pH and thus regulates the type of microorganisms that will be active during the fermentation process,” Helena stated in a blog.

The co-fermentation process begins soon after harvesting of the coffee with farmers utilising either the washed or dry post-harvest process.

In the washed coffee, the coffee cherry is mechanically de-pulped thus removing the outer layer of skin or exocarp and exposes the encased coffee bean. The encasing of a thin sticky layer of mucilage must be removed to release the bean or endosperm locked inside the cherry.

The conventional method of removing the mucilage is placing the de-pulped coffee into a tank of water and allowing it to sit for 8-24 hours and in some extreme cases, up to 72 hours, explained Rivera. “Due to the presence of yeasts and bacteria naturally found on the surface of the cherry, the tank becomes inoculated whereby microbes begin to consume the sugar in the solution to create a wide host of acids, aldehydes and esters, hence driving the pH of the surrounding solution down and, along with the
pectinases, help dissolve the sticky mucilage off de-pulped coffee.”

Co-Fermented Coffee Challenges

The potential of allergens in co-fermented coffee has dominated discussion within the coffee industry, with some stakeholders suggesting more transparency when it comes to labelling co-fermented coffee.

“For the most part, co-fermenting does not introduce allergens into the fermentation stage,” said Rivera, “however, there have been reports of farmers experimenting with co-fermenting with ‘milk’ (here I’m broadly speaking of cow’s milk, but can also include almond, coconut, soy).”

There is a possibility, he added, of the non- coffee additives introducing allergens, although these novel fermentations have generally been confined to small scale research and development experiments.

Even if there were allergens, such as lactose and nut proteins present in the coffee, “we need to remember that coffee is roasted to ~200-250°C (~392- 482° F) during roasting, which effectively provides a potent ‘kill-step’ thereby rendering any, if not all, of any allergens inactive,” Rivera reminded.

The lack of consensus on allergens in co-fermented coffee is an indicator of existing concerns within the coffee industry that need to be addressed to ensure the safety of coffee
consumers.

Elsewhere, there exists a vacuum when it comes to approved standards on the labelling of co-fermented coffee that makes achieving transparency more challenging. But even then, some in the coffee sector are pushing for a little more clarity on all ingredients in co-fermented coffee.

“The Specialty Coffee Association (SCA), a non- legal organisation, has stated that co-fermented coffees will not be allowed in the barista competitions and must be clearly labelled if a non-coffee product has been added,” Riviera shared. He cited the most recent World Barista Competition rules and regulations which rule out coffee having any “additives, flavourings, colourings, perfumes, aromatic substances, liquids, powders, etc, of any kind added at any point between the time the coffee is picked (as cherry) to when it is extracted into beverage.”

Rivera said that these are just recommendations for now, but “we could see a push to legally define
labelling requirements and standards of identity for these emerging novel coffees in the future.”

However, the position by many coffee roasters further down the supply chain is that co-fermented coffees “should be clearly labelled if any non-coffee additives have been added for both safety and transparency.”

For example, the National Coffee Association of the United States said that due to the various
formulations, flavours, and preparation methods, coffee has become more complex, making labelling
“very complicated.” In many consuming markets, including the US, failure to label coffee properly “can lead to recalls that can impact your bottom line, your brand – and even pose a threat to your
customers.”

With global coffee consumption growing, more coffee producers, roasters and even foodservice
providers are expected to be more innovative in improving the flavours of the coffee cup with
co-fermentation probably becoming a major feature in post-harvest processes but more likely in a more regularised environment.

• Shem Oirere is a freelance business journalist based in Nairobi, Kenya. He has spent more than 25 years covering various sectors of Africa’s economy including the region’s agribusiness. He holds BA in InternationalRelations and Diplomacy from the University of South Africa and earned a higher degree in journalism from the London School of Journalism and is also a member of the Association of Business Executives (ABE).

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While organic tea and coffee has been readily available on the market for some time, the category has seen, and is expected to see, continued growth as more consumers opt for products, they believe to be more sustainable and even healthier for them, and producers seek to improve their sustainability credentials and market positioning.

Nandini Roy Choudhury, client partner of food & beverages at global market research firm, Future Market Insights, writes in a report that the organic tea market holds a value of USD $1.24 billion in 2023, and is expected to reach a value of USD $2.69 billion by 2033, at a CAGR of 8 percent during the forecast period. Meanwhile, the organic coffee market has a projected CAGR even higher, at 12.5 cent for the forecast period 2023 to 2028, according to a report by Mordor Intelligence.

Consumer interest in organic tea and coffee has been gaining especial traction since the pandemic, when wellness became a priority, and organic is often believed to be a cleaner and healthier option over regular products, due to the lack of chemical fertilisers and pesticides. The sustainability benefits are also undeniable and consumers are seeking to make more mindful and conscious purchasing decision. Meanwhile, producers are heeding to this consumer pressure, and wanting to offer tangible sustainability claims to differentiate themselves from their competitors, and perhaps even justify a higher price point of their product.

Image: Equator Coffee

In terms of consumer demand and purchasing of organic tea and coffee, the geographical distribution is similar, with Europe dominating, particularly Germany, France, and the UK, according to FMI, and North America seeing similar figures in both organic tea and coffee. In organic tea specifically, parts of Asia, including China, are witnessing significant growth in consumption, said a spokesperson from Hälssen & Lyon. Whereas in organic coffee, global insights firm, Mordor Intelligence revealed Latin America is seeing the fastest growth.

Notably, the biggest producers of organic tea are similar to the biggest global producers of tea in general, countries such as China and India, however, the case is not the same for organic coffee. Samuel Klein, green coffee buyer, Partners Coffee, explained that, while Brazil produces a third of the world’s coffee, “Only a handful of Brazilian exporters are offering certified organic coffees.”

Ted Stachura, director of coffees, Equator Coffees, concurs; “Although there is some organic coffee cultivation in Brazil, Vietnam, and Colombia, the world’s largest coffee-producing countries are not typically associated with organic production.” This is largely due to growers in such countries producing coffee on a mass scale, and the farming methods necessary to do so. Smallholder farms using semi-forested coffee cultivation, are often organic by default, in countries such as Ethiopia, Peru and Mexico, said Stachura, as well as Honduras, Guatemala, Rwanda, Burundi, and Uganda, added Klein.

Organic farming is broader and more thorough than a lot of consumers realise; it is about more than just limiting or eliminating chemical fertilisers, herbicides and pesticides. “Consumers who support organic farming practices are voting to not support the petrochemical industry. Producing chemical-based fertiliser has a negative environmental impact,” detailed Stachura. “Shipping these fertilisers internationally, as coffee producing countries typically do not produce this kind of fertiliser, incurs added environmental costs. Handling chemicals poses potential health risks to farmers and, in situations where producers lack training, application of too much fertilisation may result in runoff of these chemicals making its way to water sources.” The soil itself benefits from the lack of chemicals in the long term, increasing its biodiversity, structure, fertility, and resilience to environmental influences, leading to healthier eco systems.

“Organic farming also has the potential to sequester carbon dioxide in the soil,” noted Hälssen & Lyon’s spokesperson, “This can contribute to mitigating climate change by reducing greenhouse gas emissions.”

Organic’s financial & health benefits

Choudhury stated that consumption of organic beverages can help to support farmers on a smaller scale, in addition, “Sales of organic tea are projected to have a higher price realisation thereby improving the socio-economic situation of tea producers.” The organic certification encourages and even necessitates fairer, safer and more equitable trading for the producer that supports the tea or coffee growing community.

Further, there are evolving beliefs, especially among consumers, that the lack of chemical agents in the process results in a healthier product. “The reduction in chemical residues in organic food may result on long-term health benefits by lowering the potential risks associated with pesticide exposure,” explained Hälssen & Lyon’s spokesperson.

Image: Partners Coffee

The health claims for organic produce are still evolving, especially within the tea segment, with Choudhury stating that “compared to traditional black tea, organically cultivated tea contains more catechins such as epicatechin gallate, epigallocatechin gallate, and epicatechin.”

Roadblocks to organic production

So, if there are all these benefits to the environment, to the producer, the consumer, then why aren’t more tea and coffee companies producing organic? As with such things, the reason is multifaceted. Broadly, it is more expensive, both for the producer and consequently the consumer. The requirements and inspections for the certification are demanding, and costly, and it is by no means a quick or simple switch.

Partners Coffee’s Klein explained, “It begins with a multiyear period where no prohibited fertilisers, fungicides, or pesticides may be used. During that time the farm must develop and implement a documented plan to fertilise and treat the plants with organic inputs.” Throughout this conversion phase, any coffee (or tea) that is grown and produced must still be sold without the organic title, as the transition is not fully complete, with no compensation for the expense of the process or of lost yields.

Spencer Turer, vice president, Coffee Enterprises, added, “when organically grown coffees are not able receive the premium prices for the certification and are sold as non-organic coffee due to quality issues or reduced demand, the expense of producing the organic certified coffee is changed from an actual return on investment ratio to an outright business expense for meeting the social, environmental, and ethical standards of the producer.”

Lower yields are a common side effect of organic farming, especially in the short term, “as organic practices may not provide the same level of nutrient supply or pest control,” said the spokesperson from Hälssen & Lyon, resulting in additional unit costs of production. However, she also suggested that there have been successes where organic sections of farms have outperformed conventional sections, four-to-one, because the soil was more nutrient-rich and microbiologically diverse. But this is a long-term result that doesn’t offer immediate help to farmers in the short-term making the switch.

The added expense of the initial reduced yield is only the beginning, revealed Klein, “After coffee is picked there are strict handling requirements at virtually every stage of production. Different milling and eventually roasting equipment, or costly purge batches, must be used, followed by meticulous cleaning practices. Coffee must be carefully separated and documented with every movement, then production records must be audited frequently to identify accidental contaminations.

“The outcome of all of this is that, in most situations, producing an organic-certified coffee requires more labour and greater expenses while introducing new risk in terms of yields and pest management.”

The higher risk and expense for the producers, translate to higher prices for the consumer, which serve as a barrier for many, especially the price conscientious, and especially when inflation and the cost of living is soaring in many parts of the world.

“Many consumers and businesses demanding certified organic coffees expect them to be price competitive with the cheapest conventional coffees, which is unrealistic. I think for some customers it’s easy to justify a higher price because the value add is more obvious, but unfortunately, I think it means the quality of organic coffees on the market generally tend to be lower to compensate for price sensitive customers,” argued Klein.

Image: Equator Coffee

However, despite organic teas and coffees generally having a higher price point, they are both growing markets with burgeoning consumer interest. Even if consumers do not fully understand the complexities of the organic certification undertaking, they know it is better environmentally, often in quality, and possibly for their health too, so they know there is additional benefits that they are paying that bit extra for. In Turer’s judgement, “the price barrier [only] exists when the quality of the organically certified coffee, specifically the flavour, does not meet the value expectations of the consumer.” In other words, if a consumer purchases organic coffee or tea, and they experience good quality and taste, as well as the moral and environmental associations, then there is value for the money.

Do the benefits outweigh the challenges?

It could be argued that governing bodies ought to be doing more to support organic farming, to take some of the risk and cost off of producers and subsidise the products for consumers. Stachura believes that “governments in affluent coffee-consuming nations have the capacity to play a significant role in supporting and advancing regenerative organic farming practices,” and, perhaps, have the responsibility to do so if their country is the big consumer of that product in particular.

Klein feels, however, the argument that “economic stability and mobility for smallholder farmers is more urgent. I would like to see the two things promoted and supported in tandem.” He continued, “If organic production can support and increase farmers’ livelihoods, it’s absolutely a win. But if it reinforces an exploitative price structure, or expects farmers to bear unsustainable levels of risk, I think that’s a problem that needs to be confronted.”

While there is no doubt that organic farming is beneficial in so many ways, there must be support and incentives for tea and coffee farmers to make that switch for it to be viable to more than just the larger, commercial producers. But there are ways in which this can be mitigated. “Collaboration and innovation in the entire supply chain is key for helping to make organic tea more accessible and affordable for everyone involved,” explained the spokesperson from Hälssen & Lyon.

Not only can farms share knowledge and best practices, but share the costs of certification, particularly for smaller coffee or tea producers, among nearby farms. Klein also added that this challenge presents the opportunity for agricultural innovations. “People [are] learning new techniques of soil management or crop diversification specific to their farms which can improve yields with no or few synthetic inputs. If that innovation continues and expands, we might see significant improvements in the quality of organically produced coffees.”

There may still be challenges for organic farming, but they are seemingly worth confronting as the market reports demonstrate there is clear consumer demand for organic tea and coffee. Consumers may even be willing to pay that bit more for the certified products as it allows them to have a small part of environmental agency and responsibility over the way in which the products they buy are grown and produced. Stachura concluded, “As the world’s population grows, and the demand for food, including coffee, embracing organic and regenerative farming practices becomes imperative for human survival.” Therefore, we must continue to look for ways in which it can be remunerative, accessible, and equitable.

• Kathryn Brand is an associate editor on T&CTJ, while still writing for several of Bell’s other magazines. She joined Bell Publishing as an editorial assistant at the beginning of 2022 after graduating from the University of East Anglia with a degree in English Literature and Creative Writing. She may be reached at: kathryn@bellpublishing.com.

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Production changes

Over the last three months there have not been many changes to production, but significant changes to demand. Rabobank estimates coffee production at 163.7m bags in 2022/23 and at 172.6m bags in 2023/24. The global deficit in 2022/23 is now estimated at -5.7m bags (a reduction of 0.7m bags, mainly due to demand dropping more than production), while a neutral balance is projected for 2023/24, with a surplus in arabicas and a deficit in robustas.

