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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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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The tea and coffee markets in Greece are steadily developing this year despite traditional economic problems of the country caused by high debts and soaring energy costs. In general, drinking coffee is a strong modern Greek tradition, with 95 percent of Greek consumers buying coffee. 

The lifting of pandemic restrictions has provided an impetus for growth for many segments of the Greek national economy and industrial sectors, including tea and coffee, however, a number of serious problems, along with the ongoing hostilities in Ukraine, continues to put a serious pressure on the industry, preventing its more active growth. 

According to global market research firm Euromonitor International, price hikes are currently the main factor that impacted hot drinks sales in Greece. 

Ilaria Abagnale, a senior consultant at Euromonitor, said that coffee manufacturers being unable to absorb costs (and therefore passing on via higher retailing prices to consumers) combined with disposable incomes decreasing has created a significant demand challenge. She said this has negatively affected consumption, since decreasing disposable incomes and higher prices are forcing consumers to cut back on their purchases. 

“Discounting activities have been increasingly being used by retailers as companies seek ways to prevent losses. For example, more companies are introducing economy ranges to appeal to cash-strapped customers,” said Abagnale. “Thanks to these activities, volume sales recorded a mitigate decline for overall hot drinks, as consumers are choosing to migrate to cheaper products rather than avoiding them altogether. However, coffee and tea registered a 0.2 percent and 0.7 percent growth respectively.” 

Greece is attractive to coffee chains 

In the meantime, major global players have been interested in the Greek coffee and tea markets. One of them is Coca-Cola HBC, which in recent years has significantly strenghthened its position in Greece’s coffee market. 

Athina Popof, coffee, premium spirits and snacks director, Coca-Cola HBC Greece & Cyprus, told T&CTJ that the company has distributed the Costa Coffee at-home range, which includes five different propositions of roasted and ground espresso and seven different varieties of espresso capsules. 

“Through our distribution network, we are serving Costa Coffee in independent cafés all over Greece. We are also addressing new channel opportunities with our own close system and capsule solutions,” Popof said. “In 2022, we strengthened our proposition with the launch of Caffè Vergnano, which offers authentic Italian espresso, in Greece, following an exclusive distribution agreement with the family-owned Italian coffee company.” Headquartered in Santena, Italy, Caffè Vergnano is one of the oldest coffee roasters in Italy with roots dating back to 1882. 

Popof noted that it is a super-premium and high-quality coffee that represents Italian heritage and authenticity at its best. “Caffè Vergnano’s products focus exclusively on the HoReCa (hotel, restaurant and café) channel, targeting premium customers. It matches perfectly with our strategic priority to create value and support our customers in this sector.” 

Furthermore, Popof shared that the two brands are highly complementary, which enables Coca-Cola HBC to address an even wider range of consumer tastes and segments. “Caffè Vergnano allow us to recruit consumers loyal to the Italian coffee taste, while Costa continues to be our mass premium global coffee proposition with broad consumer appeal across multiple platforms.” 

“Our focus in 2023 and beyond is to continue building distribution and appeal in these two great coffee propositions. Together with our partners, it is our passion to respond to all our customer and consumer needs with top quality coffee propositions for all occasions,” she explained. 

According to Popof, in general, in Greece, coffee is not just a product, it is part of the culture, and part of daily lives. She added this is also evident by the category growth both in HoReCa and in supermarkets in Greece. On a year-to-date basis, espresso coffee is growing by almost 10 percent, and this trend is expected to continue. 

Popof believes that modern coffee consumers are typically very well informed and have high standards. They are also diverse in their preferences. “This is why we have evolved our portfolio to offer two different brands, each with a unique proposition within the category.” 

Local player Kafea Terra is expanding its interests in Greece, with investments of EUR €6 million over the next two years and a 28 percent stake in the HoReCa market. Owned by local businessman, Yiannis Iosifidis, Kafea Terra, which produces Greek espresso under the Dimello brand and exclusively distributes illy coffee in Greece, is nearing €100 million in sales. 

Although it is estimated that coffee will show a decline in the Greek market in the next five years, Nikos Kougioumtzis, the commercial director of Kafea Terra, said in a press conference that the company plans to continue its expansion, particularly with its flagship Greek Dimello ground espresso, which now accounts for 20 percent in the Greek retail. 

Still, according to some Greek media reports, the ever-rising prices force Greeks to drink less coffee as well as tea. 

In general, the Greek coffee market is characterised by intense competition and saturation, especially in HoReCa segment (with, per Greek business paper, Capital, more than 70,000 bakeries, cafés, restaurants, and hotels throughout the country), which has forced some leading local players to expand in abroad. 

According to Greek Total Business magazine, in recent years many leading Greek coffee chains such as Coffee Lab, Mikel Coffee Company, Coffee Island, Grigoris and Coffee Berry have begun active foreign expansion. 

Economy options

In terms of coffee consumption, annually, at-home consumption is estimated at €300 million, while the out-of-home market reaches €3 billion in consumer prices. In volume terms, consumption hits 40,000 tonnes per year, 40 percent of which is consumed in restaurants and 60 percent at home and in workplaces. Per the Capital, the annual per capita consumption of coffee in Greece is estimated at 500 cups per year. 

According to the Hellenic Coffee Union, ground coffee in Greece accounts for 78 percent of sales, while 18 percent is capsule sales, which have shown growth in recent years. 

Euromonitor noted that given the strong price increases in the coffee category, more expensive segments (such as fresh ground coffee pods) slowed their growth. Since there aren’t many economy options, consumers switched to less expensive coffee categories such as standard fresh ground coffee. Likewise, the value growth in tea (which has been driven by premiumisation) slowed as fewer consumers can afford to purchase premium products on a regular basis. 

In response, retailers have undertaken major discounting activities and allocated more space to economy ranges. For instance, AB Vassilopoulos introduced a new private label coffee in 2022 under the name of Perla. The Perla range is comprised of fresh ground coffee pods (compatible with both Nespresso and Dolce Gusto machines) as well as filter coffee and espresso products. Domestic company, NutCo, introduced the Buon Gusto economy brand; compatible with Dolce Gusto coffee machines. 

Tea, a small market with potential 

Thanks to the healthy living trend and the strong marketing of the wellness and immunity-strengthening benefits of certain types of tea, these categories have attracted a lot of investment from both domestic and international players, leading to greater product variety, and grocery retailers are allocating more shelf space to such products. As such, visibility of herbal and green teas is growing and encouraging more people to purchase it. 

Caffeine-free infusion teas are particularly well-positioned to gain share in Greece as they do not compete with coffee – the most popular hot drink in the country. Instead, infusion teas are positioned to meet different consumption occasions, such as the evening time. The relaxation and sleep aid qualities of infusion teas make them more appealing to consumers and is stealing share from black tea. 

Over the forecast period, the consumption of tea is set to grow due to the expected persistence of the healthy living trend and the increase in product variety and availability. This has resulted in an increase in consumer awareness and attracted new consumers to the category, many of whom will continue to purchase tea in the coming years. Nevertheless, once dynamic, tea’s market penetration is low given the cost of living crisis and because there is not a strong tea drinking culture in Greece, consumers have reduced spending on non-essentials. 

Dimitris Siandris, COO of Lux, a Greek beverage company based in the city of Patras, speaking to Greek media, confirmed consumers’ shift to healthy tea options, including iced tea. “The past year was a pivotal year for businesses in the sector. We have witnessed a shift in the purchasing public to products with high nutritional value that harmonise with a balanced diet. The long-term confinement due to the pandemic and dealing with health issues created a completely different situation, to which we were called to respond in the best possible way”. 

Positive outlook ahead 

Euromonitor analysts believe Greece is set to remain a coffee dominant market when it comes to hot drinks and per capita consumption of this category will remain high. Coffee will remain the largest category in both the off-trade and on-trade channels. 

The share of fresh ground coffee is set to grow further at the expense of instant coffee. Most notably, Greek-style fresh ground coffee is anticipated to retain a loyal audience, with this already the largest category in terms of volume sales. Meanwhile, coffee pods appear to not yet have reached maturity and thus have plenty of space to grow. This category will continue to benefit from the strong increase in investment by leading players as well as the entry of new companies capitalising on this trend. 

Within the off-trade channel, value will perform better than volume across all hot drinks categories thanks to the continuing rise in average unit prices and the ongoing premiumisation trend. Although people in Greece will experience a decline in disposable incomes, this is set to affect volume sales more than value because it is higher-income consumers who purchase premium products, and they tend to be less affected by economic turbulence than lower-income consumers. Furthermore, consumers have become more demanding and are more likely to consume fewer items than to trade down to cheaper products. 

The ‘home barista’ trend (which gathered pace during the lockdown period of the pandemic) is set to remain relevant over the forecast period, with consumers expected to continue investing in premium coffee experiences at home. Whilst such experiences are more expensive than buying and preparing instant coffee, they remain less expensive than purchasing coffee through on-trade channels. As such, the decline in disposable incomes will drive some consumers towards premium at-home experiences whilst reducing the amount they spend out-of-home on foodservice. 

In case of tea, given that the consumer base of tea in Greece is largely comprised of higher income people, many of whom are health conscious, the decline in disposable incomes is not set to have a strong impact on tea-purchasing behaviour. Instead, such consumers are likely to prioritise quality over quantity, allowing premium brands to continue to gain share and add value to the category. 

