The report, which details key trends in new seasonal beverage flavours and formats across 14 key European markets (including Belgium, Denmark, Finland, France, Germany, Ireland, Luxembourg, Netherlands, Norway, Poland, Romania, Spain, Sweden and United Kingdom), finds that despite the typical need for ‘winter warming’, iced beverages now account for 23% of all festive/holiday season new-product launches — with hot beverages comprising the balance (77%). The Benelux and German markets lead the way in iced beverages, with 50% and 45%, respectively, of launches in those regions. Indulgent brown and spiced flavours remain essential for the holiday season with an increase in iced frappe formats as cold beverages become a year-round menu item.

For Winter 2023, seasonal beverages continue to be a key trend on menus to deliver excitement and novelty for consumers while driving in-store traffic for foodservice operators. Per Kerry’s Art of Taste & Nutrition: Festive Edition, the top three festive trends this year are:

1. Flavour Evolutions: Consumers are craving new and adventurous flavours, but they are wary of spending too much on something they might not enjoy, so they do not want anything that seems too ‘out there’. To meet this need, brands are using well established tastes but getting creative with naming to convey a more exotic and seasonal offering. For instance, instead of simply calling the flavour ‘orange’ the flavour profile has evolved to ‘mandarin’ or ‘clementine’. This has the bonus effect of making the product seem more premium.
2. Warming Seasonal Flavours: Foodservice operators are catering to the season with the addition of warming winter spices and indulgent brown flavours. Joined by the always popular caramel, chocolate and toffee, local seasonal favourites like cinnamon, cardamon and gingerbread enhance the occasion.
3. Delightful Indulgence: The holidays can be a stressful time for everybody so brands are spotting an opportunity to create a relaxing ‘feel-good’ moment in their customer’s day. The report observes a rise in flavoured hot chocolate, mochas and delicious frappes for that added ‘treat yourself’ indulgence. Elevated toppings, such as flavoured cream, delicious sauces and tasty biscuit/cookie and chocolate inclusions, add a sprinkling of festive magic.

In terms of festive flavours, the report, which analysed 250+ 2023 winter beverage launches, shows that similar to the past two years, chocolate still leads the way, with gingerbread a close second:

Top Five Festive Flavours

1. Chocolate (14%)
2. Gingerbread (13%)
3. Caramel (7%)
4. Toffee (7%)
5. Cinnamon (5%)

Past Festive Flavour Favourites 2022 2021

1. Chocolate Chocolate
2. Gingerbread Gingerbread
3. Caramel Caramel
4. Hazelnut Orange
5. Cinnamon Cinnamon

When choosing which type of beverage to be the base for the festive flavours, the latte far outranks other beverages (although it seems odd that the mocha is last while chocolate is the number one flavour since mocha is chocolate and coffee…):

Top Beverage Platforms

1. Latte (47%)
2. Hot Chocolate (22%)
3. Frappe (9%)
4. Hot Tea (7%)
5. Mocha (3%)

However, while consumers may indulge in limited-edition festive flavours during the holiday season, the Art of Taste & Nutrition: Festive Edition also reveals that many consumers are being mindful of their sugar and/or calorie intake.

Commenting on the new report, Daniel Sjogren, vice president of foodservice for Kerry Europe, said, “Our research shows that the shift toward simultaneously enhancing both indulgence and nutrition has influenced menus across Europe this festive season, and in fact far more noticeably than ever before. With many foodservice operators still searching for ways to translate these trending recipe advances into their menus, for the time being this trend is being driven predominantly by leading innovators.”

“The big challenge for foodservice beverage product developers going forward is maintaining appealing, indulgent beverage flavours while also reducing sugar and calorie content,” explained Sjogren. “These sugar-reduction efforts will pay off decisively by also improving sustainability credentials and success in this area. This is particularly helpful in reaching the mainly younger consumers who prioritize sustainability as a key purchase driver.”

To download the 2023 Art of Taste & Nutrition: Festive Edition report, click here.