Global coffee balance. Image: Rabobank

Brazil’s export pace has been accelerating, especially in conillons. While green arabica exports were expected to go up in August given that the early harvest was ready to be exported, the strength of green conillon exports was probably more surprising to the market: July exports were up +109 percent vs June, and preliminary August exports remained strong. In our view, this was to be expected given two consecutive large conillon crops and the increased domestic availability of arabicas in the current harvest. The current local arbitrage in Brazil simply does not incentivise maximising the conillon share of demand going forward, freeing up more conillon for the international market. It is a delicate time to make output predictions in Brazil for next year, but an increase in production is expected.

We also expect some production recovery in Colombia 2023/24, but it will probably be gradual. Cost of production has been increasing and farmers are getting half of what they were receiving a year ago (in COP). The weather in 2023 has improved but it has not been ideal, leading to an initial estimate of 12.5m bags in 2023/24 (following around 10.5m bags in 2022/23). Honduran coffee sales are 14 percent higher so far this season YoY, which means that even our previously optimistic prediction of a 10 percent increase in production in the last harvest (2022/23) is proving to be falling short, and we are increasing our estimate slightly. Exports from other countries in Central America are significantly less optimistic. It is very early to make predictions for Central America in 2023/24, but the end of La Niña is usually favourable.

Image: Vanessa L Facenda

The robusta rally was quashed by the collapse in arabica prices since June. However, there are still concerns about the availability of robusta. El Niño-related dryness is becoming more frequent in parts of Southeast Asia, including some areas of Indonesia and Vietnam, Laos, much of Thailand and parts of India. In key producer Vietnam, the main robusta regions still seem to be getting decent rainfall, but the arabica areas in the north look dry. Our expectation for Vietnam 2023/24 has recently been marginally revised lower to 29m bags of total coffee (similar to 2022/23). We have been making small downward adjustments to production estimates across the region.

Coffee demand

Import demand figures were very gloomy throughout 1H 2023. In the second quarter of 2023, net imports into the European Union + United Kingdom collapsed 13.4 percent versus a year ago, while in the United States they were down 9.6 percent. Japan’s coffee disappearance in the quarter was largely unchanged YoY. We can track other 24 non-producing countries, where the drop in net imports in Q2 was 2.9 percent YoY. Globally, the drop for Q2 was 9.4 percent YoY. This is worse than a very poor Q1, and it is in fact, the largest drop we can track in our data going back to 2008. In the 12 months to June 2023, the annual drop in all non-producing countries that we can track was 2.2 percent.

As we have been pointing out for most of last year, the rise in interest rates should have led to a decline in inventories along the pipeline. Roasters and traders also feel more confident that container shipping is working much more normally, so there is no need to keep stocks ‘just in case’. However, these results are worse than expected and lead to a reduction in global demand growth to virtually zero percent in non-producing countries, while producing country demand might still grow at over one percent.

The rather low arbitrage (at around USD $0.40 at the time of writing) should lead to a comeback in arabica demand. This is particularly the case in producing countries (and Brazil in particular), where there is usually a surplus of low quality arabica grades as subproduct of the export business.

Image: Vanessa L Facenda

Price drivers

An expected recovery in both Brazil and Colombia in 2023/24, combined with weak demand, continues to put downward pressure on the market in the absence of more adverse weather or news. This is exacerbated by the prospect of a recession in the EU. Yet we are not far from cost of production in a number of arabica-producing countries. The rainfall pattern in the Brazilian arabica belt will, as usual, be the focus of the market over September and October.

If the idea of a bumper arabica crop in Brazil in the coming year is reinforced not only by good rainfall, but also by good flowering and actual fixing of flowers and pinheads through November, then there is a chance that speculators will start selling arabica futures with more conviction and prices could move lower and closer or even below cost of production, which is roughly estimated at USc 140/lb. But in the short term, any variation in the weather pattern in Brazil (weather hardly ever is perfect) and a very probable improvement in import demand in Q3 are likely to offer support to prices.

Meanwhile, speculators in the robusta market will continue to focus on potential El Niño-related effects. As El Niño is expected to last until at least the end of Q1 2023, speculators will likely stick around for the remainder of the year. Concerns over the EU Deforestation Regulation could also mean that some robusta produced before mid-2023 is carried into 2025 (at a tremendous cost). On the arabica front, this is less likely, as arabicas would lose more value over time.

• Within RaboResearch Global Economics & Markets, Carlos Mera serves as the head of the agri-commodities markets team in London. Previously, Mera worked at Rabobank as a senior commodities analyst with a focus on coffee and cocoa. Prior to joining Rabobank, he worked at Neumann Kaffee Group where he conducted coffee market research for more than seven years. Mera holds a Master of Finance from the London School of Economics and a Bachelor of Economics from the University of Buenos Aires. He may be reached at: carlos.mera@rabobank.com. With over 140 analysts around the globe, RaboResearch covers topics related to economics, global financial markets as well food and agribusiness. For more information on RaboResearch, visit: rabobank.com/en/research.

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Packaging has always been a balancing act. Consumer packaged goods (CPG) companies must weigh cost versus performance and market appeal versus machinability. As interest in sustainable packaging has grown, brand owners also must balance circularity with price, safety, distribution requirements, material availability, and overall environmental impact. This requires a dialogue among stakeholders about packaging design, material choices, and end-of-life disposal options.

To begin this conversation, PMMI, The Association for Packaging and Processing Technologies, and AMERIPEN (the American Institute for Packaging and the Environment) have published the 2023 PACKAGING COMPASS: Evaluating Trends in US Packaging Design Over the Next Decade and Implications for the Future of a Circular Packaging System. The study and accompanying infographic identify key trends in packaging design and materials and the implications of these trends on legislation and the recovery systems for consumer-packaged goods (CPG) companies.

By releasing this deep dive into the trends driving the circular packaging system, PMMI hopes to facilitate an industry dialogue that will help close the gap between design needs and recovery needs. Based on extensive research and analysis, the study’s goal is to spark a conversation on trends, present forecasts for the coming decade, and recognise the role of multiple stakeholders in advancing a circular packaging system.

The 10-year forecasts and materials sales projections indicate plastic packaging, particularly the flexible pouch format; recycled-content packaging, primarily paper and plastic; and compostable packaging will experience the highest demand, although the latter represents a small share of the market. Despite the disparity in usage, these three formats have the same hurdles to overcome, a lack of end-of-life recovery infrastructure as well as effective legislative and investment strategies.

A survey of 394 CPG brands and retailers shows:

• 75 percent use plastics in packaging
• 61 percent use paper
• 14 percent use glass
• 13 percent use metal

Projections show plastics will grow across every category, and the use of flexible film will expand at a 4-6 percent compound annual growth rate (CAGR), slightly above the 3-4 percent CAGR for plastics overall. Plastic films offer significant operational and sustainability benefits. Tensile strength delivers more protection with less material. Light weight and compact footprint reduce carbon emissions during distribution. Highly customisable materials run efficiently on filling lines and reduce overall cost and cycle time. Consumers appreciate the format’s light weight, reduced shelf space requirements, and potential for easy-opening and resealing features.

Although usage continues to grow, figures from the Recycling Partnership show only 1.9 percent of the US population has access to flexible film recycling. Most of this film is recovered from retail drop-off programs, but consumer participation in these programs is low. As a result, establishing a circular economy for flexible films will necessitate a substantial expansion in recycling infrastructure that involves better collection, sortation, and end-of-life reprocessing, potentially including widespread use of chemical recycling. The report explains chemical recycling is an emerging technology that reverts materials to their original monomers. Its adoption could enhance opportunities for the circular reuse of flexible films by increasing collection, lowering sortation requirements, and improving recycled resin quality by reducing contamination, colour, or scent concerns, thereby simplifying the regulatory acceptance of recycled resins for food-contact applications.

Compostable packaging has a projected CAGR of 15-16 percent during the next decade and is receiving a lot of attention because there is a perception that it offers a less-complicated end-of-life option. However, composting also suffers from a lack of infrastructure. According to statistics from the Sustainable Packaging Coalition, only 27 percent of the U.S. population has access to curbside composting programs, and only 11 percent of those composting programs accept packaging.

To realise the full circular potential of compostable packaging, the US needs to increase consumer access to composting by investing in the collection of compostable materials and in expanded access to composting facilities that accept food scraps along with packaging. As the US looks at investments into the necessary collection and processing infrastructure, the most immediate impact is likely to be attained if closed systems like stadiums, foodservice outlets, and cafeterias were implemented before household collection programs.

Recycled-content packaging is a popular path toward circularity. Design for recycling guidelines have been developed by several organizations and are helping the packaging industry choose combinations of polymers, labels, and additives that do not hinder a package’s recyclability. Many brand owners use these guidelines to help meet commitments to increase the use of recycled content. Unfortunately, a disconnect between strong demand and insufficient supply and processing capacity for recycled resin must be overcome. Like flexible packaging, potential solutions lie in simplified and improved collection, better sortation techniques, and greater capacity for end-of-life reprocessing. Chemical recycling could be a potential way to increase capacity as well as recycled resin quality.

Improving infrastructure

Achieving a circular economy depends on improving the infrastructure for collection, sortation, and end-of-life reprocessing. Policy changes will be needed to achieve these objectives. According to the report, establishing a circular economy will depend on the development of:

• Extended Producer Responsibility (EPR). EPR programmes shift financial and operational responsibility for end-of-life management of products to producers instead of taxpayers and the government. As of spring 2023, four states (California, Colorado, Maine, and Oregon) have enacted EPR requirements, and more states are considering EPR bills. However, a national law would overcome a patchwork of differing state requirements and simplify compliance.

The research within this study indicates EPR programmes should include a focus on ways to improve the quality and quantity of recycled materials. Key considerations should explore how best to invest in the composting infrastructure, including packaging, and address how to handle hard-to-recycle materials by investing in collection and sortation technology and supporting end-market development. The data also show package design needs to consider many factors beyond design for recycling. Leveraging EPR to help balance all the design variables should create benefits for each stakeholder.

• Universal Access. Providing all households with convenient and consistent access to recycling and composting services would increase collection.
• Standardised Definitions. Definitions for commonly used terms like recycling and composting would ensure stakeholders are communicating a consistent message and reduce consumer confusion.
• Alternatives to Material Bans. Material bans can prevent CPG companies from choosing the optimum packaging material and increase a product’s environmental impact. Shifting from material bans to dialogues about collection, sorting and reprocessing gives brand owners the freedom to pick the best option.
• Recovery Innovation. Federal investments into programs uncovering emerging science and data are needed to drive efficiencies across packaging design and waste management.
• Data Collection. Consistent data collection will help measure and benchmark the performance of a circular packaging economy.
• Reusables Infrastructure. Reusables are another promising option to achieve circularity. However, as with other options, infrastructure is lacking, and investment is needed. According to the report, successful reusable packaging programs depend on redesigning distribution systems for reverse logistics. This will involve establishing safe and hygienic drop-off or pick-up collection points, which are convenient to consumers, and equipping production lines for washing and refilling. Currently, the adoption of reusables poses a daunting challenge for many packaging companies due to the costs to develop and scale a system to achieve a significant impact. A collaborative strategy that incentivises innovation is needed. Understanding the challenges and opportunities of reusables will require participation from a wide range of stakeholders.

Conclusion

A circular economy can be achieved by focusing on how best to invest in recycling and composting infrastructure across the US and tying that dialogue to what is happening with packaging design and the multiple variables packaging designers must juggle. Success will depend on how well members of the packaging value chain understand each other’s challenges and opportunities.

• Jorge Izquierdo is vice president of market development for PMMI, The Association for Packaging and Processing Technologies. Based in Herndon, Virgina, PMMI organises the Pack Expo portfolio of trade shows. This year’s Pack Expo Las Vegas takes place 11-13 September. To register or for more information, visit packexpolasvegas.com.

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The global coffee supply chain is teeming with latent economic opportunities – hidden within the intricacies of market access, quality improvement, pricing dynamics, enhanced traceability, and logistical coherence. Standing prominently against this backdrop emerges the direct trade model, holding the promise of redefining how green coffee buyers and sellers interact.

While the direct trade model paints a picture of a stronger value chain – one where producers and buyers connect directly, fostering transparency, traceability, and quality – the reality often diverges from the ideal. Beneath its vast potential lies a labyrinth of challenges that render the value chain as intricate mazes fraught with complexities, fragmentations, and inefficiencies ultimately curtailing participation in international trade. Though the broad expanse of international trade beckons many, less than one percent of eligible green coffee buyers source directly from origin. This low percentage underscores a poignant truth: the allure of direct trade, while strong, is often overshadowed by the perceived risks, dissuading many smaller businesses from embarking on the direct-to-origin journey.

The lure of direct trade sourcing

Direct trade arose as an answer to the conventionally fragmented coffee supply chain, long criticised for its opacity and lack of traceability. In the traditional model, coffee producers often have less negotiation power, less profit, and find it more difficult to engage with quality control or sustainable production systems.

Why is direct trade gaining traction? Several compelling reasons drive this shift:

• Enhanced Quality Control: Direct trade encourages a closer relationship with producers, enabling buyers to have more control over the quality of coffees contracted.
• Increased Economic Margins: By cutting out superfluous intermediaries, producers often receive a better price for their products, leading to a more equitable distribution of profits.
• Transparent Traceability: Knowing exactly where the coffee comes from allows buyers to guarantee the authenticity and sustainability of their products to consumers.
• Strengthened Relationships: Direct trade fosters long-term relationships between producers and buyers, leading to predictable forecasting and sales.
• Narrative and Branding: Being able to share a direct, authentic narrative about where the coffee originates can significantly enhance a brand’s appeal in today’s consumer market.