Unfortunately, consumers must deal with escalating coffee prices because of a Special Consumption Tax on coffee in Greece.  

The president of the Hellenic Coffee Union, Yannos Benopoulos recently said in an interview with Greek media, that “not only does there exist a Special Consumption Tax on coffee, but it has been a constant request of the Hellenic Coffee Union in recent years to abolish it.” He added that “this specific tax measure burdens the operating costs of businesses as well as the price of the coffee that the consumer buys.” 

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

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The European decaf coffee market is steadily developing thanks to the ever-growing demand for it in the region and high level of consumption, especially in Eastern part of the continent.

Amid the ever growing desire of the young European population to limit their caffeine consumption, the demand for decaf coffee in the region remains strong. The increase of decaf coffee consumption in Europe is currently part of the global trend of the rising consumer health awareness and a higher demand for products, which are free from preservatives, caffeine and other various hazardous substances.

In the meantime, global coffee producers are aware of the current market trends, planning the acceleration of expansion in decaf coffee segment. For many of them, the Western European region remains still a priority for expansion.

Francesco Bosso, chief commercial officer of Trieste, Italy-based illycaffè, told T&CTJ that its brand has strong presence in the European decaf coffee market, with the markets of Italy, France, the United Kingdom and Germany being the highest priorities for its growth. As part of this, the company has recently completed the launch of some new products in this category.

“In Italy in 2020, we strengthened our presence in the decaf segment by launching the NCC Decaf, which are performing very well — at the top of the category,” said Bosso.

Still, he remains generally pessimistic and does not expect a significant growth of decaf coffee market in Europe in years to come. “We don’t expect any particularly positive trends in Western Europe and especially in Eastern Europe, where the segment represents between 1 – 2 percent and hasn’t grow in the last years,” Bosso explained.

In the meantime, representatives of Swiss Water Decaffeinated Coffee Company USA Inc believe the European decaf coffee market still has big growth potential in years to come. Erin Reed, director of marketing for the company, said that decaf coffee has long had strong consumption and a high market share in Europe, so Swiss Water considers this market segment important for its growth.

“We’ve had business in the UK through an import partner for more than two decades, but with specialty coffee becoming increasingly prevalent throughout the region, in 2018 we established an office in France dedicated to supporting the European decaf market,” said Reed. “According to data from StudyLogic, a global market research firm, total decaf cups consumed has increased annually since 2016 – except for the 2020 pandemic year – and reached a six-year peak at the end of 2021. Within our own business, we continue to see strong growth from this region.”

She said, generally speaking, the larger coffee-consuming countries are also the large decaf markets, but Spain is a country in particular that over-indexes in decaf consumption per capita. “Related, we’ve seen a growing preference for chemical free decaffeination methods globally and have been on a path to increase our capacity by 40 percent to meet increasing demand. This has been a multi-year effort that is expected to come to full realisation in Q3 of this year. European demand will be key to that growth,” said Reed.

In contrast to illys’ Bosso, Reed believes that the demand for decaf coffee and its consumption in Europe will be growing in years to come. “Based on the trends we have seen over the past several years; we expect European demand and consumption will continue to grow. Furthermore, we anticipate a continued transition to chemical free decaffeination methods, as consumers are becoming more discerning regarding the products they purchase,” she said, adding, “use of chemicals in production and processing due to environmental and worker concerns, as well as risk of even minor residuals being consumed, is decreasing in favour.”

Most independent analysts also believe the European decaf coffee market will continue to grow, with the growth expected to be observed both the Western and Eastern parts of the continent.

Nandini Roy Choudhury, client partner, Food & Beverages at global market research firm, Future Market Insights Inc, said that the Eastern Europe decaf coffee market, currently valued at USD $1,032.1 million, and growing at a CAGR of 8.3 percent, is expected to reach a market value of USD $2,266.2 million in 2033.

“The decaf coffee in Western Europe is growing at CAGR of 6.3 percent, but Eastern Europe has a highest CAGR comparing to Western Europe due to the increase in the number of coffee shops in this region. The absolute dollar opportunity of decaf coffee in the Europe is $1,234.1 million between 2023 and 2033,” said Choudhury. “The decaf coffee sales in Europe are being boosted by the region’s high popularity of coffee and a growing public awareness of the negative effects of caffeine. For instance: Caffe Nero, a UK-based coffee chain, has at least 58 stores and plans to open at least 12 more stores per year, while Starbucks [plans to] open 40 shops in six different eastern European countries.”

Where is consumption the strongest?

In terms of consumption, FMI data shows that in Eastern Europe decaf coffee consumption is around 68,407 tonnes and growing at a CAGR of 7.7 percent to reach a market consumption of 150,424 tonnes while Western Europe decaf coffee consumption is growing at a CAGR of 5.3 percent.

Choudhury said that Eastern Europe has the highest CAGR as the consumption of coffee is increasing rapidly in this region. “In Eastern Europe coffee consumption exceeded tea consumption in 2019 for the first time. Coffee consumption in this region has been steadily growing since the late 1990s, while the tea market is in a sort of stagnation.” She explained that as coffee consumption increases, consumers are looking for less caffeinated coffee products, which boosts the decaf coffee market. “Rising incomes and the growing interest in high-quality coffees also bring interesting opportunities to the Eastern European decaf coffee market. Top coffee chains in Eastern Europe are including decaf coffee [on their menus] and advertising health benefits of decaf coffee helps the market in upcoming years,” said Choudhury.

Finally, analysts at global think tank Euromonitor International said that although decaf coffee has been around for decades, in recent years customers have been demanding it, and enjoying it, more than ever before. An official spokesman for Euromonitor said that we are facing a caffeine paradox. “Caffeinated products continue to show a very dynamic growth in beverages, as consumers need effective energy and to remain focused as result of stress, anxiety and insomnia, which have been exacerbated by the Covid pandemic; at the same time, as caffeine consumption grows, consumers are giving increasing attention to mitigate caffeine’s negative side effects, substituting a few occasions of consumptions with decaf products.” He noted that stress relief is an important component of wellbeing, and promoting sleep is also a thriving area of product development within the drinks industry, thereby playing a major role in decaf sales. “Additionally, a growing percentage of the younger generation is choosing to limit their caffeine intake, further boosting the growth of the global decaf coffee market.”

According to Euromonitor analysts, in 2022, there was a strong recovery of on-trade sales, which slightly affected retail volume sales of coffee as result of channel shifts. As in the overall coffee segment, there is an increasing premiumisation trend also occurring in decaf coffee.

The Euromonitor spokesperson said decaf drinkers are actively seeking out and are willing to pay higher prices for better quality decaf coffee, favouring fresh coffee versus instant variants, such as fresh coffee beans. “Demand for high-quality decaf coffee is also rising in foodservice, where coffee shops are beginning to experience a higher demand for tasty decaf drinks.”

According to Euromonitor’s Product Claim and Prime Positioning System, the number of decaf coffee SKUs available online is significant increased between 2019 and 2021 in Western Europe, with an increase of 471 SKUs, mainly driven by Italy, UK, Spain and Germany. But as more consumers are paying better attention to health and wellbeing, demand for a wider variety of decaf coffee will continue to grow in both Western and Eastern Europe.

• Eugene Gerden is an international freelance writer, who specializes on covering of global coffee, tea and agricultural industry. He worked for several industry titles and can be reached at gerden.eug@gmail.com.

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What is Driving Today’s Consumers?

In September 2022, London-based global consultancy Euromonitor International led a virtual coffee chat titled The New Era of Consumerism, which shed light on consumer patterns and their key drivers. The discussion emphasised that political, societal and environmental influences have shifted consumers’ buying habits, resulting in them gravitating toward products that reflect their values. Health and wellness continued to be a key motivator for consumers responding to the need of both an aging population and those individuals simply opting for healthier living.

“Despite the fact that we are living longer, the healthy life expectancy has remained stagnant at around 62 years, globally for the past decade,” said An Hodgson, head of consumer research, Euromonitor International. “This means that we are living longer but are not necessarily enjoying our old age years.

Jana Rude, population and household manager, Euromonitor International, shared that the rising
incidence of chronic diseases and the lingering effects from the pandemic have encouraged individuals to stop and consider the actions that will preserve health and longer life. This continued motivator provides an opportunity for tea and coffee brands to deepen a connection with consumers by sharing the health benefits and the research that supports those claims. The shift towards smaller households, including more single-person households and childless couples, has changed both the size and type of products that consumers are seeking. Single serve products and solo experiences, including introducing consumers to pour overs and loose leaf teas, could respond to these consumers’ needs.

Consumers expect quality, convenience,
experience, and
authenticity

Value-Driven Purchases

Value is no longer just about price; consumers want intangibles, including quality, convenience, experience and authenticity. Each of these areas provides an opportunity for tea and coffee companies to communicate their mission statements and, in turn, build and strengthen these connections. “Cutting back on spending is not just lower income houses; consumers are much more selective about their spending,” said Hodgson. “So yes, there is the lipstick effect (where consumers are indulging in smaller products), but there is also the trading down and hunkering down for a long inflation and an economic recession.”