Whether hot or cold, merry festive beverage indulging! Happy holidays and best wishes for a joyous, peaceful and healthy New Year!

• Vanessa L Facenda, editor, Tea & Coffee Trade Journal.
  Keep in touch via email: vanessa@bellpublishing.com Twitter: @TCTradeJournal or LinkedIn: Tea & Coffee Trade Journal

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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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Taste, unsurprisingly, remains the top driver when it comes to food and beverage choices, but Kerry reports that consumers will be motivated by simplicity, sustainability and meeting their nutrition goals. Yet there will be a rise in unconventional flavour pairings such as sweet profiles in savoury foods including blackcurrant and maple syrup, with a strong interest in provenance, functional ingredients and flavours that tell a story.

According to Kerry, there will be a resurgence in age old cooking practices and heirloom recipes as consumers place more importance on tradition and provenance. Ingredients such as nutritional yeast, ginseng, kombucha, ashwagandha and ancient grains are finding a new home across snack and beverage applications. Ginseng, kombucha, ashwagandha are already popular ingredients in tea, and in the last couple of years, turmeric has emerged as a leading ‘functional ingredient’ in both coffee and tea with a flurry of product rollouts in cafés and on store shelves.

Indulgence will take on a new meaning, with younger consumers in particular seeking mashups of familiar food and drinks that they grow up combined with emerging new flavour tonalities. This trend is augmented by the influence of social media channels such as TikTok and Instagram. This is evident in bubble tea concoctions that are so popular among Gen Z consumers. (See the cover story in T&CTJ’s March 2023 issue).

Kerry also finds that consumers will be actively seeking unconventional combinations of traditional ingredients and emerging taste profiles from other regions, such as Korean fried chicken, mojito beers, Japanese katsu, Greek tzatziki, etc. Consumers’ desire for healthier beverages with functional ingredients such as ashwagandha, hibiscus and matcha remains strong.

As inflation rises and the threat of a recession looms, Kerry notes that consumers will be value-minded but they will still gravitate towards products that allow permissible indulgence. At the NCA Convention earlier this month, speakers – one an economist, another a financial analyst – agreed that the occasional coffee shop/café-bought coffee (and tea) are considered ‘permissible indulgences.’

“Flavours have a powerful way to convey a story — particularly when it comes to consumer trends and preferences. This year we will witness the resurgence of time-honoured traditions and heirloom recipes as consumers crave traditional tastes with new and emerging flavours,” said Soumya Nair, global consumer research and insights director at Kerry. “Comfort still reigns supreme, with peppermints, hazelnuts, chocolates, cheeses, chilies still dominating tastebuds. Whether a nostalgic treat, a comfort dish or a healthy alternative, consumers expect a greater variety of tastes in 2023.” (Peppermint has long-been an extremely popular ingredient in tea and coffee-blended beverages, while hazelnut is also a long-time fan favourite in coffee drinks).

Nair said that through research and insights from its teams across the globe, “we are seeing how trends are travelling the world, with Asian flavours such as cardamom, Japanese miso, gooseberry and hawthorn, reaching Europe and North America, while popular dishes in Europe such as Moroccan tahini and Italian bolognaise are inspiring innovation in Asia Pacific. Consumers are travelling the world through taste and we expect that interest and desire in authenticity to continue.”

I believe I have seen tea with hawthorn in it while cardamom has recently emerged as a popular ingredient in both coffee and tea, particularly in winter menu offerings. Perhaps gooseberry could be the next ‘it’ ingredient for coffee or tea!

• Vanessa L Facenda, editor, Tea & Coffee Trade Journal.
  Keep in touch via email: vanessa@bellpublishing.com Twitter: @TCTradeJournal or LinkedIn: Tea & Coffee Trade Journal

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The latest research into foodservice beverages in Europe from taste and nutrition company, Kerry shows that consumers are seeking flavours that they associate with health and nutrition benefits such as strawberry, lemon and mango, but they also want excitement and a sensory experience through newer formats like frappuccinos and bubble teas. 