The multifaceted world of risks

As the direct trade model gains popularity, it’s paramount to recognise that this amplifies the exposure of smaller businesses, on both sides of the supply chain, to an array of risks. The gravity of these challenges underscores the necessity for an all-encompassing risk mitigation strategy, especially for those eager to establish direct trade channels with suppliers at origin.

Sourcing from origin necessitates a clear understanding of the associated risks:

• Seller Credibility: Initiating business relationships with sellers at origin means dealing with potentially unfamiliar entities. While many sellers are honest and genuine, there is always a risk of encountering unscrupulous players, leading to potential financial and reputational damages.
• Trade Inexperience: Without a deep understanding of international trade dynamics, companies can easily make blunders. This is not merely about paperwork — it is also about understanding international business etiquette, negotiation nuances, and trade regulations, all of which can significantly impact trade outcomes.
• Regulatory Labyrinths: Every country has its unique set of rules and regulations for exports and imports. Navigating these constantly changing terrains requires a firm grasp and timely updates, or businesses risk incurring penalties or facing shipment delays.
• Logistical Lags: The journey from origin can be a long one. Between milling, storage, and multiple transportation stages, there’s ample scope for delays. A hiccup at one stage can cause cascading delays down the line, jeopardising quality and significantly increasing logistics costs.
• Quality Perils: Coffee, being a perishable product, has a critical vulnerability window. From improper storage causing mold to contamination during transit, quality control requires vigilant oversight at every step.
• Pricing Swings: The global coffee market is susceptible to fluctuations due to weather patterns, political instability, or economic shifts. These swings can affect both buying and selling prices, demanding proactive financial strategies.
• Communication Barriers: Differences in language, cultural nuances, and time zones can create a breeding ground for miscommunications. Clear, consistent communication is pivotal to keep all stakeholders aligned.
• Tracking Troubles: In a world where consumers demand transparency, a lapse in traceability can have repercussions. Ensuring clear tracking from origin to final delivery is not just a logistical need but also important in preventing product loss or swaps.
• Securing Payments: As businesses venture into new territories, they face varied banking systems and payment norms. Guaranteeing secure, timely payments is a task that demands diligence and adaptability.

The risk mitigation toolkit

In conventional trade frameworks, intermediaries often shoulder many of the inherent risks. However, small buyers aiming to source directly from the origin step into a realm where they must confront and navigate a diverse spectrum of challenges and uncertainties themselves.

Addressing these challenges head-on with a strategic toolkit is paramount:

• Sourcing Diversification: Spreading sourcing across multiple suppliers can safeguard against unforeseen disruptions. Sourcing through a variety of channels, such as direct trade and spot coffees, can mitigate dependency risks.
• Vigilant Vetting: It is not just about finding a supplier; it is about partnering with the right one. Rigorous identity assessment, such as trade license verification, and previous trade references can offer insights into a seller’s reliability.
• Pricing Transparency: Pricing terms, such as Free on Board (FOB), influences associated risks and costs of the coffee contract. Trade organisations such as the International Coffee Organization (ICO) outline glossaries of trade definitions. Clear and open communications during pricing negotiations can prevent future disputes and foster trust.
• Quality Contingencies: Contracts can be drafted with clauses that clearly outline quality expectations and the recourse available should these not be met. This not only safeguards the buyer but also sets clear expectations for the seller. Organisations like ICO have contract templates that can be used as guidelines when drafting this agreement with the seller.
• Quality Oversight: Regular inspections, sample testing, and third-party quality assessments can ensure that the product maintains the desired standard throughout its journey from origin. Contracting Pre-Shipment Samples (PSS) before the coffee is exported can offer additional protection against quality discrepancies.
• Smart Sourcing: Instead of placing large, infrequent orders, consider ordering smaller quantities more frequently. This offers an opportunity to develop a relationship with the supplier over time and reduces stock holding risks.
• Optimised Logistics: Instead of shipping sea freight, consider air freight which accommodates smaller volumes and can safeguard against quality degradation through its fast delivery timeline.
• Hedging Risk: Hedging and trade insurance policies can offer protection against unforeseen events and financial loss, be it shipment loss, quality degradation, or payment defaults.

Forging ahead: collaborative commerce

Direct sourcing from origin is often a voyage into uncharted territories — the horizon is full of potential, but without the right tools and strategies, it is easy to get lost in the vast seas of international trade complexities. One must tread with a blend of caution and strategy. While establishing direct ties with suppliers creates a more transparent supply chain, it also demands a profound understanding of logistics and regulatory landscapes. In such scenarios, enlisting expertise can be the guiding star.

Seeking collaboration with trusted trade partners transforms the journey. It turns the solitary expedition into a collaborative odyssey, distributing the challenges and risks of global commerce. In this digital age, customised technology platforms tailored for international coffee trade stand out as unique powerful allies. These platforms, equipped with features like predefined trade document templates, quality controls, and shipment tracking, revolutionise the way we manage trade risks. Technology isn’t just a tool; it’s a strategy enabler.

As we reflect upon the vast landscape of the coffee trade, it is clear that the world stands on the brink of a transformative shift. The direct trade model, with all its promises and challenges, represents not just a business strategy, but a holistic approach to reshaping the way we view commerce: prioritising transparency and equity. The road ahead is not without its obstacles, but with collective commitment and the fusion of traditional methods with innovative technologies, we can usher in an era where direct sourcing can become the gold standard.

In our shared pursuit of unlocking the immense possibilities within the coffee sector, let us remember to sow the seeds of collaboration and innovation, fostering global connections and ensuring a brighter future for the world of coffee.

• Brianna Dickey is the founder and CEO of CropConex, a software platform designed to unlock economic opportunity across our global agricultural supply chains. Starting in Ethiopia, the New York-based startup seeks to increase efficiency and liquidity in agricultural trade. The platform integrates the value chain in one convenient location, connecting green coffee buyers, producers, and logistics service providers with digital tools to increase efficiency, traceability, and profitability. Prior to CropConex, Dickey has worked on supply chain enablement and optimisation programs across Colombia, Ethiopia, Honduras, Tanzania, Costa Rica, and Panama. She may be reached at: hello@cropconex.com.

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Having experienced explosive popularity over recent years, cold brew coffee is now leading the next wave of coffee culture. In the United States, the cold brew market is now valued at $2.3 billion, growing by 213 percent since 2016 (GlobalData Plc, 2020). Meanwhile in Europe, cold brew is the fastest growing segment in RTD/Iced Coffee, with the United Kingdom becoming the fastest growing cold brew market, forecast volume growth of 10.5 percent between 2021-2025 (GlobalData Plc, 2021; Total RTD/Iced Coffee Market, Global Beverages Databook 2022).

Cold brew’s rapid ascent may in large part be down to its distinctive ability to meet consumer demands for convenience, health and premium flavour. With 83 percent of consumers expecting innovative flavours and new experiences in convenient grab-and-go formats to fit in with their busy lifestyles, cold brew can help beverage brand owners meet these key consumer trends (swnsdigital.com).

Demand for Premium Flavour

Unlike other coffee extracts, cold brew is made by slowly steeping coffee in ambient or cold water for extended periods of time. This gentle process extracts the superior flavours from the grounds, without using heat or pressure. The final product has a smooth, barista quality, rich flavour with a naturally sweet taste profile, similar to genuine roast and ground coffee. Cold brew is also perceived to be up to 67 percent less acidic than traditional hot brew and iced coffee, thus meeting consumers’ growing thirst for a more unique sensory experience (Mintel 2020).

The genuine roast and ground flavour has won favour with even the most discerning of coffee drinkers, being most commonly described as “smooth” and “indulgent” (Kerry 2018/foodnavigator-usa.com). This rich flavour profile has resulted in cold brew becoming a regular purchase for many consumers, overtaking iced coffee consumption (Datessential, SNAP Food Profile: Cold Brew, March 2018/GlobalData Plc 2021).

Due to its naturally sweet and rich flavour profile, one of cold brew’s unique appeals is that it can be drunk black without the associated bitterness of hot brewed coffee. This is particularly the case in Europe, where black is the most popular variety of cold brew, accounting for 69 percent of new product launches, highlighting the importance of coffee quality (Mintel GNPD, 2021).

Additionally, nitro cold brew offers a completely unique coffee experience. Infusing cold brew with nitrogen creates a silky smooth, velvety texture with enhanced sweet chocolatey notes, and a foamy head that resembles a Guinness. With its beer-like appearance, nitro taps into craft brewing trends and appeals to coffee lovers seeking a premium, unique beverage experience.

Image: H Webster

Convenience and Affordability

While consumers are seeking more premium beverage experiences, they still want their drinks to be affordable and fit in with their busy lifestyles.

Propelled by the pandemic, multi-serve formats have been gathering favour among consumers. Designed for at home consumption, bigger pack sizes and multipacks drive better value perception and also offer convenience and flexibility.

Multi-serve formats make it easy for consumers to enjoy cold brew at home, without the challenges of trying to brew it from scratch. Concentrate formats in particular can be diluted and paired with anything from oat milk to ice cream, offering consumers a completely customisable caffeine fix.

Healthier Beverages Without Sacrificing Taste

Research shows that 62 percent of consumers gravitate towards healthier beverage alternatives, seeking out caffeinated drinks with clean labels, free-from claims, and perceived health benefits such as improved mood, heightened concentration, and increased energy (Global Consumer Survey, 2020).

Cold brew is natural sugar and calorie free. Because of its naturally sweet taste profile and low acidity, it does not need heavy amounts of sugar or flavours; a little goes a long way, enabling beverage brand owners to tap into the demand for clean-labels, free-from and low-sugar claims.

Millennial and Gen Z consumers in particular are adopting a more holistic approach to health and are reaching for beverages that combine elevated health credentials, flavour and indulgence.

The versatility of cold brew allows beverage brand owners to diversify their product ranges and appeal to these younger health-conscious consumers, of which 40 percent of Gen Z consumers prefer their coffee in chilled, ready-to-drink formats like cold brew (Technomic Generation Report, 2018). The flexibility of ready-to-drink offerings and multi-serve formats, means that brand owners can cater to consumers’ varied preferences and, ultimately, tap into the next wave of coffee culture.

• Siân Edwards, group insights manager at Finlays, a leading B2B supplier of tea, coffee and botanicals, headquartered in London, UK. She is responsible for understanding the trends and dynamics that drive the global market for tea, coffee and botanical ingredients.

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In June 2021, Shanghai police broke up a ring of pu’er counterfeiting dens and confiscated over ten tonnes of fake pu’er cakes that would have been sold for an estimated 1.8 billion RMB (about USD $250 million). The police made a public display of destroying the seized teas, which included a road roller pulverising the fake cakes.

Police busts like this in China are not uncommon. Guangzhou police confiscated about 23,000 cakes in 2014, and 120,000 cakes again in 2018. Counterfeiting pu’er cakes appears to be big business.

Shanghai police steamroll counterfeit pu’er teas in June 2021. Image source: zhuanlan.zhihu.com/p/420794580

Authentic pu’er cakes can be quite pricey. The value of pu’er is due to a combination of several factors. Pressed pu’er cakes can be aged for decades or even centuries. A properly aged pu’er is comparable to an aged bourbon or wine in that aged pu’er are appreciated for their exquisite character. Use of the name “pu’er” or “pu’erh” has also been deemed a protected geographical indication (PGI) within China since 2008, and a 2021 China/EU agreement expanded its international recognition.

Pu’er tea can only be produced within designated areas in Yunnan province. This PGI creates further constrictions on producers of authentic pu’er in that they now have a more defined region from which they must procure leaf of various quality levels and sizes to follow blend recipes. The more highly prized pu’er often comes from celebrated mountains where tea trees have been growing for hundreds of years. Generally, the better the mountain’s reputation and the more ancient the source tea trees, the more valuable the pu’er.

Before delving further into the nuances of pu’er and counterfeit pu’er, it helps to have some definitions in place. Outside of China, “pu’er” may be used to refer to many different dark teas. Dark teas are teas that have undergone a pile fermentation process in which bacteria and enzymes break down elements like naturally occurring sugars and amino acids in the tea leaves. This process is different from oxidation, the more common process that is controlled to create green, black, and wulong (oolong) teas. Dark teas are produced in Yunnan province as well as other provinces. Hunan province, for example, is known for producing various styles of dark tea, but Hunan dark teas would not be considered pu’er teas in China. Additionally, lower grade pu’er products, like some fannings and bulk leaf products bound for the export market, may be manufactured in the pu’er style in places outside of the PGI designated areas. These lower value pu’er items are best understood by the import countries as a product reflecting shu (see below) pu’er flavour and character without the intent of infringing on PGI status or counterfeiting.

Pu’er teas come from designated areas within Yunnan province. PGI and China domestic designations specify that pu’er tea must meet several criteria, including:

• The leaf material must come from the designated pu’er areas;
• The type of leaf used;
• The processing methods used.

When these criteria are met, two kinds of pu’er can be produced:

• Raw, or “sheng” pu’er. Sheng pu’er is a greener leaf that is often pressed into cakes for the purpose of aging over years or decades. The fundamentals of the traditional sheng pu’er process have been used for centuries.
• Ripe or “shu” pu’er. Shu pu’ers and shu pu’er processing methods were developed roughly 50 years ago to replicate some of the look and characteristics of sheng pu’er. It can be thought of as a type of rapid aging process, but the result is considered inferior to a well-aged sheng pu’er.