Today’s consumers are increasingly critical and will not hesitate to abandon brands that aren’t aligned with their values. Hodgson said that companies need to stay in touch and communicate with consumers every step of the way, “this includes both listening to their needs and providing them with guidance on how to make better decisions.”

Over the past decade, there have been significant initiatives towards developing both a sustainable
and regenerative infrastructure. Communicating these initiatives, and the reasons behind them, can help strengthen connections with consumers who hold similar values. “Peet’s commitment to responsible sourcing is central to the Peet’s story and the trust our customers place in the brand, said Mary O’Connell, communications director, Peet’s Coffee, Emeryville, California. “This year, Peet’s became the first coffee company to be verified for achieving 100 percent responsibly sourced coffee, according to the standards set by sustainability non-profit, third party Enveritas.” By sharing its initiatives with its consumer base, Peet’s Coffee demonstrates how it is putting its values into action.

Brewpoint Coffee, Elmhurst, Indiana, prides itself in being a value-oriented company, taking every opportunity to share its story and the values that drive it. This includes not being afraid to promote the company in a way that showcases who they are. “I think that connection to a person and a mission really resonates with people,” said Melissa Villaneuva, founder and CEO, Brewpoint Coffee. “Loyalty is built on trust, and trust is built from connection to connection.”

Making Strategic Investments

The coffee and tea markets are saturated, making it increasingly challenging for brands to stand apart from the crowd. “It’s such a crowded space out there, it’s hard to create a brand that sticks in someone’s head,” said Mark Plumlee, senior content manager, Must Have Menus. “The key is to differentiate yourself from the other brands in your space, and then build your marketing around that.”

Innovative strategies, including social media and promotions, may drive consumers into your space, but the critical element is finding ways to build that connection (and in turn loyalty) once they are there. Plumlee shared that marketing is often the first thing that companies abandon in times of stress and financial strain. However, there are simple techniques that brands can implement to continue to foster those connections with their consumer base. Loyalty cards, specifically the paper version of them, are an inexpensive way that brands can facilitate these connections. He stressed that the cards provide an opportunity for employees to connect with their consumers, helping further develop that loyalty.

“Coffee shops have this massive opportunity to convert their consumers from one-time visitors to loyal consumers; the key is finding the way to make your space a part of their routine,” said Plumlee. “Any amount of marketing capital that you put up front to both develop and strengthen those connections, will pay off.”

Coffee shops have huge opportunities to convert one-time visitors to repeat and loyal customers.

Revisiting the Lost Art of Conversation

Fostering consumer connection, whether it’s remembering the customer’s name or beverage, helps ensure that customers feel acknowledged. “We are known for our expertise and our craft, from our coffee roasters to our store teams,” said O’Connell. “Everyone at Peet’s is passionate about coffee and coffee lovers and it shows. Walk into your favourite Peet’s and it’s likely your barista will know and recognise you and start prepping your order. “This included developing a loyalty program, with mobile order ahead, exclusive member-only items and special offers, all elements that help affirm that the customer’s loyalty is valued. Peet’s Coffee has also expanded its at-home offerings in both grocery and retail locations in the United States, providing consumers with multiple touchpoints of their brand.

Embrew Tea was developed to fill a gap, providing consumers with a convenient option while retaining elements of the specialty experience. “I wanted to create something that emulated a loose-leaf experience but with the ease of a tea bag and having something lightly sweetened because that was my preference,” said Ashley Haywood, founder and CEO, Embrew Tea, Asheville, North Carolina. “I came to realise that there were thousands of individuals who also had that same need.”

However, she quickly recognised that it was not just about the product. Her customers resonated with her experiences, and through sharing these experiences she was able to strengthen the connections with her customers. “Nothing replaces relationships,” said Haywood. “Having those conversations with people is critical, and if you can’t have them face to face, then find other ways to do that.”

One strategy that has been particularly effective for Haywood was personalising her email communication, which included providing insight into her personal experiences. By making this shift,
the emails became more conversational instead of product focused, increasing both engagement and
open rates. “I will take something that happened during the day or week and use it for both entertainment and to foster connections, but I will always bring it back to tea,” said Haywood. “It’s about creating that relatable story.”

The Power of Story Telling

Nurturing those human connections is the glue that adheres the customer to the brand and often
brings them into the space. “What ultimately creates a more solid loyalty is sharing stories; because story is not just about what we are making up, but instead making sure that we are messaging who we are and what we want to become,” said Villaneuva. “This alignment with our values will end up attracting people with similar values, and the loyalty will become much stronger than those individuals that simply like your product.”

Conversations, whether in person or online, are a great way to share not only your company’s story, but also learn the stories of your customers. Each transaction that customers choose to make (or not make) provides insights into their needs and wants. “Numbers and data are storytellers; it’s not always about the money. It’s about what did people get really excited about, and sometimes numbers can tell you that,” said Villaneuva. The key is committing the time to explore the data and feedback and adjusting your offerings accordingly.

However, storytelling, shared Villaneuva, on its own is not enough. Customers need to also have a
positive café experience, including being served quality products and having a smooth transactional
experience. “When it comes to loyalty programs, how easy is online ordering in, how easy is it to
order in shop, how long are your wait times,” said Villaneuva. “That whole operational experience,
is a key piece of the puzzle and if you can do all three – product, storytelling and transactions –
really well, then that is where you gain customer loyalty.”

• Anne-Marie Hardie is a freelance writer, professor and speaker based in Barrie, Ontario. She may be reached at: annemariehardie1@gmail.com.

The post The New Age of Consumer Loyalty appeared first on Tea & Coffee Trade Journal.

Changing consumer habits and the development of grocery retailers are shaping up the private label segment of the tea and coffee market across Europe. The growth potential in this segment is yet to be exhausted, especially in the eastern part of the continent, where market players are now catching up with Western trends.

Over the past few years, private label coffee has been increasing its presence in the European market. Numerous European supermarket chains put their own brands on the shelves, such as Perla from Dutch supermarket Albert Heijn, E.Leclerc’s L’origine du goût in France, and Tesco Finest and Marks & Spencer in the United Kingdom.

Private label tea at Netherlands-based grocery store, Albert Heijn. Image: World Brand Design Society Website

Nowadays, it is believed that the share of the private label tea and coffee products is the highest among discounters, and they could drive growth in sales in Europe even further.

“Private label genesis and evolution are impossible without developed modern grocery retailers. Further penetration of discounters, especially in Eastern Europe, brings more space for private label moves and initiatives,” commented Julija Poliscuk, senior analyst of London-based market research company, Euromonitor International. “This is the main factor for healthy dynamics of retailers’ own brands across hot drinks. Channel shift transforms private label to comprehensive and trusted brands,” she added.

The entire European market is currently under an influence of the rising production costs, which affect all links in the production chain, and change consumer attitudes, Khansaa Ruiz, export manager of the Alicante-based coffee factory Burdet Coffee said. “There is a major crisis. Roasting factories are suffering at the moment because of the increase in coffee prices. We have been struggling to keep business going. The coffee prices have escalated tremendously due to the Covid-19, then due to the transport problems, and now due to the war. So, it’s a bit chaotic.”

“As for the private label coffee the trend is towards higher quality coffee, or at least this is our business, and we do see an increase here,” Ruiz said. She explained that there is a relatively high demand for new brands on the market. In general, many small businesses and people are looking for small business opportunities, and the market witnesses a very important increase in small businesses, including those wanting to create online websites to sell coffee.

“As for the quality of the coffee, we see that more and more a single-original coffee is being sold better. [This concerns] pure coffee, such as Colombian, Ethiopian, Guatemalan, Costa Rican, etc. People are starting to appreciate the meaning of good quality coffee,” she added.

Alberto Lusini, head of Northern Europe at Massimo Zanetti Beverage cited New York-based consultancy, Nielsen, estimating that private label share in the European coffee market is between 10 per cent and 25 per cent. “This data has had a relatively constant growth in past years. Private labels in the mass market and food service are no longer synonymous with entry-level pricing,” he explained.

The private label segment developed an important evolution in terms of innovation and improvement in quality, typical of the branded business, Lusini said, explaining that trade labels are answering the needs of consumers for additional transparency, and traceability, in case of single origins, and sustainability. “The increased sales of coffee beans is proof of a trend to bring the barista experience at home,” he added.

Poliscuk said that another reason why private label coffees are so popular is that there is more variety. “Most supermarkets offer several quality options and coffee from different origins. Many supermarkets have entered the premium segment and are expanding their range of certified coffee products. Retail sales of organic-certified private label brands are increasing. Examples of organic private label brands in Europe include REWE Bio in Germany, Carrefour Bio in France, and Waitrose Duchy Organic in the UK.

Covid-19 as a game-changer?

The coronavirus pandemic has reshaped the European grocery-retail landscape tremendously. With restaurants, cafés, and bars remaining largely closed in most countries during at least the first wave of the pandemic, consumers rushed to stock up on groceries.

The out-of-home coffee market was greatly affected during the Covid-19 crisis, said Utrecht, Netherlands-based consultancy ProFound-Advisers, in a post shared by the Dutch Centre for the Promotion of Imports from developing countries. Many coffee shops closed, and people worked and drank coffee at home instead. Coffee sales at supermarkets went up, which benefitted private label brands, and created a trend.