The new report, Art of Taste and Nutrition 2022, focused on nearly 400 summer-launched limited time offerings (LTOs) across 12 regions in Europe (Belgium, Denmark, Eastern Europe, Finland, France, Germany, Ireland, Netherlands, Norway, Spain, Sweden, and the United Kingdom), and categorises the top beverage platforms and flavours, while examining future trends and influences across the world. Per Kerry’s research, the top three LTO trends are: 

• Travel through taste: Many outlets this year launched beverages with flavours such as mango, pineapple, passion fruit and coconut to create a tropical island experience for the senses. 
• Natural refreshment: Consumers crave cool, refreshing beverages, with many now focusing on flavours they consider natural and local to the different European regions such as lemon and strawberry. 
• Health and nutrition focus: Consumers are looking to foodservice outlets for healthier options. Nutrition-focused LTO ranges need to deliver not only great taste but also health benefits through fortification and healthy halo ingredients. 

Commenting on the new report, Daniel Sjogren, vp and general manager for foodservice in Kerry Europe, said, “With markets in Europe fully re-opened this summer, foodservice operators find themselves once again competing for consumers attention. LTOs have come back with a vengeance and are more popular than ever. We have found that consumers are looking for exciting sensory experiences, with the rise of bubble tea and drinks that are a visual experience and shareable on social media.” 

He noted that fruit flavours continue to be the core flavour offering for summer LTOs across Europe but with two clear distinctions. “Firstly, exotic flavours have become more prominent in consumers’ minds as they remind themselves of their favourite holiday destinations. However, consumers are also becoming more conscious of their own health and are seeking out flavours aligned to their personal nutrition needs.” 

The top five summer LTO flavours (in the 12 European regions) according to Kerry’s analysis are: lemon, chocolate, strawberry, mango and vanilla, respectively. 

The research found that 99% of consumers preferred iced beverages versus 1% for hot beverages. This is up 10% from 2021, which shows the growing popularity of iced drinks in Europe. 

According to Kerry, the top beverage formats for summer LTOs are: frappuccino (16%), lemonade (11%), iced tea (11%), smoothie (10%) and iced latte (9%), of which 88% were on menus in cafés or coffee shops (followed by 7% in quick service restaurants, 4% in bakeries and 1% in ice cream parlours). 

Looking towards 2023, Kerry reports that sustainable nutrition will continue to gain traction with consumers more concerned with both their physical and mental health post-pandemic and the health of the planet (as was discussed in last week’s blog, Global consumer concerns over climate change and food shortages escalate). Consumers are also more interested in unique menu items, with foodservice operators now having to consider not only taste but look, texture and smell to create a complete sensorial experience. 

“Our prediction for the future is that sustainability along with nutrition will continue to become more important as consumers look for great tasting beverages that are better for them and better for the planet,” said Sjogren. “However, many operators find it challenging to deliver on these evolved trends while also being able to communicate them to their consumers in a meaningful way. 

With summer drawing to a close and autumn approaching in many regions, I’m curious to see what will be the popular LTOs for the fall, aside from the ubiquitous ‘PSL’ (pumpkin spice latte), of course. 

• Vanessa L Facenda, editor, Tea & Coffee Trade Journal.
  Keep in touch via email: vanessa@bellpublishing.com Twitter: @TCTradeJournal or LinkedIn: Tea & Coffee Trade Journal

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Commenting on the partnership, Leigh Anne Vaughan, global strategic marketing director, Taste at Kerry, said: “With this partnership, our customers anywhere in the world can now access and support the distinctive taste of the premium fair-trade coffee produced using high-quality, organic-certified coffee beans from women growers in Sumatra and Peru. Consumers can also be assured that the women responsible for the production of the coffee beans have been compensated directly for their work, and also provided the opportunity and resources to enact positive change in their home communities and on their own terms. Through this partnership, Kerry will be the only company worldwide creating coffee extracts from the beans of Café Femenino growers. Kerry is delighted to partner with the Café Femenino community program.”