Modern pu’er cake nei fei with anti-counterfeiting features. Image: Google/JW Kaler

On the counterfeiting side, forgers employ several methods to create fakes. The more egregious counterfeits copy the packaging of well-known pu’er brands. This involves copying the outer wrapper of the pu’er cake along with the nei fei (paper label pressed into the surface leaves of the pu’er cake) and the nei piao (paper ‘ticket’ placed on top of the cake before wrapping the cake. More modern pu’er cakes employ anti-counterfeiting measures on their internal and external packaging.

In addition to imitating famous brands, counterfeiters may also use substandard tea leaf or leaf from outside of the official pu’er area. The overall quality of the tea cake may be compromised, with higher quality leaves showing on the outside of the pressed pu’er cake, while broken and poor quality leaves are used below the surface of the pressed cake. Newer and lesser-known pu’er brands may also falsify information on the mountain or the age of the trees that the leaf material came from, knowing that older trees and specific mountain origins command higher prices.

The impact is vague

Counterfeiting pu’er may be a lucrative criminal business within China, but the impact outside of China is less clear. China’s annual production records provide a breakdown of overall dark teas produced each year. Export data is classified differently. In December 2020, the China Customs Tariff Commission of the State Council adjusted the export codes used to delineate exports of shu pu’er from other dark teas. No separate designation for sheng pu’ers was provided. Reports tell us that China consumed 364,000 metric tonnes (mt) of dark tea in 2022. The average price was 88.19 RMB per kg, compared to 160.99 RMB per kg for green tea.

Exports of shu pu’er totalled 1,916mt, or 0.5 percent of all 2022 tea exports. In comparison, 351mt of dark tea was exported. A further breakdown is harder to find, but well established pockets of pu’er and dark tea consumers can be found in Hong Kong, Taiwan, and Malaysia. These export destinations are also known to have communities of pu’er and dark tea collectors who seek out rare and high quality teas. The climates of these areas are considered ideal for naturally aging these teas.

Pu’er and dark tea consumers outside of China have a limited range of options to avoid purchasing counterfeit pu’er. For starters, it is the more expensive pu’er that gets copied, so one should exercise caution when purchasing pu’ers that are decades old with asking prices in the thousands of USD. In the United States and other countries that do not recognise PGI, problems also arise when “pu’er” gets used as a broad category term for a wider variety of dark teas. In such situations, a reputable vendor is important in verifying whether a pu’er product complies with GI standards used in China or the EU. When purchasing pu’er pressed cakes, experienced buyers have learned how to examine the inner and outer packaging (ie, the wrapper, nei fei, and nei piao) for evidence of forgery.

Counterfeit pu’er teas remain an ongoing problem, particularly for investment-grade pu’er cakes. However, opportunities to avoid fraudulent purchases exist where traceability of geographic indicated products and anti-counterfeiting packaging practices are properly scrutinised. In some regions of the world, better distinctions between dark tea and pu’er will also enable customers to better understand the kinds of teas they purchase.

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The private label tea and coffee market in Eastern European and Nordic states is steadily growing this year, thanks to a stable demand and the ongoing expansion of portfolios by leading local players. 

In contrast to Western Europe, where the tea and coffee private label segment has been actively developing since the 1980s, most Eastern European states have registered significant market growth and massive launches of new, private label products in recent years. The same, however, cannot be said for the Nordic states, where the popularity of private label tea and coffee brands, produced by leading local retail chains has always been high. 

One such brand is Norwegian chain, REMA, which is implementing its REMA 1000 private label strategy that involves actively developing its private label brands in both the Nordic states and other Eastern European states. REMA has significantly expanded its portfolio of private label tea and coffee brands over the past few years, and most of analysts expect the company will continue to develop this segment. 

REMA’s current list of tea and coffee brands is wide and includes some iconic brands in the Nordic market. An example of this Kolonihagen, a well-known Norwegian coffee and tea private label supplier within REMA, which in recent years has strengthened its positions both in the domestic market and overseas.  

Arnt Ove Dalebø Englund, co-founder and director of innovation at Kolonihagen, said that Kolonihagen recently entered the premium tea category with a range of four variants. “This is part of the REMA 1000 private label strategy, having alternatives — [opening price point] (Prima), mid-range (R) and now finally also covering the premium through the organic Kolonihagen brand.” He said that this series of teas is nationally distributed and is present in all 650 REMA 1000 stores in Norway. According to the size of the category [in each store] (both shelf space, rotation and turnover), there are four premium products at the moment. 

“We do not have plans to expand the [number of products, [instead] bringing in new flavours [as a] one in-one out. Additional value propositions are also highly relevant and part of a continuous strive to do things better. That is the core of our brand,” said Dalebø Englund. “One example of this is to put regenerative principles (and certifications) on top of the organic standards. Seasonal products are [also always being considered].” 

Dalebø Englund expects Norway’s private label market and that of other regional countries as well as Eastern Europe will show stable growth rates in years to come. “It’s hard to answer this on behalf of competitors in FMCG market in Norway, but in general, the private label category share is lower than that of other Nordic and European countries. [I predict] that moving from 20 percent to between 40 and 50 percent is likely in a two to three-year period, and this will probably be even higher for the tea and coffee category. 

Other major players are also considering accelerating their expansion both in the market of Nordic states and Eastern Europe. 

Bethany Physick, marketing manager at Finlays Europe Extracts, shared that across Europe, Finlays is continuing to help European brand owners tap into the health and wellbeing trend with its Just Add Water solution, a range of sachets containing tea and botanical powder blends that are designed to meet consumers’ desire to drink functional water on the go. “Later this year, Finlays’ new cold brew coffee extraction facility will open in the United Kingdom bringing an exciting range of cold brew coffee extracts to the fast-growing European market,” she said. “The coffee extraction facility will produce for branded and [private]-label suppliers in the UK and European and Eastern European retail and hospitality sectors.” Physick noted that Finlays is already a global leader in cold brew in the United States, and it expects growth in the category in the European market. 

Regarding future market prospects, Sian Edwards, insights manager, Finlays Group, explained that tea in all formats offers major potential in Eastern Europe, in terms of the market scale and growth prospects. “There are big markets, many of which are fast premiumising, as consumers seek a wide range of healthy, functional and indulgent beverages. The ready-to-drink (RTD)/iced tea market was valued at USD $2 billion in 2022, and has yet to reach maturity, with a forecast of 18 percent CAGR between 2022 and 2027, to reach an estimated market size of $5 billion in 2027.” Furthermore, he noted that RTD/iced tea is being bolstered by consumers seeking healthy and innovative alternatives to traditional soft beverage categories. 

“Hot tea and infusions are a more mature category for consumers in Eastern Europe. The category was valued at USD $9 billion in 2022 and is expected to exceed $10 billion by 2027 – with a 2 percent CAGR,” said Edwards. “Per capita consumption in the region is particularly high, with tea established as a habitual, daily necessity in many Eastern European markets. There is continued consumer demand for both RTD/iced tea and hot tea and infusions, and we see private label continuing the play a valuable role in this market growth.” 

PL still strong in Western Europe 

The private label market is traditionally within the interests of some major Western European players. 

Jens Schneider, managing director of Kloth & Köhnken Teehandel GmbH, one of leading tea suppliers in Europe, said the company has big plans for the further expansion this year. “There is an ongoing demand for organic and the wish for a sustainable supply chain throughout the world. The Nordic states, and Eastern Europe are markets we have good contacts in for many years, and we [see] steady, growing consumption [in both]. 

Still, according to Schneider, after three years of continuous challenges with consequential influences in sales channels, filled stocks and market movements, “it is currently difficult for the company to predict what trend or demand it really has in the market. [However], the focus on and trends toward organic, transparency and sustainable sourcing will be ongoing and rising.” 

PL optimism fades in the Nordics 

Representatives of some leading Nordic and Northern European retailers are less optimistic, regarding further prospects of the private label market, particularly in the coffee segment. Juhani Haara, a senior sales manager, S Group, a Finnish retailing cooperative organisation, said that private label, the coffee segment in particular, has decreased. “According to our sales data, there is a clear decline in private label coffee sales volume – a nearly 19 percent drop – this year. The reason for this is the increased campaigning with branded products both in S-Group and in the market. On the other hand, private label tea sales volume has increased significantly, by about 25 percent, during this year,” she said, adding, “this is certainly influenced by the economic situation. We expect this trend to continue towards the end of the year.” 

Haara said that new private label products have been added to the tea selection this year: two Kotimaista herbal teas and four different X-tra products. “There hasn’t been any promotion in tea products, but our own PL products are remarkably affordable compared to brands. This year there have been no private label novelties in coffee yet, but we are developing our selection.” 

Most independent analysts also do not expect sharp market growth rates in years to come. Julija Poliscuk, a senior consultant at global market research firm, Euromonitor International, believes that private label tea and coffee items are not growing as quickly as in other food and drinks categories. “The slow dynamics in current value and flat or declining volume share can be attributed to these products’ association with rituals and thus, the demand for high-quality offerings, reflecting the cultural and image significance they hold.” 

She said that in 2022, the current value share of private label in Nordic countries for coffee and tea increased slightly, reaching 9.3 percent. “This cooling trend aligns with stabilised consumer financial confidence and desire to spend after the challenging years of Covid-19. Notably, the volume share of retailers’ own brands in coffee rose by 0.7 percentage points, reaching 11.8 percent in 2022, signaling better performance compared to the overall coffee market in Norway, Sweden, Finland, and Denmark combined,” Poliscuk explained. “In Eastern Europe, historically known for brand-oriented preferences in tea and coffee, the current value share declined by 0.2 percentage points in 2022, reaching 5 percent. Coffee’s volume share was 7.2 percent (versus 7 percent in 2021), which pales in comparison to the strong growth of discounters and retailers’ own brands’ performance in other categories.” 

She added that many Eastern European markets offer big promotions for national tea and coffee brands, which reduces price gap between those products and private label ones. This market situation, according to Poliscuk, favours branded products. “When the price difference is marginal, consumers opt for familiar brands, purchasing them on discount. This hampers the development of private labels in tea and coffee in the region.” 

Poliscuk said that the hyperinflation in Eastern Europe, did not boost private label in 2022, as consumers inertially continued their ‘revenge’ spending after the Covid-19 period. “However, 2023 might bring a different outcome as consumers already started downtrading, potentially making private label a more attractive option. The level of sophistication and price segmentation within private label is more prominent in countries with well-developed modern grocery retail.” Additionally, recent launches of private label coffee and tea products in the Nordics target audiences seeking added value, which leads to the appearance of more specialty coffee (eg, specific bean origins). “Retailers are also expanding their assortment to align with sustainability strategies, offering more organic teas and coffee in modern, environmentally friendly packaging.” 

Per Poliscuk, private Labels primarily are considered ‘anti-crisis products’, allowing consumers to save or maintain their preferences without compromising on quality. The hyperinflation in Eastern Europe during 2022 and continuing into 2023 will impact consumer behaviour and drive the surge in private label adoption. As people seek cost-cutting measures, price increases in coffee and tea will push them to revise their previous preferences. “While Private Label won’t dominate the hot drinks market due to the nature of these products, its expansion alongside aggressive discounters will positively influence retailer’s offerings.” 

In Nordic countries, Poliscuk said the volume of private label hot drinks is expected to stagnate, even decline, but the value share will increase alongside the price. More premium coffee and tea aimed at quality seekers eager for better prices will emerge. “More caffeine-free and health-improving teas are expected, while coffee offerings will focus on specific beans and roasting variations. Retailers in these Western countries have the expertise to develop premium store brands based on specific needs like sustainability or fair trade.” 

Despite the impact of war on logistics chains and prices, with a small private label market and a decreased national brands presence, Eastern Europe expects a stronger demand than ever before for retailers’ own brands. 

• Eugene Gerden is an international freelance writer, who specialises in covering the global coffee, tea and agricultural industries. He worked for several industry titles and may be reached at gerden.eug@gmail.com. 

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Tea has been enjoying its fair share of popularity since the last several decades – centuries, even – so much so that there are people whose day does not start in the true sense without taking a sip of hot tea. Plus, tea is known as a good antioxidant. 

With regard to flavoured tea, the very concept springs from the fact that ‘variety is the spice of life.’ Breaking the monotonous rut is what humankind cares the most about. Tea has come a long way over the last few years in terms of flavours and the way they are being devised and marketed. Starting with fruits, the flavours have made a beeline to flowers, alcohols, and several chemical compounds. For instance, amyl acetate, which gives banana flavour, is distilled from real bananas. The mixture of amyl alcohol and vinegar also gives banana flavour, but then it won’t be termed as ‘natural. Likewise, strawberry flavour could be devised naturally as well as artificially. 

The best part about tea leaves is that most are receptive to flavours. It has been found that green and black tea leaves go well with almost every type of flavour. Dry flavours do well with loose teas, whereas liquid ones work for the teabags.  

There are several variants regarding tea flavours as follows:  

• Natural Extracts: These flavours come from extracts of the essential oils of the blossoms, fruits, leaves, roots, and likewise. The basic function of these extracts is that of contributing to fragrance of teas.  
• Natural Granules: These granules, as the name suggests, come from natural essence that is spread on tea leaves all through. The mixing happens till blending with leaves happens. Most flavours come from granules comprising blossom, herb, and fruit extracts. Also, herbal infusions come as inclusions, which are solid particles of fruits, herbs, spices, and blossoms mixed with tea leaves on direct basis — when steeped, the right taste is obtained. 