“Early in the Covid-19 pandemic, consumers around the world rushed to supermarkets to stock up on products. Retail sales went up a lot. Retailers also developed online sales and delivery solutions for consumers. This made supermarkets the main source of food and beverages during the pandemic,” the Dutch analysts added.

MZB says the demand for private label coffee is growing across Europe. Image: Massimo Zanetti Beverage

Lusini agreed, adding, “The Covid-19 pandemic and, even further the strong inflation on raw materials from Q4 2021, has pushed consumers towards private labels. In particular, the inflation driven by the strong price increases in green coffee has polarised the consumers towards entry-level prices on one side, and premium products on the other. Private labels could possibly take advantage of this.”

However, it is yet to be said that the Covid-19 pandemic has been a game-changer for the hot drinks market in Europe. Poliscuk explained that financial hardship caused by the pandemic forced consumers to re-think their spending, so value for money embodied in private label quickly became a priority, but that trend is primarily related to soft drinks. “Branded products remain important within hot drinks, due to their indulgence and rituality essence, in addition to the request for quality differentiation. Neither tea nor coffee of retailers’ owned brands did not gain share in 2020,” she added.

The European market is uneven

Private label hot drinks’ presence in Europe is not homogeneous and differs regionally and from country to country.

In 2021, almost 16 per cent of value sales of coffee and 14 per cent of tea in Western Europe were under retailers’ house labels. Meanwhile, in Eastern Europe this indicator does not reach 5 per cent for coffee and is 7 per cent for tea, Poliscuk said.

“The significantly stronger presence of private label in the Western part of Europe is explained with strongly developed chains of modern grocery retailers and already earned trust to own brands. Eastern Europe is only catching up with Hungary, Czech Republic, Poland, and Slovakia pursuing a Western model, with the strongest share of retailers’ brand overall and in hot drinks too,” Poliscuk noted, adding that these countries successfully adopted international – or developed their own – discount chains.

Single origin coffee is making its way into the private label segment. Image: Burdet Coffee

Different levels of development of store-owned brands define the way companies raise these products’ awareness. Thus, Eastern Europe usually puts the focus on low cost. More advanced chains enter the mode of portfolio expansion and product range broadening. Eastern Europe has already witnessed the evolution of basic needs’ satisfaction to catching up with expertise from brands they mimic, Poliscuk said.

Rising beyond the low-cost segment

As the popularity of private label products in Europe promises to gain traction in the coming years, this segment starts playing an increasingly important role for market players.

“We have a long-standing experience in private labels, both in mass market and food service. The management of private labels is part of our ongoing relationship with the trade at the global level and it represents one-fourth of our total turnover. We leverage our strong expertise in green coffee and the roasting capabilities of 18 plants located all over the world to support our PL clients,” Lusini said.

Poliscuk said that further projected penetration of modern grocery retailers and especially discounters will support the development of private labels across Europe with the highest dynamics in its Eastern part. “Private label in Western Europe is entering a new era where penetration of modern grocery and a developed omnichannel allow them to evolve towards something new and unique. Retailers’ own brands are ready to rise beyond low-cost, wide assortment and segmentation,” she said.

Currently, these brands target specific consumers’ needs and higher expectations with little or no sacrifice in terms of product quality. Poliscuk is confident that this will result in more private label coffee pods and fresh coffee beans with the underlined origin and technology of roasting, and private label tea will be able to offer more varieties and added value via functionality.

“As modern consumers are eager to buy sophisticated, premium organic or sustainable products, even price-sensitive private label [will be able to] enter the niches,” Poliscuk shared, adding, “It’s worth mentioning, that ever-continuing expansion of e-commerce with forms of dark stores and delivery services will draw new horizons for coffee and tea private label across Europe.”

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

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Wellness teas have experienced an ongoing rise since the global Covid-19 pandemic began, and there’s no sign that the trend is ending anytime soon. Thus, it’s a clear opportunity for the tea industry and beverage developers alike, to capitalise on the growth.

In November 2020–amidst the early phase of tea’s newfound popularity during the Covid-19 pandemic–writer/reporter Rebecca Deczynski summed it up at Refinery 29: “Right now, tea culture is at its peak. You’ve likely found yourself scrolling past targeted ads for herbal elixirs or swiping through endless Instagram stories depicting still-steaming mugs. You’ve heard celebrity endorsements for choice brews, and you’ve read about ‘wellness tea’ in magazine roundups devoted to self-care. The stuff is more popular than ever…”

John Lenz, the vice president of sales and president of hospitality at Intelligent Blends in San Diego, California, reported that while coffee is still considered a relatively healthy beverage, tea boasts the most benefits over any other type of beverage. “Wellness teas were already on the rise before the pandemic, but as more people looked for solutions to boost immunity, they found tea,” said Lenz. “Living through a pandemic has made many people realise the importance of immunity-boosting food and beverages.”

High demand for functional beverages

Chicago-based ADM, a leader in nutrition and a partner to the world’s leading consumer brands, regularly looks at consumer trends through its proprietary “Outside Voice” consumer insights platform. The organisation’s recent 2021 research found that 31 per cent of consumers are purchasing more items tailored for their health, and 50 per cent report a preference for foods and beverages that naturally contain beneficial ingredients. ADM also noted that the desire to influence health and wellness through foods and beverages is creating new opportunities for nutrient-dense products with functional health benefits aimed at supporting immune systems, enhancing mood and sustaining energy.

Vince Macciocchi, senior vice president and president of ADM’s Nutrition business unit, and the company’s chief sales and marketing officer, explained, “The global health crisis has changed consumer preferences in new and unexpected ways. We are seeing a heightened demand for foods and beverages that support immune systems, enhance our mood and reduce our environmental impact, driven in part by emerging human tensions. This has provided a unique opportunity for brands to develop disruptive new products that will forever change the way we eat and drink.”

Maria Uspenski, founder and CEO of The Tea Spot – which offers numerous premium teas focused on wellness and functional benefits, shared, “Consumers are seeking natural ways to support wellness, whether it’s strengthening immunity, helping reduce stress, or bringing oneself ‘back into balance’ with a cup of tea. In fact, consumers are seeking all varieties of tea–including traditional teas, functional teas, botanicals, and herbal blends. We expect that premium tea and specialty wellness teas will continue to stay in the forefront of consumers’ minds.”

Clipper Teas launched a functional teas line in 2021 designed to improve moods. Image: Clipper Teas

Shabnam Weber, the president of The Tea and Herbal Association of Canada, a leading authority on all things tea in Canada, representing members from bush to cup, agreed. “The need to take care of one’s well-being, both physical and emotional, remains a strong driver for consumers,” she explained. “Today, 58 per cent of consumers are actively looking for healthy products when they shop, resulting in a 171 per cent increase of functional food and beverages introduced to market in the past ten years. This trend will continue, and it provides the tea community with an opportunity to boost its growth by focusing on tea as a healthy beverage.”

Indeed, consumers are eagerly seeking products that they believe support wellness. For example, Whole Foods Market global buyers and experts recently unveiled their top ten anticipated food trends for 2022, and functional beverages – including teas or beverages made with botanicals – are expected to rise in popularity in the next year.

“Last year, we saw tremendous pandemic-related shifts in grocery buying habits as the world adjusted to spending more time at home,” said Sonya Gafsi Oblisk, chief marketing officer at Whole Foods Market. “As the food industry slowly adjusts to a new normal, we expect to see consumers prioritise food and drink products that deliver additional benefits – like functional sodas and tonics – and products that support their sense of well-being…”

Major brands launch wellness teas

Some of the national and multinational brands that have recently introduced wellness teas in the marketplace include Celestial Seasonings, Twinings, The Tea Spot, Buddha Teas, and other major players.

Boulder, Colorado-based Celestial Seasonings, the specialty tea brand and subsidiary of Hain Celestial Group, launched Tea Well, a line of organic wellness teas that couples daily health benefits with flavour. Tea Well blends include Mood Tonic, Sleep (the first tea with melatonin sold in the United States), Laxative and Gut Health (featuring a blend of prebiotics, probiotics and fibre).

“Beyond the mental health benefits of sipping a warm cup of tea, many consumers choose tea for its health benefits,” said Tim Collins, vice president and general manager at Celestial Seasonings. “We want to make sure we are delivering on this promise with products that go above and beyond in providing the benefits you’d find in your typical cup of tea.”

In addition to the Tea Well line, Celestial Seasonings’ ‘Taste the World of Celestial Seasonings’ ad campaign highlights the feel-good benefits of drinking tea. Video vignettes focus on Celestial Seasonings Green Tea for energy, Vitamin C tea for immune support, and Sleepy time tea to winddown. Through whimsical imagery and narration, the campaign is designed to introduce hot tea as a healthy and flavourful choice.

“This campaign captures the essence of how Celestial Seasonings brings balance and benefits everyday,” said Melinda Goldstein, chief marketing officer at Hain Celestial.

In May 2020, The Tea Spot launched its Flu Fighter wellness tea, a caffeine-free herbal blend that features functional ingredients, including astragalus, honeysuckle, organic liquorice root, orange peel, tangerine peel, dandelion root, mulberry leaf, red root, and organic ginger.