Sabina Cecanop, founding president of Café Femenino Peru, said: “We have used the money we’ve received from the Café Femenino premium to invest in improving our homes, providing education for our daughters, and improving the food we feed our families. Café Femenino has been wonderful in improving the self-esteem and empowerment of women in the community.”

As part of Café Femenino’s efforts, local programs help their women farmer members receive payments and payment premiums directly, and assume leadership roles, e.g., in co-op voting and on boards. The members also secure rights to the land they farm to produce Fair Trade Certified and organic-certified coffees. This partnership further strengthens Kerry’s “Beyond the Horizon” sustainability program and showcases the company’s continued commitment to improving the livelihoods of suppliers and their communities.

Since 2003, the Café Femenino coffee program has been an ethical sourcing model committed to ending the cycle of poverty affecting women coffee farmers around the world. For more information, visit; www.cafefemenino.com. 

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This new EU law, published in May 2018, states that flavourings for organic foods and beverages will need to now be at least Natural X Flavourings (95/5 formula structure), with those meeting the new standard permitted to be described as “suitable for organic”. At the same time, flavourings formulated from at least 95% of organic raw materials can be declared as “organic flavourings”. The new regulation may represent a substantial challenge for those food and beverage manufacturing companies that need to reformulate existing products, or those that would like to upgrade their current formulations.

“SimplyNature Organic was developed by leveraging Kerry’s ethical sourcing expertise through our global farmer network. Created using our superior extraction technology and world-class flavour design, this new range captures the excellent aroma and body of the authentic source, eg, citrus, tropicals, berries, coffee, cocoa, vanilla, etc., while also providing a better finish than traditional processing,” said Davide Foà, Kerry’s business development director, Taste, EU & Russia.

“Our latest portfolio of organic certified flavourings and extracts delivers benefits and impacts that are very close to conventional natural flavourings and extracts, with the important exception that they can be labelled as ‘Organic Certified’ — in full compliance with the incoming EU regulations. This enables organic product developers to use these flavourings and extracts without specific limitations, as part of the 95% of the organic product formulation delivering the organoleptic impact that consumers love, in a cost-effective manner.”

“Consumers view organic products as healthier and better for the environment,” explains Christina Matrozou, marketing manager, Taste, EU & Russia. “There are clear and increasing calls for clarification about what ingredients can go into these food and beverage products, and the EU has set upcoming standards designed to strengthen the ‘organic’ claim. Kerry’s SimplyNature Organic range will meet or exceed these ambitious new standards while providing outstanding flavour profiles that product developers and consumers are sure to embrace.”

This new portfolio of SimplyNature Organic certified flavourings, washes, distillates and extracts from Kerry initially covers the major iconic flavours and will evolve and expand over time in line with customer demand. Kerry prides itself on managing the quality — from farm to fork — of all its offerings, and this begins with ethical sourcing through the company’s secure and sustainable global procurement network. It continues in formulation, using Kerry’s long-established expertise in flavour development, and finishes as it works closely with customers in a range of applications, including non-alcoholic, alcoholic and nutritional beverages, dairy and dairy alternatives, ice cream, and any other end uses that require minimal thermic processing.

Two examples of Kerry’s sustainability efforts include the Tsara Kalitao and the Café Femenino sustainability programmes. Under the Tsara Kalitao programme, Kerry aims to support farmers and their families while improving the quality and traceability of the raw materials supplied to the company. Kerry strives to develop local communities in Madagascar in relation to three pillars: the farmer’s livelihood, the empowerment of women, and support for education. Under the Café Femenino programme, Kerry is its exclusive extraction partner in guaranteeing a fair-trade organic coffee extract supply while working to improve the lives of female coffee producers around the world.

The new SimplyNature Organic range complements the rest of the Kerry flavourings regarded as “suitable for organic” — such as SimplyNature Natural X Flavourings, SimplyNature Extracts, and TasteSenseNatural Flavourings with Modifying Properties Suitable for Organic — to deliver an extensive range of options to food and beverage product developers.

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