• Nature-Close Flavours: These are the flavours extracted through chemical processes. There is not much difference between natural and nature-close flavours except for the extraction process. Preserving turns out to be simpler as compared to natural processes and cost-effective. It needs to be noted that here the extraction is artificial, not the flavour. 
• Artificial Flavours: The name is self-explanatory. The flavours are created artificially to make stronger and better blends. 

Another variety is that of scented tea. It is obtained from flowers like jasmine. Also, smoked tea is popular, which is processed around cypress or pine wood fires.  

Medical benefits of flavoured tea 

Tea has many healthy attributes such as being ‘chock full’ of antioxidants, polyphenols, and catechins, but there are also many medical benefits associated with various teas. 

Earl Grey tea, for example, is a popular flavour that is formed by blending bergamot oil and tea leaves. The medical benefits include improvement in dental health, reduction of anxiety, helping in digestion, increasing energy levels, and body detox. Elderflower tea, a flavoured tea that is especially popular in Europe, is derived from a cream-coloured flower (elderflower) of the elderberry plant. This tea is a rich source of vitamin A, C and several essential nutrients. Apart from Europe, North America is the other major consumer of elderflower tea. In terms of medical benefits, elderflower tea relieves from fever, cough, headache, and cold. The respiratory disorders like tonsillitis, asthma, laryngitis, and others could also be relieved by drinking elderflower tea. 

Though its origins could be traced to China, green tea’s popularity is unmatched across now. Japanese green teas are inclusive of hojicha, genmaicha, tencha, matcha, kabusecha, gyokuro, and sencha. Green tea is available in the form of iced green tea, green tea instant mixes, and green tea bags. The flavours include jasmine, wild berry, cinnamon, vanilla, lemon, and aloe vera. It helps in prevention of loads of ailments like tooth decay, diabetes, cancer, heart disorders by ascertain maintenance of proper blood level and cholesterol all over the body. 

The least processed leaves on the part of Camellia sinensis produce white tea. It comprises juvenile buds. The floral-fruity flavour finds its applications in various industries like pharmaceuticals and cosmetics. It does possess anti-microbial properties and acts as an excellent antioxidant. 

Those vying for clean label products will sync with detox tea, which is conventional as well as organic. Detox tea, as the name suggests, helps in intestinal detox, liver detox, cardiac detox, and likewise. 

Delving into flavoured tea 

By type, bubble tea could be categorised as chocolate, fruits and berries, mixed/blend flavours, and honey. It is popular in the Asia Pacific, India, in particular. The latest offerings include fresh ingredients like fresh fruit, organic cream, green tea, and soy milk. 

Amongst the instant tea mixes, encapsulated tea is trending in certain regions at the moment. Encapsulation is a technique to protect or entrap fragrance and flavours within a coating material. Encapsulated tea reduces the preparation time for the drink. The flavours available include cranberry, raspberry, mango, and lemonade. These flavours are captured by entrapping them within the tea leaves. 

As far as alcoholic tea is concerned, it comes in a wide range of flavours including coconut, mint, peach, cucumber, lime, sweet apricot, mango, and berries.  

In a nutshell, flavoured tea will continue to evolve as the taste buds of consumers will ask for more variations and there would be no stoppage to research being conducted therein. 

• Divakar Kolhe is a tech blogger, is a seasoned digital marketing professional, having worked for numerous online firms in his distinguished career. He believes in continuous learning, considering that the digital marketing sector’s rapidly evolving nature. His forte is analysing the commercial viability of a new breakthrough. 

The post Buds to bolster the demand for flavoured tea  appeared first on Tea & Coffee Trade Journal.

Coffee roasters are increasingly exploring ways to make their business climate positive, turning to advanced roasting machines to lower carbon emissions and improve energy efficiency. Roasting machine manufacturers, in turn, are putting ample effort into developing sophisticated solutions to meet their customers’ expectations.

On average, it is estimated that roasting contributes to around 15 percent of the overall footprint of coffee’s journey from field to cup. Making the roasting business more sustainable, among other things, helps the environment and helps companies to capitalise on responsible consumption trends.

A recent study by the United States think tank First Insight showed that a lion’s share of Gen Z shoppers prefers to buy sustainable brands, and they are most willing to spend 10 percent more on sustainable products. The report also found that Gen Z, along with millennials, are the most likely to make purchase decisions based on values and principles, including environmental.

In light of this, the leading coffee companies rolled out sustainability initiatives, looking to lower the carbon footprint throughout the supply chain to the maximum possible extent, including in the roasting segment.

Illycaffè has embarked on a decarbonisation roadmap which consists of actions along all the value chain: from green coffee to finished products, taking into account all the different steps, including transportation, packaging, distribution and use of coffee machines, said David Brussa, chief total quality and sustainability officer of illycaffè. The eventual goal is to reduce the carbon footprint to reach carbon neutrality by 2033 as a company.

“We strongly think that we need to act quickly to avoid impactful problems for the next generations—a climate disaster. As we often hear, the non-return point is very close to being reached, and we need to start acting responsibly for the sake of our planet and of the generations to come. We have a limited amount of time to put in place the necessary changes. But the change we should aim for is cultural first of all,” Brussa explained.

Nestlé has made the commitment for 100 percent of its coffee to be produced sustainably by 2025. In the roasting segment, the company said it considers lowering emissions by working in the field of consumption of energy, water and protecting atmosphere gases at factories. In addition, machinery use, waste generated at factories, employee commuting, and business travel are also to be reviewed and, if necessary, adjusted. Again, advanced technology is due to play a vital role.

Image: Bühler

Engines of sustainability

Sustainability consists of three basic pillars; all are necessary but not sufficient. Therefore, all must coexist to have a sustainable process: lower environmental impact, lower social impact, and lower economic cost, commented Elena Parmi, a spokesperson for Brambati Spa.

“The first engine of sustainability is tangible affordability for the user, basically lower energy consumption, lower maintenance cost, and lower operation cost. Automatically it leads to less environmental impact, meaning less energy is equal to less greenhouse gas, less social impact, meaning less need for night staff and emergency intervention leads to greater worker welfare, and greater economic sustainability as less need for energy, less need for spare parts, greater staff efficiency allows lower cost of operation,” Parmi said.

Brambati’s development program, which is already in place includes reducing the consumption and reuse of residual energy, reducing the number of components that make up the machinery, and permanent monitoring of the entire system with AI (artificial intelligence) that allows all operating variables to be under permanent analysis.

Parmi said that this is similar to if a person were being monitored with an electrocardiogram, blood analysis, and brain activity while doing a swimming competition or other physical and/or intellectual activities.

“Any deviations from optimal values are promptly identified when they are incipient, thus enabling timely intervention when appropriate and not in an emergency, avoiding the costs of interventions, spare parts and lost production,” Parmi said.

Among the concrete examples of how Brambati’s technological solutions help lowering carbon footprint, Parmi lists the elimination of transmissions with mechanical gearboxes, resulting in increased efficiency and reductions in components, weight, lubricants and maintenance. In addition, the reduction in energy consumption is achieved with regenerative and other innovative exhaust air abatement systems, as well as through intelligent system monitoring and management.

Preserving energy

Other companies also see energy consumption as the key segment, which could do wonders in terms of lowering carbon emissions. For instance, Berkeley-based coffee roastery Bellwether Coffee told Forbes in 2020 that its recirculating roasting technology eliminated particulates and volatile organic compounds in real-time during the roast process, eventually reducing the carbon footprint of each roasting cycle by 90 percent on average.

The company estimated that if a roaster uses renewable energy sources, it can save more than 157 metric tonnes of CO2 emissions. In addition, traditional coffee roasters use a single-pass system that intakes fresh air from outside the roaster, flash-heats it to roast the coffee, then releases it as exhaust through ventilation stacks. Bellwether’s roaster takes the exhausted air, cleans it, and reuses it. This provides hot, stable air throughout the roast cycle.

Image: Scolari Engineering

Energy efficiency and renewable energy are in the spotlight of several technology suppliers. “We focus on the efficiency of the roasting process by means of very fine control of the burner and energy recovery from the roaster stack, always focused on the coffee quality,” said Fabio Clivio, coffee roasting machinery engineer with Scolari Engineering SpA. “We have been doing this for years, so we have fine-tuned the software and the roaster to always get the best aroma from the coffee. We are using a smart green coffee preheater totally synchronized with the roasting cycle.”

In addition, Clivio said, the company has been continually reducing the quantity of CO2 emitted for a batch of roasted coffee by reducing the use of fossil fuels. Scolari realised that the roaster does not need a long warm-up, and when it is on standby, the software activates the energy-saving mode to reduce airflow and gas consumption.

“The preheating follows a specific profile of temperature and time; in this way, as the roaster is ready to load the new batch, the software ensures that the green coffee reaches the target temperature at the same time, with no risk of leaving the green coffee ìn the GBPH longer than necessary. In that way, the quality of the roasting process is guaranteed,” Clivio said.

“We are testing a roaster using a mix of natural gas and hydrogen. Also combined with electrical heating. The combination of hydrogen and electrical heating is the key for carbon-neutral coffee roasters,” Clivio explained, adding that the company uses the last generation of burners already designed to run with a mix of hydrogen and natural gas. “As the hydrogen will be available on industrial bases, our customers will be able to switch to hydrogen.”

Smart heat use

Bühler Group also has a roaster, though not for coffee yet, in its portfolio, running on hydrogen, commented Michael Blatter, head of business segment coffee and nuts, Bühler Group. “We are not only looking at the roaster but the entire value chain, and I think with our sustainability team, we are capable of offering unique customised solutions which are helping in various aspects of sustainability. The roasting process is one step, and we do have solutions in reducing fuel consumption, changing the type of fuel used and using the energy for alternative processes within a factory.”

Among the concrete measures applied to lower carbon footprint, Blatter lists, recirculation of hot air to reduce fuel consumption, preheating of coffee beans with off air from the roaster, and the use of heat recovery systems. In addition, a sustainability service analyzes the CO2 footprint of a factory and implements solutions into existing plants.

“We are working together within different businesses to use ideas and concepts, which already exist,” Blatter said, adding that the company has an R&D roadmap and is working on several solutions called to curb carbon emission of the roasting operations. However, Bühler is not disclosing the concrete details to the public, he added.

• Vladislav Vorotnikov is a Batumi, Georgia-based multimedia B2B freelance journalist writing about the tea and coffee industry since 2012.

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Efforts at Origin

Buencafé

In today’s world, organisations are being called upon to strengthen business relationships and establish connections that support the well-being of both the planet and its people. Buencafé, as the industrial factory of the Colombian Coffee Growers Federation (FNC), specialises in the production of 100percentColombian freeze-dried coffee, with a mission to promote the well-being of the country’s 548,000 families that make their living growing coffee. As part of its 50thanniversary celebration, clients received a unique invitation: an art collection inspired by the Coffee Cultural Landscape that encourages them to learn about the social and environmental projects in which Buencafé invests 100percentof its profits and to get involved in them.

Artwork inspired by the Coffee Cultural Landscape highlighting Buencafé’s social and environmental projects. Image credit: Buencafé

The project initiatives encompass various areas including education, water, reforestation, nutrition, and infrastructure, all of them aligned with the United Nations’ Sustainable Development Goals. In the realm of education, the FNC has created an inclusive and high-quality model that enjoys global recognition, tailored for rural youth. With regard to environmental conservation, technologies that protect water usage and access are developed and implemented. Moreover, reforestation programs that empower women in their commitment to environmental preservation are promoted. Last but not least, social initiatives focused on food security and infrastructure aim to bring wellbeing to coffee growers and families in rural areas. Organisations like the FNC aim to be bridges bringing sustainable value into the coffee industry. (Learn more at https://www.buencafe.com/sustainability-initiatives/.)

Global Coffee Platform

The Global Coffee Platform (GCP) has officially entered a new era of strategic collective action for coffee sustainability, when in June 2023,a leading group of eight member companies backed the initial round of funding for the platform’s new effort: GCP 2.0.

Underpinned by an ambitious goal of transformational change on the prosperity of more than one million farmers in more than 10 countries by 2030, the combined USD $1.5m kick-off funding from JDE Peet’s, Melitta Group, Mother Parkers’ Coffee & Tea, Nescafé, Nespresso, ofi (olam food ingredients), Rabobank and Westrock Coffee Company, is a response to the bold challenge laid out by GCP for the entire sector to ramp up collective action to fully unlock coffee’s potential as socio-economic motor and a nature based climate solution.

GCP Collective Action Initiatives in countries such as Brazil, Vietnam and Uganda have already shown that alignment on priorities and building on local knowledge and structures allows efficiency gains and business critical collective solutions. GCP 2.0 scales these successful models of co-investment through entrepreneurial country programs, developed with multi-stakeholder Country Platforms in initially six countries. Thanks to global and local co-investments, and larger public agencies and philanthropic co-funding, GCP 2.0 aims at ensuring the viability of sustainable coffee while delivering measurable progress on living income towards the GCP 2030 Goal.

Annette Pensel, GCP executive director, said the kick-off funding enables GCP to grow, attracting new talent and further revenue, including public co-funding that is key to accelerate the first six entrepreneurial country programs to investment-ready levels and support the development of aligned measurement in the form of GCP Country Reports. “GCP Members are united in the belief that coffee sustainability is a shared responsibility. We are grateful that these eight GCP Members have stepped forward with this initial round of co-funding which is crucial to generating adequate level of investment and change.”