According to The Tea Spot, the ingredients in the Flu Fighter tea were chosen based on a medical report published in Military Medical Research (Volume 7, Article Number 4, February 2020), on the diagnosis and treatment of the novel coronavirus (2019-nCoV), where a combination of herbs and roots were used to support flu-like symptoms.

The Tea Spot’s Uspenski said, “The pain and stress of the current pandemic has pushed The Tea Spot to think outside the box as to how we can help empower people to find and support better overall wellness.”

In October 2021,The Tea Spot reported that their line of women’s teas – called Goddess Women’s Teas – were a best-seller for the company that year, as more consumers discovered premium tea or sought tea for its wellness benefits. The tea line features three 100 per cent organic tea blends that showcase botanicals and herbs to support women’s health throughout different stages of life.

Buddha Teas saw sales of its immune-boosting and lung health teas rise during the pandemic. Image: Buddha Teas.

John Boyd, co-founder of Colorado Springs, Colo.-based Buddha Teas, also noticed that more customers discovered tea during the pandemic. “We saw a huge spike in our herbal teas that boost the immune system. Our pure Elderberry had an astronomical increase in sales, and we attribute that to the amount of elderberry in each tea bag–2,000mg. Everyone seemed to jump on the immunity boosting teas band wagon. Also, our lung health teas – such as Mullein and Eucalyptus – have gained tremendous momentum.”

Boyd shared that Americans have traditionally been coffee drinkers, however people are leaning towards drinking tea. “Society is becoming more health conscious and most people know that green teas are much healthier than coffee, and they still provide the same caffeine kick that people are looking for to start their day,” he said. “Not to mention the fact that some of our caffeinated teas contain an ingredient that totally takes the edge off that jittery feeling while still kicking you into overdrive. Specifically, I’m talking about matcha and L-theanine.”

Twinings, a leading wellbeing drinks brand, also focused on an ad campaign to attract consumers to the healthy tea lifestyle. Its ‘Drink in Life’ campaign showcases the company’s new Superblends collection, demonstrating how these new products help consumers “feel good, live well and enjoy life.”

Twinings’ Superblends line – at the heart of its “Drink in Life” campaign – features four new flavours that are fortified with vitamins and functional additives, and additional flavours are slated for 2022.

Twinings new Superblends wellness line is designed to help consumers ’feel good, live well and enjoy life.’ Image: Twinings North America

“Our ‘Drink in Life’ campaign is rooted in the idea that taking even the smallest step counts when it comes to reaching your wellness goals and contributing to your overall health,” said Mike Currie, vice president of marketing at Twinings North America, based in Clifton, New Jersey.

Currie noted that the wellness segment in tea has been growing for a while, but the pandemic has accelerated the interest in wellbeing and beverages that support this. “Consumers are putting their wellbeing at the forefront and paying close attention to the products that they’re consuming,” he said. “From an overall industry perspective, this directly correlates to the steady increase in wellness tea sales. These consumers are investing in authentic brands that value transparency and put wellbeing within reach with small steps, making them feel optimistic about their purchases.”

Herbal teas are also big in the wellness tea marketplace

When it comes to wellness teas, it’s important to note that herbals teas and herbal blends are among the teas on the rise, in addition to true teas from the Camellia sinensis plant.

On the whole, the herbal beverages market, which includes herbal tea, is experiencing considerable growth, according to a new report from analysts at Vantage Market Research. In fact, the herbal beverages market is expected to reach USD $2.45 billion by 2028, growing at a compound annual growth rate (CAGR) of 5.1 per cent between 2021 and 2028. Factors like the rising awareness of the advantages of herbal-based beverages – such as replenishing skin from the inside, enhancing health, supporting healthy joints and rejuvenating the body – are facilitating the growth of the market for herbal beverages, according to the research firm. The herbal tea segment, specifically, is anticipated to grow more than 4.6 per cent CAGR over the forecast period.

Northern California-based tea author, educator and tea festival organiser, Babette Donaldson, owner and publisher of T Ching and the founder of the International Tea Sippers Society, noted, “The sense of helplessness and frustration in this time of Covid-19 motivates many to look to ancient healing lore. Many do this to feel that there are ways to take control of one’s own well-being. In the past, some in the tea industry have focused on the ‘tea and health’ message to include only Camellia sinensis. But customers are looking for something more inclusive in their cups. Resources for herbalism are abundant and bridge many cultural divides.”

The next wave of wellness teas?

In a recent World Tea Conference + Expo white paper, Euromonitor International’s senior beverages consultant, Matthew Barry, based in Chicago, Illinois, pointed out that while not a cure, tea can serve as a valuable temporary oasis in a chaotic world. “An opportune area in the US market in the near future will be teas designed for relaxation and mindfulness,” said the senior beverages consultant. “While many beverage categories are eager to address this growing consumer need, tea starts with a considerable advantage. Tea – herbal tea in particular – is already strongly associated with calming effects. Chamomile, for example, has been used as a calming ingredient in tea since the time of the ancient Egyptians, so herbal tea could be said to have been active in the calming functional space for millennia. Consumers hardly need to know this history to be familiar with the idea that chamomile, mint, valerian or other herbs promote a sense of calm – and there is a new wave of teas targeting this space.”

Barry also noted, “Stress and anxiety levels continue to be at an all-time high. Tea can provide moments of quiet and calm amidst the turbulence. The American tea industry needs to prioritise products and blends that address mental health concerns. If done effectively, the mindfulness space will be the most dynamic in the US tea industry for years to come.”

• Aaron Kiel, based in Raleigh, North Carolina, has worked in the tea, coffee and beverage industries for nearly two decades, and he’s the editor of World Tea News. He’s a journalist and writer at heart, but he also wears a public relations “hat” through his PR consultancy, ak PR Group. He can be reached at akiel@akprgroup.com.

The post The pandemic spurs an ever-increasing demand for wellness teas appeared first on Tea & Coffee Trade Journal.

The Covid-19 pandemic is taking a heavy toll on all of us. Our daily life has been upside down, routines shacked up and most of us noticed our spirit and moods affected. It is not surprising that in these challenging times, we cling to our daily treats and a cup of Joe has never been so important.

“In this ‘new normal’ period, one of the four key functionalities for coffee consumer is the search for mental wellbeing rather than immunity booster. The pandemic is a major additional burden on global mental health,” wrote Matthew Barry, senior beverages consultant with London-based global market intelligence firm, Euromonitor International, in a 2021 calming beverages report. “Calming as a functionality is surging in importance, as consumer stress levels have been rising significantly around the world. Yet the rates of caffeine consumption are rising, and consumers show little willingness to cut back, despite some negative health consequence related to caffeine.” To deal with this side effects, he said consumers will want to blend their caffeine with something calming whether in a single beverage or to be consumed later in the day when caffeine consumption is used to relax or promote good sleep. “R&D in calming beverages remain a critical area of innovation, with a focus on anxiety-relieving beverages.”

With the pandemic still surging, consumers are looking for ways to aid mental wellbeing as much as physical wellbeing. As such, the popularity of functional coffee continues to grow.

But the equation of coffee and mental health is far from simple. Dr Géraldine Coppin, a senior researcher and lecturer in affective psychology at the University of Geneva and at the Swiss Center for Affective Sciences, noted, “While a large body of research has reviewed the physiological effects of coffee consumption, only few studies have considered the potential relationships between coffee consumption, mood and emotion. Although the effect of coffee intake on mood and emotion is difficult to study, as coffee drinking is part of an ingrained daily ritual for many, there is convincing evidence that a moderate intake of coffee improves alertness and attention and is associated with increased feelings of pleasantness and reduced feelings of anxiety.”

She said that when studying the effects of coffee, researchers must be conscious of the fact that disrupting the daily routine, particularly at the start of the day, may affect mood and emotion, irrespective of coffee consumption’s physiological effects. Likewise, the expectation of consuming caffeine has been shown to affect mood and emotion, even if no caffeine has actually been drunk. “The mechanisms behind the observed effects are likely to include a role for caffeine but also for other compounds present in coffee, including polyphenols, although further research is required in this area,” said Dr Coppin.

Mushroom coffee has many added benefits but consumer awareness is low.

Another scientific advocate of coffee intake and reduced risk of depression is Dr Giuseppe Grosso, a research fellow at the Integrated Cancer Registry, Azienda Ospedaliera Universitaria Policlinico Vittorio Emanuele, Italy, and a senior collaborator at NNEdPro Global Centre for Nutrition and Health, St John’s Innovation Centre, Cambridge, England. In a 2016 report for ISIC (Institute for Scientific Information on Coffee) “Coffee, tea, caffeine and risk of depression: a systematic review and dose-response meta-analysis of observational studies” (Mol Nut Food Res, 60(1):223–2), he stated, “We have researched on the impact of coffee and caffeine consumption on the particular health condition depression. While current research of an association is limited, a systematic review of observational studies does suggest that the risk of developing depression decreases with moderate intake of coffee (equivalent to approximately three to five cups a day).”

Furthermore, the effect of coffee may be modulated by compounds in coffee other than caffeine. Dr Grosso explained that other mechanisms may also be associated with a reduced risk of depression. “Dopamine, for example, is a neurotransmitter that helps to control the brain’s reward and pleasure centers and also helps to regulate emotion.”

Exploring added functionalities

All very well but rather than mitigating or removing caffeine from their brew, today, consumers are looking at additional functionalities. What is proven scientifically is that one of the best-known active compounds of coffee is caffeine. A mild central nervous stimulant, this substance is associated with increased alertness. Following the European Food Safety Authority (EFSA), a cause-and-effect relationship has been established between a 75mg serving of caffeine and both increased attention and alertness. Several robust studies are in progress, as health allegations are very arduous to prove. Currently, there are several popular functional coffees on the market.

Bullet coffee is coffee with added MCT oil grass-fed butter or ghee. It has gained popularity through claims that it gives long-lasting energy, boosts concentration and keeps you satisfied longer. Because of the fats or oils in it, it is much higher in calories than a simple cup of coffee, which could increase the energy level. The combined ingredients take longer to digest in the body, giving then a feeling of being fuller for longer. At the present one finds limited supports for the claim that it provides long lasting energy, boosts concentration or appetite suppressant. More research is needed in this area. But fats such as coconut oil and butter are rich in saturated fatty acids, which the body converts into cholesterol. This is opposite to the dietary guidelines advising a move towards unsaturated fats.

Vitamin Coffee claims to naturally support sustained energy, muscle repair, bone health and better moods, among other benefits.

Mushroom coffee is a blend of ground coffee with powdered fungus. It claims to have half the amount of caffeine and double the effects of coffee. What is demonstrated is that mushrooms provide a range of nutrients including potassium and selenium. It is supposed to increase alertness and boost immunity and cardiovascular function. Some experts suggest it may be the caffeine in the coffee that gives the energy boosting effect, and not mushroom extract.

When compared with roasted, green coffee beans have limited aroma and flavour. However, experts suggest the unroasted beans can aid numerous health conditions, primarily due to the presence of chlorogenic acids. These might have a positive effect on glucose and lipid metabolism cardiovascular disease, type 2 diabetes, and metabolic syndrome. Found in both green and roasted coffee beans, the levels of antioxidants are higher in green coffee.

Natural functional ingredients

When looking at innovative ingredients and adaptogens, we are entering troubled waters. What exactly are adaptogens? A buzzword in the wellness world, they are popping up everywhere but still no industry formal definition on what they are. They can be classified as nontoxic herbal pharmaceuticals, which claim to help us better cope with (or increase our resistance to) mental or physical stress, improve physical and mental performance, and possibly support the immune system.

“These herbs and roots have been used for centuries in Chinese and Ayurvedic healing traditions, but they’re having a renaissance today. Each one claims to do something a little different, but overall adaptogens help your body handle stress. They’re meant to bring us back to the middle,” said Dr Brenda Powell, co-medical director of the Center for Integrative and Lifestyle Medicine at the Cleveland Clinic’s Wellness Institute, in a 2018 article by Jamie Ducharme in Time magazine, “What Are Adaptogens and Why Are People Taking Them?”

Turmeric, for example, is the latest super food – or super spice – that is being added to a variety of items, including coffee. It has been used in India for thousands of years as both a spice and medicinal herb. Science has started to back up traditional claims that turmeric contains compounds called curcuminoids that have medicinal properties. The most important curcuminoid is curcumin, which is the main active ingredient in turmeric. It has powerful anti-inflammatory effects and is a strong antioxidant. Turmeric has reportedly shown promise in treating a variety of ailments ranging from arthritis to psoriasis to Alzheimer’s and cancer.

Ashwagandha, also known as Indian ginseng and winter cherry, is an ancient medicinal herb claiming multiple health benefits as an anxiety and stress reliever, fighting depression, and boosting fertility and testosterone in men. It comes in a powder and one to two teaspoons can be added into a daily coffee.

Cardamom has also been used in Ayurvedic medicine for thousands of years. A spice commonly added to coffee (in the powder form) in the Middle East, cardamom gives coffee a spiced flavour similar to ginger (they’re in the same family) and is packed with nutrients. A two-tablespoon serving has just 36 calories, is loaded with fiber, essential minerals, and claims to be cancer-fighting.

Rhodiola is a herb that grows in the cold, mountainous regions of Europe and Asia. The functional ingredients come from its roots. It claims to stimulate cognitive functions in situations of stress, fatigue, anxiety, and depression.

Peet’s Coffee ‘golden lattes’ – espresso-blended beverages with turmeric – launched in 2021 in both hot and cold.

Holy basil is commonly known in the Hindi language as Tulsi. A quite revered medicinal herb, Holy basil is a plant that has violet flowers and blossoms. Medicinal preparations are made from the leaves, stems, and seeds of the plant. Holy basil is often used for cooking Thai dishes and its spicy flavour has influenced the common name “hot basil.” Some advocates say that adding it to coffee reduces any jitters often associated with caffeine and removes the edge from caffeine. With milk, it almost has sort of a chai-like vibe.

Elderberry is a fruit that grows in small clusters and is of deep purple colour. It is packed with antioxidants and many vitamins, which is partly why it is so popular and desired as a health supplement. It claims to aid in inflammation and depression, but immunity booster is its most common use.

L-theanine is an amino acid that occurs naturally in tea leaves and is used in Asian medicine to treat medical and mental health problems. L-theanine is supposed to increase brain levels of serotonin, GABA, and dopamine. Promising studies talk of beneficial effects on memory, learning, and cognitive function as well as for treatment of OCD, bipolar disorder, panic disorder, and schizophrenia. Pure green tea contains both caffeine and L-theanine, but L-theanine can be added in usual coffee as a supplement, according to “L-Theanine for Different Mental Health Problems,” by James Lake, MD (Integrative Mental Health Care in Psychology Today, August 2019).

Finally, in the United States in particular, CDB (cannabidiol) extracts in coffee are taking an increasing share of the supplement for functional coffee. “We’re seeing new and exciting trends in the CBD space, which we’re fortunate to be able to react to quickly. With a sharp focus on wellbeing seen around the world, an increasing number of people are looking for new and innovative products with ingredients they know and trust,” said Mark Elfenbein, chief revenue officer of Austin, Texas-based ingredient supplier, Socati, a wholly owned subsidiary of Yooma Wellness Inc.

With new formulations, Socati is already working with several leading consumer brands to create new and unique products which will soon be available to customers. “But, today in the spotlight for mental health benefit is CBG, or cannabigerol,” said Elfenbein. “This is a minor cannabinoid since its cannabis availability is typically at very low levels — usually less than one per cent. But it plays a significant part as a precursor to other cannabinoids, CBG has popularly earned the name ‘mother of cannabinoids’.”

Bulletproof pioneered ‘bullet coffee’ – coffee with MCT oil, grass-fed butter or ghee – claiming it boosts energy and concentration.

If CBG research is still in its early stages when it comes to mental health issues, there is already some medical support for the usage of CBG oil for certain mental disorders. For those who don’t seek any treatment, CBG could provide them with some anxiety relief. Effects might or might not be like the effects of prescription medications, but CBG has none of the addictive and dangerous side-effects commonly associated. CBG can help with heart conditions, high blood pressure, depression, and even suicidal thoughts. These health allegations still need more scientific evidence but the US CDB industry is expecting FDA to rule on the topic this year.

“The global pandemic has made consumers aware that wellness is a vital concern. In the coming years, consumers will be looking for more products and services that offer mental and emotional health benefits,” said Alex Beckett, global food and drink analyst with London-based global market intelligence firm, Mintel, adding that new formulations and emotionally appealing multi-sensory products will allow food and beverage brands to differentiate themselves in the competitive world of mental and emotional health products. “We anticipate that innovative food and beverage formulations will help consumers learn how food can impact their mental and emotional health, sparking new interest in psychologically-based approaches to healthy eating.”

• Dominique Huret has been a journalist in the beverage and packaging sectors since 2005. She writes in French, English and Dutch for several press groups. She is the co-founder of Cape Decision consultancy based in Brussels, Belgium. She can be reached at dominique@capedecision.com.

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Competition in the United States ready-to-drink (RTD) coffee category continues to heat up, with cold brew increasingly represented among new entries. Globally, the category reached USD $114 billion in 2020 according to Dublin, Ireland-based Research and Markets, which expects the market to grow at compound annual growth rate (CAGR) of 7.5 per cent from 2021-2026.

The market research firm attributes changing lifestyles, increasing spending capacities and shifting dietary preferences of consumers as the primary drivers of category growth.

“Consumers are increasingly preferring food and beverages that require minimum time to prepare and can be consumed on-the-go,” the company stated in announcing its 2021 research report on the category. “The canned and bottled packaging of these beverages are also adding to the convenience of consumers, thereby increasing their overall demand.”

Category leader pushes adoption curve

With an already robust portfolio of ready-to-drink coffee products created under its 27-year-old North American Coffee Partnership with PepsiCo, Starbucks found itself intrigued by 2020 consumer purchasing data from Information Resources, Inc. identifying that 72 per cent of US households had never tried a RTD coffee product. The company said sales of its RTD products under that partnership grew 14 per cent in 2020, providing dual incentives to address.

What were these untapped customers seeking that was not already offered in the well-served marketplace, where a plethora of cold coffee offerings has built a significant category in recent years?