The GCP 2030 Goal aims to close the living income gap by at least 25 percent for more than one million smallholder farmers in more than 10 countries by 2030. The focused local collective actions in coffee producing countries together with local stakeholders, are complemented with a global drive to increase sustainable sourcing.

“Collective action is essential to not just ensuring compliance but also accelerating measurable sustainability at scale to bring solutions to over one million smallholders who grow the coffee we all love,” explained GCP board chair, Carlos Brando.

Kloth & Köhnken Teehandel GmbH

Kloth & Köhnken Teehandel GmbH offers fine teas, sophisticated formulations and flavoured/scented tea innovations and has espoused sustainable values since its formation. It believes that sustainable actions cannot be decreed, rather it is a learning process.

FairBioTea (fairbiotea.de) is a private sector initiative focused on the development of healthy and sustainable, fair and ecological tea production operations and tea industry. Through its FairBioTea development partnerships, Kloth & Köhnken actively supports Chinese tea farmers who are growing sustainably and improving their quality management.

Since 2007, together with selected tea gardens, Kloth & Köhnken has been helping to make farming more ecological, transparent and sustainable. The company is especially proud of its longstanding cooperations in tea-producing countries where its partners dictate the pace at which they adopt environmentally friendly practices. Through FairBioTea, Kloth & Köhnken establishes a fair and reliable framework for transparent, sustainable tea production, culminating in a premium product.

Image: Kloth & Köhnken Teehandel

Most teas Kloth & Köhnken purchases are certified (Rainforest Alliance, Fairtrade, organic and Fairbiotea). Its certified products exceed the EU organic regulations, and their cultivation also encompasses land use and nutrient cycles, which in the long term will help preserve soil fertility.

Additionally, for more than two years, Kloth & Köhnken’s sustainability team has been working to implement all requirements for the new German due diligence law and for the European regulations to come. This includes the Code of Conduct, which defines internal company requirements as well as minimum standards for environmental, social and ethical obligations. The Code of Conduct is the basis for developing a business relationship with Kloth & Köhnken, which supports companies that take care of their business sustainably, treat their employees well and protect the environment.

Furthermore, under the motto ‘K&K Goes Green’, the topic of sustainability will become more of a focus for Kloth & Köhnken and internal processes will be optimised and made more efficient. This includes asking all employees for suggestions and ideas and raising awareness for a more sustainable way of living.

Neumann Kaffe Gruppe (NKG)

We all know the coffee industry is facing major challenges. But we are convinced that joint efforts can lead to the right path. To embark on this journey and live up to our responsibility, NKG has developed our NKG Responsible Business Program (RBP), which builds the framework for our group’s sustainability efforts.

To achieve the goals of the RBP and secure the future of coffee, we undertake a variety of efforts within NKG and in partnerships with NGOs, governments, customers, banks and others. Our efforts start where our beloved coffee comes from and where we most urgently need to fight for its future: on the ground. Through our global network covering 26 countries, NKG’s diversified sustainability efforts reach down to farm level to create sustainable supply chains benefitting everyone contributing to our daily cup of coffee. More than 250 employees worldwide work on solutions to tackle global as well as local challenges.

We believe that there is no one-size-fits-all solution for sustainability! Therefore, our efforts range from global initiatives to local projects. Our global initiatives are NKG Verified, our program for sustainable coffee supplies to green buyers, and NKG Bloom, our program for sustainable livelihoods. Through NKG Bloom, we identify and provide the services producers need to address their key challenges and make coffee farming an attractive business for them and their families. We invite you to share your thoughts with us! Together, we must take responsibility today and build a sustainable coffee industry for tomorrow.(Contact our Sustainable Business Unit in Hamburg, Germany: sustainablebusiness@nkg.coffee.)

Sustainable Business Practices

Finlays

As sustainability continues to rise up the agenda in the tea and coffee industry, Finlays is sharing lessons it has learnt from its recently-concluded five-year sustainability strategy. A leading global B2B supplier of tea and coffee ingredients, Finlays is aiming to encourage healthy debate within the tea and coffee world about the challenges of delivering against sustainability commitments in the industry.

The lessons, compiled by group head of sustainability Joe Yalley-Ogunro, reflect candidly on Finlays’ Sustainable Future strategy. While the report details strong progress in some areas, such as achieving 100 percent traceability in tea, 97 percent traceability in coffee, and reducing Scope 1 and 2 carbon emissions by 34 percent since 2018, it also underlines areas where Finlays fell short of its targets.

“Globally, the subject of sustainability has never had a higher profile, but the sustainability challenges our industry faces have also never been more complex. As we start to deliver our new sustainability strategy, we hope that sharing what we have learnt –and how this is shaping our future approach –is useful to others who are facing the very same challenges,” explained Yalley-Ogunro.

Rekerdres & Sons

Rekerdres & Sons is a third generation Dallas-based boutique insurance agency specialising in insurance for the commodity trade. Over 15 years ago, ‘Reksons’ saw a correlation between lower client losses and clients conducting soft commodity trading under sustainable principles. To test this, Reksons led a two-year loss ratio study, in which it confirmed that careful and motivated origin producers applying the principles of counting, training, and tracing from the interior outward radically reduced losses such as water, contamination, theft, and infestation. Thus, sustainability in the coffee supply chain actually leads to an improved state of risk which mutually benefits both merchant clients and insurance companies.

Rekerdres offers financial recognition for businesses that have adopted sustainable AG practices. Image credit: Rekerdres & Son

Due to this discovery, we developed our ‘Green Dividend’ Program in 2008. The Green Dividend is a financial recognition for merchants who have adopted sustainable AG operations within the tenants of sustainability. Thus, participants must implement programs where they train their producers, count their stocks, and track their coffee as it moves through the supply chain. Participating policyholders then designate a foundation or beneficiary to receive the annual dividend from Reksons and our participating underwriter with the intent to further improve sustainability. As the Green Dividend encourages best practices, which thus reduces client claims, everyone comes out on top.

Interested companies should contact Rekerdres & Sons to find out more about our exclusive “Green Dividend” and how to better both the planet and your business.

Sustainable Machinery & Packaging

Modern Process Equipment 

MPE, a global leader in dry bulk solids conveying solutions, has a new line of advanced power-saving innovations called Green Knight Energy Reduction Technology (ERT) for Chain-Vey®tubular drag conveyors. MPE’s R&D teams developed new software and sensor integrations to reduce the energy consumption of Chain-Vey conveyors. The Chain-Vey line of Green Knight ERT engages automatically and preserves the same rate of product flow. No reduction of conveyance throughput is experienced by operators. In addition to the electricity savings, the ERT reduces system wear on conveyor components.(Visit mpechicago.com for more information.)

Scolari

The growing environmental concern has also involved the coffee industry. Besides sustainable cultivations and environmentally friendly packaging, we need to put more effort into reducing CO2 emissions when producing coffee by abandoning fossil fuel in favour of renewable sources.

Scolari Engineering, based in Milan, Italy provides fully integrated coffee roasting manufacturing systems for consistent quality and lower production costs. The company’s e-Roaster is the latest generation of hybrid roasters moving to renewable energy, benefiting the environment. Moreover, it increases efficiency thanks to the smart heat recovery systems based on the concept of green coffee preheating synchronized with the roaster cycle.

The planet is increasing the share of electricity produced with renewable sources (photovoltaic systems, wind farms, and hydropower plants). And in some countries, the amount of electricity available is already higher than that of natural gas. Furthermore, hydropower sources are undoubtedly the cleanest in terms of pollutant emissions.

Scolari’s e-Roasters use electricity alternatively to natural gas during the first heating stage, thanks to a set of heating elements. The result is a significant reduction in carbon energy released into the atmosphere. In addition, using electricity from renewable sources allows us to be more sustainable. Effects that we add to our sustainability report.

Scolari preheater Image credit: Scolari Engineering

In terms of consumption, Scolari’s e-Roasters are fitted with a heat recovery system for preheating green coffee. This technology reduces 25 percent of the system’s energy needs without affecting quality. Fewer emissions, less consumption, more efficiency. Moreover, the recovered heat can be used in other processes such as in-absorption refrigerators to quickly cool toasted coffee beans and preserve the aroma, or in buildings’ heating and air conditioning systems.

The e-Roaster technology will make Scolari’s hybrid roasters stand out in the future. It can also be used for retrofitting existing systems to reduce their environmental impact and produce coffee in a much more sustainable way.(For more information contact, visit: Scolarieng.com.)

Tecpacking Group Co, LTD

Packaging plays a vital role in the sustainability of the tea industry. It is crucial for tea companies to explore alternative packaging solutions that are eco-friendly, recyclable, and reduce waste generation.

Tecpacking has responded to the sustainability challenge by introducing its revolutionary Eco Mesh product. The EcoMesh is an innovative packaging solution designed specifically for the tea industry. It combines the benefits of sustainable materials and a functional design to provide a superior packaging option. The Eco Mesh is made from biodegradable and compostable materials. This ensures that the packaging does not contribute to the accumulation of plastic waste and reduces the environmental impact associated with traditional packaging materials. (For more information, visit: tecpacking.com.)

Tecpacking has introduced its Eco Mesh, designed specifically for the tea industry. Image credit: Tecpacking

Certification

Demus SpA

Demus SpA has been operating since 1962 in the field of decaffeination, dewaxing, vaporization and detoxification of green coffee, as well as in the production and sale of natural raw caffeine.

Since its founding, many things have changed, not only in company terms with industrial expansions, new decaffeination methods (water process), analysis laboratory and acquisition of new neighboring areas; the market has really changed, moving towards sustainability strategies, with the need to improve environmental performance and safety. With this in mind and in line with market demands, Demus SpA began its certification process in 1999 with the obtaining of the following certifications: ISO 9001 -Quality Management System, ISO 14001 -Environmental Management System, OHSAS 18001 which was transformed into ISO 45001 -Occupational Health and Safety Management Systems, and FSSC 22000 -Food Safety Certification, ISO 50001 -Energy Management Systems.

Through the certification processes, Demus has developed a concept of:

• Corporate environmental sustainability: we contribute significantly to combatting environmental challenges and climate change, reducing consumption and pollution emissions, using renewable energies (a photovoltaic system was recently installed), limiting water consumption (important in this time period) and carefully disposing of waste. Furthermore, circular economy solutions are adopted as evidenced by the “Best performer of the circular economy” promoted by Confindustria, the main representative organization of Italian manufacturing and service companies;
• Social sustainability: dealing with occupational safety, workers’ rights and equality and social justice. Thanks to the voluntary Rainforest Alliance certification which deals with sustainable agriculture and has allowed Demus to create a ‘sustainability policy’ with the implementation of a system based on meritocracy and equity, without differentiation of gender, origin and religion.

The religious theme is also addressed with the Halal religious certifications, for countries of Muslim origin and Kosher for countries of Jewish origin. For Demus, the well-being and inclusion of the personnel working in the company is an important topic in which to make investments. For this reason, at the beginning of this year, Demus SpA joined the WHP program (Workplace Health Promotion), promoted by the World Health Organization, the implementation of effective good practices in the field of health promotion. Various initiatives have already been implemented such asatraining campaign on health and eating and a campaign for the renewal of tetanus vaccinations promoted.

Economic Sustainability: which concerns the ability of an economic system to produce income and work in a lasting way and is the basis of sustainable development. Demus also complies with this aspect with investments in innovation, technology and digitisation of processes, applying a very punctual policy on the price of the decaffeination service, always taking into consideration the current economic situation.

• Aubrye McDonagh Leigh

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Efforts at Origin

Partners Coffee, the Brooklyn-based specialty coffee roaster, has sourced its coffee from producers it knows and trusts, from the beginning, recognising its responsibility to foster a sustainable supply chain that ensures quality coffee for consumers and quality of life for the farmers.

It aspires to purchase from the same producers and communities year after year and to work directly with producers, when possible, to promote mutual, long term success through communication and shared growth.

Partners
redesigned all
its Single Origin
coffee bags to
better reflect its
sourcing ethos.
Image credit:
Partners Coffee

Partner’s El Ramo sourcing project that focuses on the bi-annual buying of coffees from a single municipality in the Antioquia department of Colombia, is one of its long-lasting farm relationships. Owing to the strength and resilience of this supply chain, Partners were able to relaunch El Faldón in June 2023, a seasonal single origin offering from one of the producers of El Ramo.

Clipper Tea, based in the United Kingdom, has purchased more than USD $7 million of Fairtrade premium teas to date and is certified organic – limiting the use of harmful pesticides and chemicals used and ensuring it employs a more holistic approach to farming practices that are kinder to the environment. Like Fairtrade, Clipper is on a mission to raise awareness of the benefits of natural and sustainable farming for the planet.

Remedy Kombucha’s Responsible Sourcing & Ethics policy ensures that Remedy and its suppliers uphold laws and regulations regarding modern slavery, labour, health and safety and the environment. The Australia-based company knows where every ingredient in all its drinks comes from, right down to the live culture (also known as SCOBY: symbiotic culture of bacteria and yeast).

This traceability is key, not only for minimising environmental impact, but it is also becoming increasingly important for today’s consumer, who wants to know where the food and drink that they are consuming is coming from and are concerned with ‘clean labels’.

Image: Remedy Kombucha

In its 2022 Drink Well. Do Good. Corporate Responsibility Report, Keurig Dr Pepper outlined its 2022 achievements and its targets for 2023. Firstly, in 2021, KDP committed to support regenerative agriculture and conservation on 250,000 acres of land by 2030. Reporting progress for the first year, KDP achieved 11,296 acres in 2022. It also maintained 100 percent responsibly sourced coffee and cocoa in 2022 and was named the largest buyer of Fairtrade Certified coffee in the world for the 13th consecutive year.

KDP also remains committed to sourcing 100percentof its electricity from renewable sources by 2025. The company reported reductions in overall emissions, facilitated in part by purchasing 74 percent of electricity from renewable sources (up from 62 percent in 2021).

In the Community

With the wellbeing of their tea community being a top priority, Canada-based DAVIDsTEA joined the Ethical Tea Partnership (ETP), a global membership organisation that is catalysing long-term, systemic change, to benefit everybody who works in tea — especially people in tea-producing regions. Additionally, DAVIDsTEA has increased its collection of Fairtrade Certified teas by 125 percent by 2022.

DAVIDsTEA has also launched impact initiatives to further its work to create a more inclusive and diverse tea community on a local level. The brand collaborated with Tea Horse, a woman-led, Indigenous-owned artisanal tea company, to create a specialty co-branded tea, called Manoomin Maple. DAVIDsTEA also partnered with the Jun Chiyabari Tea Garden, the sourcing location for their Organic Nepal Black Tea, to address the need for clean drinking water in government schools in Nepal. Since March 2022, one percent of proceeds from Nepal Black contribute to this Nepal Clean Water project. The scope of the project now encompasses four schools making clean water accessible to over 3,200 children and staff.

Image: DAVIDsTEA

Organic herbal tea company, Pukka Herbs, has partnered with Energy Garden, a ‘community benefit society,’ to power its UK sites with 100 percent renewable electricity from community energy projects in the UK.

Pukka has signed on to a two-year power- purchase agreement, whereby the electricity required to power Pukka’s head offices in Keynsham near Bristol and warehouse, Quadrant, will be 100 percent bought from and provided by community energy projects.

Energy Garden is a ‘community benefit society’ that supports communities to install and maintain gardens on railway stations across London to bring green space back into the city. The revenue generated by the sale of community- owned renewable energy, such as that sold to Pukka, funds these gardens, as well as education programmes.

In addition to the cost per kWh that Pukka will pay for electricity, Pukka has also committed to paying a social premium each year, as well as making an upfront donation before the contract’s initiation.

Furthermore, Pukka also has a commitment to net zero carbon emissions by 2030 and is one of the 500 B Corps that pledged to achieving this goal in Madrid at COP2025 in 2019.

Pukka and Energy Garden will collaborate on the creation of herbal education modules for the Energy Garden Schools Programme, which focuses on engaging and educating children at Key Stage 2, 3 and 4 levels in and around London on energy and environmental issues.

Image: Starbucks

Starbucks is developing a new sustainability learning and innovation lab at Hacienda Alsacia – the company’s global agronomy headquarters for research and development, located in Costa Rica.

The lab will offer the first wave of educational programming to select Arizona State University (ASU) students and Starbucks partners. The first wave will leverage ASU’s leading educational technology and world-class faculty to enrich the student experience, including study abroad opportunities.

As a company that buys 3 percent of the world’s highest quality and ethically sourced Arabica coffee from more than 400,000 farmers in more than 30 countries, Starbucks understands its future is inextricably tied to social and environmental challenges. The company has a longstanding commitment to work alongside communities to become a resource positive company, including cutting its carbon, water and waste footprints in half by 2030.

Starbucks and ASU have a long-term partnership of working together to build educational and innovative programming. Most recently, Starbucks and ASU reached a milestone of graduating more than 10,000 partners through the Starbucks College Achievement Program.

Melitta North America, a division of Germany-based Melitta Bentz, has launched its 2023 One Million Tree Challenge through American Forests. For every dollar donated, a tree will be planted in the US by American Forests, and Melitta has committed to match each donationplaced on its website until the goal is reached.

Throughout its more than 20 year partnership with American Forests, Melitta has planted over 600,000 trees in landscapes across the country, helping to reduce the effects of climate change by restoring 4,000 acres of forest and absorbing 6,161 metric tonnes of carbon dioxide annually. A single tree can capture 3.5 pounds of air pollutants – like ozone, dust and particulate matter – per year.

Progress in Packaging

To further highlight Partners’ single origin programme, the company redesigned all Single Origin coffee bags to better reflect its sourcing ethos. Now that it has made the move from kraft bags to the new off-white single origin bags, Partners’ entire line up of roasted-to-order coffee comes in packaging that is eligible for Savor’s R&R Reprocess and Repurpose programme. Customers can bring these back to Partner’s – the bag material and tin ties, once returned, are then sent back and given a new life by Savor’s partners in California and Minnesota.

Partners has also expanded its product line and is offering sustainably packaged coffee where possible. For example, it expanded into instant coffee in 2021 and chose a supplier that was able to provide the company with biodegradable sachets and fully recyclable boxes. Its Rockaway Cold Brew pouches are also biodegradable, and because they are extremely lightweight, have a much smaller carbon footprint than shipping canned or bottled cold brew liquid.

Image: Clipper

Clipper has brought a ‘world first’ to market with its unbleached, plant-based, non-GM, and fully biodegradable tea bags. It is working on several upcoming green packaging options, such as reducing its packaging weight and improving its recyclability. Clipper’s target is to ensure its packaging is 100 percent reusable, recyclable or compostable by 2025 and it is confident that it will be able to meet that.

Much of the Remedy range is already sold in infinitely recyclable can format, and it is committed to incorporating recycled and/or renewable content in more than 50percentof its products by 2025. In 2022, Remedy UK bottles moved to 50 percent RPET, saving Ca 5 tonnes a year, plus Remedy has removed carbon from black PET lids. The company aims to reduce packaging weight and optimise packaging material efficiency in more than 50 percent of Remedy products.

DAVIDsTEA’s sachet bags are entirely plastic-free and biodegradable. The brand has recently introduced new compostable mailers to replace boxes with excess packaging materials and introduced new wholesale sachet packaging with compostable overwraps, as of late last year, which are currently being introduced through its wholesale channel.

Kiss the Hippo was launched in 2018 with a dedication to bringing high quality, ethically sourced and sustainably roasted coffee to the UK and beyond. With that in mind, it developed its own home compostable Nespresso-compatible coffee pods, which, like the whole brand, are entirely carbon negative. They are 100 percent plastic free and biobased, offering specialty grade coffee in a recycled and recyclable packaging. Further, its cold brew is served in RTD cans that are plastic free and infinitely recyclable.

In-HouseTargets

Remedy’s new state of the art fermentary continues to follow the same traditional brewing methods, with significant investment in sustainability. Thanks to 2,000 solar panels on the building’s roof, production is powered by renewable energy throughout the day. Organic waste (including tea, ginger and SCOBY) is processed to produce organic fertiliser. Rainwater is also harvested for appropriate grey water use.

Remedy has a comprehensive sustainability strategy in place and is committed to achieving identifiable goals by 2025. This includes sourcing 50 percent of its energy from renewable energy sources, diverting more than 50 percent of solid waste generated at its manufacturing facilities from landfill, and reducing its water usage by at least 25 percent.

Nestlé has published its 2022 Annual Report alongside its Creating Shared Value and Sustainability (CSV) Report.As part of its focus on ‘Good for You’, Nestlé strives to be an industry leader in bringing tasty, balanced diets within reach for people around the world. Nestlé has benchmarked its products against the Health Star Rating (HSR) system, a nutrient profiling system used by the Access to Nutrition Index. The results show that Nestlé products,with an HSR rating of 3.5 stars and above, account for close to 60 percent of the company’s sales. The company has committed to setting a global target for the healthier part of its portfolio.

As part of its ‘Good for the Planet’ work, Nestlé further reduced greenhouse gas emissions to below its 2018 baseline. It is now well beyond peak carbon. Nestlé is tackling the emissions within its own operations head on. For example, it increased its use of renewable electricity last year and is on track to achieve 100 percent renewable electricity by 2025.

Image: Melitta

Several years ago, Melitta’s installed solar panels at its coffee roasting facility in Cherry Hill, New Jersey. The plant’s solar panels have an estimated annual environmental benefit equivalent to the planting of 50,942 trees, the conservation of 367,425 gallons of water and the removal of 1,017,767 pounds of CO2 from the earth’s atmosphere.Starbucks has certified its 3,508 Greener Stores globally, expanding the programme to 20 markets, with many first-in-market Greener Stores across Asia Pacific, Europe, the Middle East and Africa, and Latin America and the Caribbean.

Starbucks has certified its 3,508 Greener Stores globally, expanding the programme to 20 markets, with many first-in-market Greener Stores across Asia Pacific, Europe, the Middle East and Africa, and Latin America and the Caribbean.

Starbucks Greener Stores Framework, co-developed with the World Wildlife Fund, includes a set of 25 performance-based standards across environmental impact areas such as energy efficiency, water stewardship, and waste diversion. Some stores have obvious elements like solarpanels or water recycling tanks. While others have less obvious features behind the counter like high efficiency appliances, low-emitting paint and sealants, recycling tampers, and energy efficient HVAC temperature systems.

In the US, Starbucks Greener Stores practices have saved the company almost USD $60 million in annual operating costs, including 30percentwater savings and 30percentenergy reduction when compared to historic store practices. In markets around the world, Greener Stores energy and water savings and waste diversion help advance the company’s goal to reduce carbon emissions, water usage and landfill waste by 50 percent by 2030.

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Within the specialty tea segment, loose-leaf tea has its advocates, yet tea bags remain a popular and convenient way in which most tea consumers will brew the beverage. However, with 68 percent of consumers drinking tea every day in the UK alone, 21 percent of whom drink between four to five cups a day, according to Statista, this mass consumption of single-use tea bags produces significant amounts of waste, much of which ends up in landfills. As consumer awareness of this builds, the pressure on tea brands to ensure sustainability within their operations is paramount, hence manufacturers must continue to meet the rapidly growing demand for sustainably made tea bags.

Tea bags are commonly made of bleached paper, plastic or nylon, and sealed with glue, resulting in a product that will not fully biodegrade and can contribute to the contamination of soil and waterways with microplastics. Fortunately, there has been much innovation in recent years, with many manufacturers making the switch to compostable bio-plastic-based materials, known as PLA (polylactic acid), normally made from corn or sugarcane, rather than petroleum.

Clipper Tea was among the first to make the switch in 2018, bringing to market its “world first’ unbleached, plant-based, non-GM, and fully compostable tea bags,” said Adele Ward, marketing director, Ecotone UK, Clipper Tea’s parent company. Clipper was driven by the ethical and sustainable principles it was founded on to make the change with its tea bags, but customer demand has also incentivised others.

Taylor Clayton, sustainability impact manager at Traditional Medicinals, commented, “While the launch [of its BPI-certified compostable tea wrapper] was partially inspired by the company’s vision to be a leader in finding solutions to plastic waste, we did also [consider] the feedback of our customers who feel just as passionately as we do about protecting the environment.”

Image: Traditional Medicinals

Tecpacking, while manufacturing tea bag packing machines, also produces tea-bag packing material, most of which are PLA-based and compostable, and Paul Zhang, sales manager, Tecpacking, revealed that while there was certainly some demand from customers, the company felt that it was how different industries were moving forward. “Tecpacking is committed to driving sustainable solutions to ensure that the company is directly an enabler within sustainability, so we promote the compostable material to our customers,” said Zhang.

The costs of converting

Whether companies make the switch due to customer pressure or their own sustainability principles, the demand is undoubtedly there, especially among “boutique and eco-conscious tea drinkers and tea brands,” which is where One Earth’s managing director, Erin Heryford, has noted the increase. One Earth manufactures its tea bag material in the US from non-GMO sugar cane, using a dry process so there is no waste water or water contamination, further reducing the impact of its tea bags on the environment. The eco-conscious may be driving the change towards compostable tea bags across the industry but the demand is widespread and increasing in enthusiasm.

The PLA-based compostable tea bag material used, is undoubtedly strides ahead of the conventional wrappers containing petroleum-based plastic, in terms of sourcing, waste, and consumer health, but there is still progress needed. Tecpacking’s and One Earth’s tea bag wrappers, as well as the wrappers used by Traditional Medicinals and Clipper, are only fully compostable in a commercial or industrial facility, rather than at home in a garden compost bin. Unlike biodegradability, which is a natural process where microorganisms degrade materials into simple components like biomass, carbon dioxide and water, compostability requires human intervention to contribute water and oxygen for the materials to fully break down.

“BPI-certified packaging – or packaging that meets the most stringent standards for biodegradability and eco-friendliness – requires ‘industrial aerated composting’ to fully breakdown, and this composting process only happens in a commercial-scale composting facility. In the simplest terms, in order to ensure a product truly breaks down and returns to the earth, leaving no harmful residue behind, it must be industrially composted,” explained Clayton.

In landfill, the material will break down faster than wrappers containing plastic but will still produce harmful GHGs (greenhouse gases) as a byproduct it breaks down, whereas in an industrial composting facility, the conditions are optimised for the material to break down efficiently, minimising GHG production, as well as producing a saleable product as a result: compost, farm fertiliser, or biogas. Therefore, the sustainability of the PLA-based tea bag wrappers is unavoidably reliant on the manner of which its end consumer is willing or able to dispose of it. Most consumers do not have access to industrial composting facilities, or if they do, lack the willing or awareness to separate out the conforming items. In the US, only 15 percent of consumers currently have access to an industrial composting facility, according to Clayton, and in the UK, where the figures are better but still low, almost half – 160 councils, covering 11.7 million households – of local authorities do not provide any food waste collection for their residents.