To answer that question, Starbucks Coffee – the RTD category leader holding a 61 per cent share in 2020, but down from 63 per cent in 2019 according to London-based global market intelligence firm, Euromonitor International – embarked on what it calls its “biggest body of research yet” to identify the unmet desires of RTD holdouts.

The company said the findings were clear: a desire for the smooth coffee taste profile that has propelled cold brew into the spotlight, a ‘splash’ of milk and flavour, lower sugar and calorie content than other category offerings, skip the preservatives, and an ‘accessible’ price point.

Manpreet Cheema, senior product developer on Starbucks R&D team, said the goal was to keep the lightly sweetened beverage under 100 calories and zone in on the best roast profile, narrowed down over months of tastings and consumer tests. Feedback revealed that less acidic cold brew has become increasingly appealing to those not currently drinking RTD coffee, and provided the desired complexity, balanced profile, and rounded taste for the new line.

Rolled out last year through mass, grocery and convenience store channels as Starbucks Cold & Crafted, the new line debuted in three varieties: Coffee with a Splash of Milk & Vanilla, Coffee with a Splash of Milk & Mocha and Coffee Sweetened Black. The suggested retail price was set lower than most RTD options on the market at under $3 per 11-ounce bottle.

Meanwhile, Starbucks continued its model of translating popular in-store beverages into RTD versions for grocery channels with the addition of Dark Cocoa Sweet Cream Nitro Cold Brew, expanding the store-inspired platform that launched in in 2020, as well as Starbucks Vanilla Sweet Cream Cold Brew, offered in both 11-ounce single serve and, in a 40-ounce multi-serve.

Dunkin’ through its own collaboration with The Coca-Cola Company that began in 2017, leveraged a strong branding opportunity with the launch of RTD bottled iced coffee last year. Produced and distributed by Coca-Cola using Arabica coffee blends with real milk and sugar, the new flavours are inspired by three of the most iconic Girl Scout Cookie varieties: Thin Mints, Coconut Caramel, and the S’mores (graham cracker, chocolate, and marshmallow notes), available in 13.7-oz bottles and joining the existing Dunkin’-branded bottled Iced Coffee varieties of French vanilla, mocha and original.

RTD and health

Fast-moving Super Coffee, the number three bottled coffee brand in the US behind Starbucks and Dunkin’, pioneered what Research and Markets now describes as an entire vibrant “better-for-you” beverage segment within RTD. Company revenue grew 106 per cent from $4 million in 2018, to $55 million in 2020, and its products are distributed to 40,000 stores across America.

“Super Coffee was born from the idea of removing negative ingredients and replacing them with positive ingredients,” explained company COO Jordan DeCicco, one of three brothers – all former NCAA Division 1 student athletes – who co-founded the company in 2015. Eschewing added sugar and instead utilising no-calorie monk fruit as a sweetener, the company’s RTD offerings draw from a range of ingredients including vitamins, protein, MCT oil, L-theanine for easing stress and 3/3 antioxidants.

One line is formulated with lactose-free milk and offered in mocha, vanilla, hazelnut, and white chocolate peppermint in 340gm PET bottles. A plant-based line is offered in coconut mocha, French vanilla, sweet cream, or unsweetened versions in 11-oz cans, while Super Espresso comes in 6-oz cans in vanilla, caramel or unsweetened triple shot.

Named as the fastest growing beverage company by Inc in 2020, Super Coffee has tapped a deep roster of professional athletes and celebrities as brand advocates and ambassadors. In 2020, global superstar Jennifer Lopez and baseball legend turned businessman Alex Rodriguez became minority owners in Kitu Life, Inc., the makers of Super Coffee. Last year, Super Coffee celebrated National Coffee Day in the US by sharing its trade secrets and challenging RTD market leaders and all competitors to stop using added sugars in their own products.

Coffee for a cause

Another unique, rapidly growing player in the RTD market in the US is Black Rifle Coffee Company (BRCC), founded in 2014 by former United States Army Special Forces member (known as ‘Green Berets’) Evan Hafer, a passionate coffee lover who travelled with his coffee grinder while serving in the Iraq war. He began roasting for friends after returning home to civilian life, but it wasn’t long before he turned it into a business with the mission of serving US military veterans, active military, and first responders, directly funding veteran causes even before he was able to draw a salary for himself from the fledgling company. Fast-forward five years, and BRCC posted USD $82 million in revenue in 2019, nearly entirely from direct-to-consumer operations of military-themed ground coffee sold through the company’s website.

After launching its first RTD coffee in cans in 2020, revenues doubled to $164 million in that year, and were on track to hit USD $230 million in 2021, elevating BRCC to the number four position in the US RTD coffee sector. Scaling rapidly over the past two years, the company’s RTD coffees are currently sold in over 40,000 locations across convenience, grocery, and drug stores as well as mass retailers.

Black Rifle Coffee Company Espresso is a premium product made from 100 per cent Colombian coffee with 200mg caffeine per 11-oz can. It is lightly sweetened to balance its ‘coffee-forward’ flavours while maintaining lower sugar content than similar products. It is gluten free, a ‘good’ source of protein, and offered in either espresso mocha or espresso with cream flavours.

The company recently extended its RTD offerings with the launch of Espresso 300, which contains 300mg of caffeine per 15oz can and an ‘energising blend’ of MCT oil and amino acids. It’s available in caramel vanilla and rich mocha versions.

• E Edward ‘Ted’ Hoyt has more than two decades of experience as a trade magazine editor and freelance writer, authoring many articles in the premium coffee, spirits and cigar industries, among others.

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The London-based global market intelligence firm’s annual report defines the trends motivating consumer behaviour and challenging business strategies in the year ahead. While not specific to coffee and tea businesses, many of these trends will most assuredly affect both industries in some way. Euromonitor’s Top Ten Global Consumer Trends are:

• Backup Planners: Consumers find creative solutions to purchase their go-to products or search for next best options as supply chain disruptions cause massive shortages.
• Climate Changers: Eco-anxiety and the climate emergency drive environmental activism for a net-zero economy. In 2021, 35% of global consumers actively reduced their carbon emissions.
• Digital Seniors: Older consumers become savvier tech users. Virtual solutions must be tailored to the needs of this expanded online audience.
• Financial Aficionados: Democratised money management empowers consumers to strengthen financial literacy and security. More than half of global consumers believe they will be better off financially in the next five years.
• The Great Life Refresh: Consumers focus on personal growth and wellbeing, making drastic life changes that reflect their values, passions and purpose.
• The Metaverse Movement: Immersive, 3D digital ecosystems begin to transform social connections. Global sales of AR/VR (artificial reality/virtual reality) headsets grew 56% from 2017 to 2021, reaching USD $2.6 billion last year.
• Pursuit of Preloved: Secondhand shopping and peer-to-peer marketplaces flourish as consumers seek unique, affordable and sustainable items.
• Rural Urbanites: Consumers relocate to safer, cleaner and greener neighbourhoods.
• Self-Love Seekers: Authenticity, acceptance and inclusion are at the forefront of lifestyle choices and spending habits as consumers embrace their truest selves.
• The Socialisation Paradox: Fluctuating comfort levels create a conflicting return to pre-pandemic life. In 2021, 76% of global consumers took health and safety precautions when leaving home.

I will not delve into detail in terms of all the trends, but I will highlight a few that will, in my opinion, directly, impact coffee and tea brands/businesses.

Euromonitor’s report finds that 36% of professionals expect supply shortages to be the most significant effect of the Covid-19 pandemic on their company’s supply chain. Supply chain shortages are forcing businesses to pivot and provide new solutions for customers to access products and services. If they cannot find their favourite brands or products, ‘Backup Planners’ will look for ways to purchase similar items or find creative solutions to obtain alternatives.

By late 2022, supply chains should start to stabilise and access to products should revert to pre-Covid-19 levels (many are projecting this will not happen before the third quarter). Yet, per Euromonitor, new shopping habits will dictate how Backup Planners discover and select products, from locally sourced to direct-to-consumer brands to subscription services. Localisation and optimisation will become the norm. Companies and distributors should use data to improve supply chain visibility, hone operations and rethink investments.

‘Climate Changers’ will affect brands and products across all industries. Green activism and low-carbon lifestyles are here to stay. Consumers expect brands to step up and are taking action through the products they purchase as concerns over the climate emergency escalate. The report reveals that:

• 28% of consumers tried to purchase locally sourced products and services in 2021;
• 67% of consumers tried to have a positive impact on the environment through their everyday actions in 2021;
• 78% of professionals think that climate change will impact consumer demand, changing behaviours, needs and prefer

To win over Climate Changers, companies should offer products that are carbon footprint certified. Transparent labelling of carbon-neutral products builds trust and enables consumers to make informed choices. Furthermore, digital innovation is reshaping how retailers, manufacturers and consumers transition to a new era of environmental transparency.

According to Euromonitor, tech tools, such as digital product labelling and mobile tracking apps, help consumers trace ethical claims, their carbon footprint and recycling habits on their phones. Millennials and Generation Z, especially, feel they can make a difference through their choices (see “Recognising the Power and Potential of Generation Z” in T&CTJ’s January issue). This largest spending group of the future will use tools to ensure minimal climate impact. The more offerings that align with expectations of Climate Changers, the more brands will see their products and services resonate.