“We acknowledge that, due to limited availability, industrial composting is somewhat of an imperfect solution, however, it is the only viable option for breaking down compostable packaging at scale. We strongly believe that this is a waste solution that we should support and advocate for, and we feel that we are leading by example with the launch of this BPI-certified tea wrapper,” said Clayton, adding, “it is our hope that as more and more companies take a stance like us on the importance of industrial composting, that more and more facilities will become available.”

Having the necessary infrastructure and end-consumer awareness are not the only challenges facing bio-based tea bag material producers and tea brands. Like with so many other food and drink packaging formats, “The main challenge with compostable wrappers is finding a packaging material that effectively protects the stability of the ingredients within while also meeting biodegradability standards,” commented Clayton.

There needs to be a balance between the material being food-safe and non-detrimental to the shelf life of the product, to minimise food waste, while simultaneously being sustainable and biodegradable, to which there is seemingly slim overlap. Ward added, “It’s not an easy (or a cheap) switch. The challenge is sourcing an effective sealant that will prevent the two sides of the paper from separating and releasing the tea leaves into the cup. Clipper’s compostable heat-seal tea bag was the result of an extensive period of detailed trials and material sourcing.”

Once the appropriate material is found, the challenges do not stop there; “the traditional plastic envelope material is soft and flexible, but compostable material is a bit harder and difficult to form,” explained Zhang, and therefore the packing machine used needs to be adapted accordingly, requiring a high capital expenditure, which is a hurdle for large companies, but possibly an insurmountable barrier for smaller companies.

Image: One Earth

This is something One Earth recognises; “We work with some co-packers so that the One Earth tea and coffee filter material can be accessible to smaller tea brands,” shared Heryford, a move which is necessary for the industry as a whole to progress sustainably.

The cost of the wrapper material itself is also higher, as Clayton revealed, “Increased costs are mostly due to the use of novel, bio-based materials, such as the PLA layer in the wrapper. The bio-based inputs include more processing steps from farm to manufacturing.” But the costs should come down as it is more widely produced and used.

“Compostable tea bag material has still not captured the mass share of the market,” said Zhang, likely due to the manufacturing, disposal and cost challenges given, and until it does, manufacturers and consumers are having to absorb the additional costs associated with making the sustainable choice.

Challenges remain

Tenacity is undoubtedly necessary on the journey towards sustainability, and while there may still be numerous challenges associated with biodegradable tea bags, they are being met with innovation and persistence. Zhang explained that Tecpacking has “three points to do in the future: first is to try our best to work with our raw material suppliers to make good compostable material, second is to improve our machine to make it suitable and easy to run the compostable material, and third is to recommend and promote the compostable material to all of our customers, to try to make 100 percent of [our] customers use compostable material.” He noted that Tecpacking is a global company operating in local markets like Sri Lanka, the Netherlands, and the US, with different partners. “Our sourcing is within the local communities, and we drive the empowerment of these local communities,” as sustainability is about people as much as it is about resources.

Meanwhile, One Earth has a research lab in Naples, Florida, where it continues to develop its compostable and biodegradable products. With Traditional Medicinals’ global advocation of sustainable materials to its customers, and Clipper’s holistic approach to reduce packaging weight and improve recyclability, strides are being taken to counter decades of willful indolence by manufacturers and consumers alike.

Matching the innovation with the infrastructure and awareness needed remains a challenge, as, even if PLA packaging becomes widespread, there need to be means by which consumers can dispose of it in a way that makes the sustainability efforts of the manufacturer worthwhile. Although, it could be argued, that placing almost the full responsibility of the sustainability of a product on the consumer, rather than on the manufacturer which produced the product in the first place, may be a misdirection of accountability, and unsustainable in the long term. However, most will agree action is needed along the entirety of the supply chain, all the way to the consumer, to drive lasting and necessary change.

• Kathryn Brand is an associate editor on T&CTJ, while still writing for several of Bell’s other magazines. She joined Bell Publishing as an editorial assistant at the beginning of 2022 after graduating from the University of East Anglia with a degree in English Literature and Creative Writing. She may be reached at: kathryn@bellpublishing.com.

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As the global tea market continually becomes more sophisticated, tea-packaging tech is following the same path. Helping tea manufacturers meet the demand for more sustainable, environmental-friendly packaging is one of the critical challenges in the present time, and yet there are several other vital goals that must be chased.

The global automatic tea bag packaging market is expected to see a 4.9 percent average growth through 2026, owing to surging tea production and consumption in the coming years, primarily in the emerging economies of India and China, forecasted Mordor Intelligence (MI), an Indian think tank.

Packaging has a significant role to play in the expanding tea market as it not only protects and preserves the product within but also enables brand communication. It is perceived to be almost as crucial as the selection of the tea product itself and is a driving factor for the increasing versatility of tea packaging, with luxury aesthetics and smart carton design at the forefront of consumer attraction, MI analysts stated.

“Consequently, the packaging equipment manufacturer must explore long-term investment opportunities in versatile and adaptable packaging equipment to increase output, reduce labour costs, and maintain a foothold in the market,” per MI.

Among the key vendors in the tea packaging market, the MI study lists Teepack Spezialmaschinen GmbH & Company KG, Selo Group, Xiamen Sengong Packing Equipment Co Ltd, Liaoyang Conoval Machinery Co Ltd, ACMA SpA, FUSO International, IMA Group and Sammi Packing Machine Co Ltd.

All tech suppliers tend to shape up their offer in their own way, but there are some common trends everyone in the industry clings to.

Individually tailored solutions

Teepack recently presented a new model of the Constanta machine family – a highly popular tea-bagging line. Mario Kuhn, Teepack’s sales and marketing manager, disclosed that the company kept the characteristics of the old Constanta by being a rugged, reliable machine that does what it is supposed to do: producing good tea bags around the clock.

In addition, Teepack added flexibility by implementing a platform approach using standardised modules and connecting points. “If the machine is delivered in a certain configuration, it is easily upgradable and amendable in the field. For example, the version with a speed of 180 bags per minute (BPM) can be rebuilt in the field into the 250 BPM version,” Kuhn said.

“The same goes for envelopes: if your machine is equipped to produce heat-sealed envelopes, the machine can be upgraded in the field to produce also crimped paper enveloped bags. This benefits a customer in that the machine can grow with their requirements and allows them to react flexibly to new market developments, without having to buy completely new machinery,” he explained.

This approach also allows Teepack customers to use a multitude of consumables. The customer can decide which modules fit into the slots for consumables, so that they can produce with their current supply. The customer can choose from a total of 1320 possible configurations: two bag sizes, two types of envelopes plus naked bags, two speed versions and three types of removal options are just a few of the options available.

“We are especially proud of our newly developed pre-grouping system for the Constanta. The ejection chute is formed in a way, that an empty box can be put in front of the opening and the pusher pushes the stack into the box. With that innovation, the speed of 250 bags per minute can be operationally used without having to acquire additional staff. For the mature markets, a box erector with filler and lid closer is available, further automating the process if so desired,” Kuhn said.

With Industry 4.0 pushing network-centric connectivity, Teepack is currently looking into how to best apply these new and exciting opportunities for the benefit of its customers. Integrating the machines into a network and presenting the machine’s data in an easy-to-understand way helps to further improve reliability and profitability. Virtual reality is also a field in which there is a lot of potential. This technology enables customers to train personnel while being able to continuously produce with their machines, Kuhn explained.

Sustainability seems paramount

The desire to be more sustainable has become a primary concern in the tea bag packaging industry, the MI study has shown. Packaging equipment manufacturers are increasingly adopting automation in their production lines and adhering to sustainable trade initiatives throughout the world.

Nandini Roy Choudhury, client partner of Future Market Insights (FMI), an Indian consulting agency that recently conducted a comprehensive study of the global pyramid tea-bagging market said that the switch towards pyramid-shaped tea bags itself is one of the key consumer trends tech vendors need to address. The growth in this segment in the coming years is expected to outpace the rise in demand in the global tea market.

“Pyramid tea bags have gained popularity as premium tea products for several reasons. First, pyramid tea bags offer a higher quality tea experience compared to traditional flat tea bags. The pyramid shape allows for more space for the tea leaves to expand and infuse, resulting in a better flavour and aroma,” Choudhury said, agreeing that sustainability plays a particularly important role in the tea bagging industry now.

“Consumers are becoming more environmentally conscious and are looking for products that are packaged in a way that minimises their impact on the environment,” Choudhury explained, adding that customers globally are becoming increasingly aware of the impact of packaging waste on the environment. A particularly important factor is that consumers are willing to pay more for products that are packaged sustainably. “Pyramid tea bags that are packaged using sustainable materials and practices are becoming more popular as consumers look for ways to reduce their environmental footprint.”

When it comes to the growing popularity of sustainable solutions, there are several factors in play. Many governments around the world are introducing regulations to reduce packaging waste and promote sustainable packaging practices. This means that tea bag brands that adopt sustainable packaging practices can avoid regulatory penalties and maintain their market share, Choudhury said.

“Sustainable packaging practices can also create opportunities for innovation and differentiation. Brands that use innovative sustainable materials and packaging designs can differentiate themselves in a crowded market and appeal to consumers looking for new and sustainable packaging solutions,” she added.

Different tastes

The MI study disclosed that when choosing tea-bagging equipment not all tea manufacturers seek the same features. For instance, larger manufacturers in developing nations are anticipated to increase their use of tea packaging materials and adopt new packaging technologies to address issues such as contamination, extend the shelf lives of their products, and make them more aesthetically appealing.

Smaller firms in these countries are expected to mechanise tea-packaging processes to expand output and increase efficiency, further boosting tea bag-packaging machinery demand.

Laura Maria, sales area manager with Italy-based IMA Maisa said that the company primarily focuses on providing customers with easy-to-use solutions. “Our machines are very simple to operate with high performance, extreme simplicity, and mechanical sturdiness which are the most outstanding advantages we offer,” she said, adding that customers are also looking for better automation of their packaging lines.

The FMI study further disclosed that sealing is an important field in which a growing number of companies see room for improvement. “Traditionally, heat-sealing has been the most common method for sealing tea bags, but there is growing interest in alternative methods such as ultrasonic sealing, which can offer faster production speeds and reduce the need for adhesives,” Choudhury shared.

MI also said that the demand not just for an individual tea bag but also overwrapping for a tea bag is gaining popularity to preserve freshness, and for those consumers wanting hygienic and premium design. “Thus, packaging manufacturers are [developing] machinery that not only forms the bag but will also wrap the product,” MI analysts disclosed.

Streamlining operations

Manufacturers are designing solutions to make tea-bagging lines more effective. New Jersey-based Munson Machinery does not manufacture tea-bagging equipment, but its mixers are typically positioned upstream of tea bagging and packaging lines, which as explained by Susan Schaaf, office manager of Munson, require totally uniform blends to maintain consistent flavour.

“Because Rotary Batch Mixers continue to rotate during discharge, they prevent stratification and segregation of the batch regardless of disparities in the size, shape or bulk density of ingredients. This is especially critical when filling individual tea bags, since variations in blend ratios are likely to increase as the size of a given sample decreases,” Schaaf said.

While Munson Machinery offers eight types of mixers and blenders, the company’s Rotary Batch mixer design remains the clear preference among tea processors worldwide remains due to its tea-specific performance advantages including: rapid, gentle blending, fast cleaning, and equal efficiency, Schaaf added.

New form, new meaning

Sustainability has truly taken center stage across all sectors, and tea bagging is not an exception, said Viju Vasishta, sustainable materials expert at PA Consulting, which has recently rolled out an innovative product — tea sheets, designed to be an alternative to conventional tea bags. Vasishta said that the product is currently in the prototyping phase, though the company has already demonstrated the proof of principle in terms of performance compared to standard tea bags.

Brand owners will have to make their packaging sustainable, especially for end-of-life purposes such as recyclable and plastic-free, due to both consumer and regulatory pressures, Vasishta claimed. “Currently, some branded tea bags are packaged in foil wrap and other flexible plastic packaging, and the sector needs to be innovative to either fully eliminate the wrap or use alternative sustainable materials which can be recycled,” he explained, adding that paper and pulp are emerging as key substrates across many food and FMCG packaging and a similar movement regarding these materials is seen for the tea sector.

Generally speaking, the tea-bagging sector lacked groundbreaking innovations in the past few decades, Vasishta shared. “Consuming tea should be a moment of joy for the consumer, and we haven’t seen much innovation in the tea-bag market over the last few decades. We see the same format of tea bags with slightly varying shapes, and the consumer experience feels pretty flat,” Vasishta admitted.

“The [coffee sector], for example, has made the concept of coffee into a premium product. The tea sector has not yet reached that level of innovation. There is an appetite for the tea sector to transform itself, but brand owners are risk averse, and therefore, we are seeing low levels of innovation,” he said.

Digitalisation on the horizon

Automation and robotics are already being used in tea-bagging production to some extent, but the industry may see further advancements in this area, particularly in terms of the use of artificial intelligence and machine learning to optimise production processes.

Choudhury assumes that integration with technologies is not limited to automation. “There is already some integration between tea bagging and technology, such as the use of smart labels or QR codes to provide consumers with more information about the tea they are consuming. We may see further integration in the future, such as the use of augmented reality or virtual reality to enhance the tea-drinking experience.”

“Overall, as consumer preferences and technological capabilities evolve, the tea-bagging industry will likely continue to see innovation and advancements in production processes,” Choudhury added.

• Vladislav Vorotnikov is a Batumi, Georgia-based multimedia B2B freelance journalist writing about the tea and coffee industry since 2012.

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