The pandemic triggered consumers to make ‘The Great Life Refresh’, with passion and purpose driving action, which has resulted in drastic personal changes and a collective reboot of values, lifestyles and goals. (The Covid period – between 2020 and 2021 thus far – has also been called ‘The Great Resignation’ as scores of people have quit their jobs in search of new ones that they are passionate about, provide more happiness or better meet their new life needs and/or values.)

Businesses should innovate goods, services and experiences that respond to this moment, coupled with marketing that acknowledges and embraces the upheaval. Euromonitor explains that companies catering to The Great Life Refresh stand to be seen as partners, helping consumers adapt to a new way of life. Businesses should tailor marketing to acknowledge and support consumers’ decisions to take action. Consumers will prefer brands that match the moment. Companies need to offer policies and products that provide value and support personal growth to drive loyalty.

Individuality, authenticity, acceptance, self-care and inclusion are at the forefront of consumer lifestyles. ‘Self-Love Seekers’ prioritise their happiness, feeling comfortable in their own skin and indulging in goods and services that elevate their sense of self. Much like targeting Gen Z, to reach these consumers, businesses need to create deep connections with customers.

Products that evoke physical, emotional or spiritual wellbeing will resonate and enhance the lives of Self-Love Seekers. Furthermore, per the report, Self-Love Seekers purchase products and services that align with their motivations and identities, which should stay at the core of business strategies.

“Businesses need to transform alongside rapidly evolving consumer preferences,” said Alison Angus, head of lifestyles at Euromonitor International, in the report. “Reverting to a pre-pandemic playbook will not likely generate the same results moving forward.”

To download Euromonitor International’s entire report, click here.

• 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 digital Tea & Coffee World Cup (TCWC – hashtag #TCWorldCup21 on social media) is a combination of lectures and skill-building classes, as well as a virtual exhibition hall. Our speakers (their full bios are available here) all have highly informative, engaging and enlightening presentations planned. Presenters include:

• Rona Tison, executive vice president of corporate relations at ITO EN’s North American operations. ITO EN is Japan’s leading green tea brand and the world’s leading purveyor of premium and sustainably grown green tea and healthy beverages. Tison’s presentation, entitled “The Evolution & Globalization of Japanese Green Tea,” discusses the surging global popularity of green tea and matcha.
• William “Bill” Murray, president and chief executive officer (CEO) of the National Coffee Association, U.S.A. (NCA). His presentation, “Coffee, The Original Superfood: Challenges and Opportunities Communicating the Coffee & Health Message,” examines the overwhelming scientific research evidencing coffee’s healthy attributes and the stigmas and misinformation that continually surround the beverage.
• Matthew Barry, senior consultant at global market intelligence firm, Euromonitor International, specializing in global beverage industry trends, with a particular focus on coffee, tea and alcoholic spirits. While the pandemic did not stifle consumers’ love of coffee and tea, it did change how and where the drinks were consumed — and purchased. His presentation, “The Lasting Effects of Covid-19 on Coffee and Tea,” analyzes the change in consumer consuming and purchasing behaviour and offer a post-pandemic outlook for the beloved beverages.

Of course, our popular skill-building classes also return to the digital TCWC. The coffee classes will be run by Coffee Consulate and CVUA Karlsruhe and the tea, by the UK Tea Academy.

Dr Steffen Schwarz is managing director of the Hamburg, Germany-based Coffee Consulate, which he founded in 2005 to meet the increasing demand for training. In addition to extensive workshop programs, the company is engaged in research and product development, and manufactures barista tools, teaching and analytical materials.

Dr Dirk W Lachenmeier is state-certified food chemist, toxicologist, and director of the official coffee control laboratory for the German State Baden-Württemberg. He joined the Chemical and Veterinary Investigation Agency Karlsruhe (CVUAKA), Germany in 2003, and has served as director of the department of plant-based food since 2012.

Dr Schwarz and Dr Lachenmeier are hosting two skills classes for TCWC. The first, “Myths about Cold Brew Coffee” explores why there are so many wrong ideas and beliefs on cold brew and how to create a good one. The second, “Innovative Coffee Products made from Coffee By-Products,” highlights how other parts of the coffee plant can change the life of the farmer and the consumer.

Carri Hecks is the head of brewing and a tutor for the UK Tea Academy, where she currently teaches a sensory and practice online course, and part of the tea sommelier course. For TCWC, Hecks is hosting, “Creative Cocktails and Marvellous Mocktails,” which shows participants how to create a variety of fun cocktails – and mocktails – all of which use tea as a base. A second skills class, “The Art of Brewing,” teaches proper brewing methods for a variety of teas (black, green, white, etc).

Additional presentations are being offered by Petra Overall, export manager, Oxalis and Amaia Cowan, Futamura.

We hope you will be able to join us today – 8 September – for Tea & Coffee World Cup’s launch, or over the course of the following month. It’s not too late to register so please visit: www.tcworldcup.com so you may have 24/7 access through 8 October.

• 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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Our stellar speakers all have highly informative, engaging and enlightening presentations planned. The roster includes:

• Rona Tison is the executive vice president of corporate relations at ITO EN’s North American operations. ITO EN is Japan’s #1 green tea brand and the world’s leading purveyor of premium and sustainably grown green tea and healthy beverages. Tison also serves on the Board of the Tea Association of the USA and the Tea & Health Committee, the US-Japan Council and Advisory Board of the Global Tea Initiative at University of California, Davis, was the first woman to receive the John Harney Lifetime Achievement Award and is fluent in Japanese. Her presentation, entitled “The Evolution & Globalization of Japanese Green Tea,” will discuss the surging global popularity of green tea and matcha.
• William “Bill” Murray is president and chief executive officer (CEO) of the National Coffee Association, U.S.A. (NCA), a role he has held since June 2014. He leads NCA’s advocacy, regulatory, and member support activities on behalf of the hundreds of coffee-focused organisations that comprise NCA’s membership. Prior to joining the NCA, Bill was CEO of the Public Relations Society of America (PRSA). Previously, Bill worked in Hollywood for more than 20 years, including as executive vice president and co-chief operating officer at the Motion Picture Association of America (MPAA), which represented the multinational entertainment industry in more than 70 countries. Murray’s presentation, “Coffee, The Original Superfood: Challenges and Opportunities Communicating the Coffee & Health Message,” will examine the overwhelming scientific research evidencing coffee’s healthy attributes and the stigmas and misinformation that continually surround the beverage.
• Matthew Barry is a senior consultant at global market intelligence firm, Euromonitor International, where he specialises in global beverage industry trends, with a particular focus on coffee, tea and alcoholic spirits. While the pandemic did not stifle consumers’ love of coffee and tea, it did change how and where the drinks were consumed — and purchased. His presentation, “The Lasting Effects of Covid-19 on Coffee and Tea,” will analyse the change in consumer consuming and purchasing behaviour and offer a post-pandemic outlook for the beloved beverages.

Our popular skill-building classes also return to TCWC, digitally, of course, but still educational and entertaining. The coffee classes will be run by Coffee Consulate, and the tea, by the UK Tea Academy.

• Dr Steffen Schwarz is managing director of the Hamburg, Germany-based Coffee Consulate, which he founded in 2005 to meet the increasing demand for training. In addition to extensive workshop programs, the company is engaged in research and product development, and manufactures barista tools, teaching and analytical materials. Dr. Schwarz is the author of numerous scientific journals and regularly teaches as a guest lecturer of food management-related studies at the Cooperative State University in Heilbronn and at the University of Hohenheim.
• Dr Dirk W. Lachenmeier is state-certified food chemist, toxicologist, and director of the official coffee control laboratory for the German State Baden-Württemberg. He studied food chemistry and carried out his PhD research in Forensic Toxicology at the University of Bonn. Dr. Lachenmeier joined the Chemical and Veterinary Investigation Agency Karlsruhe (CVUAKA), Germany in 2003, and has served as director of the department of plant-based food since 2012. He regularly contributes to working groups of the monographs program of the World Health Organization’s International Agency for Research on Cancer (IARC), including the working group on coffee consumption.
• Dr Schwarz and Dr Lachenmeier will host two skills classes for TCWC. The first, “Myths about Cold Brew Coffee” will explore why there are so many wrong ideas and beliefs on cold brew and how to create a good one. The second, “Innovative Coffee Products made from Coffee By-Products,” will highlight how other parts of the coffee plant can change the life of the farmer and the consumer.
• Carri Hecks is the head of brewing and a tutor for the UK Tea Academy. She currently teaches a sensory and practice online course, and part of the tea sommelier course. Her interest in all things culinary has led to a keen knowledge of tea use in cooking and cocktails. She is also judge for the Guild of Fine Food’s ‘Great Taste Awards.’ For TCWC, Hecks is hosting, “Creative Cocktails and Marvellous Mocktails.” The class will show participants how to create a variety of fun cocktails – and mocktails – all of which use tea as a base. (I audited a similar class she held in July for the UKTA—it was a lot of fun and it made me thirsty!) A second skills class, “The Art of Brewing,” will teach proper brewing methods for a variety of teas (black, green, white, etc.)

We hope you will be able to join us on 8 September, or throughout the following month (ending 8 October) for Tea & Coffee World Cup. To register, or for more information, please visit: www.tcworldcup.com.

There is still time to exhibit or sponsor, so if interested, please contact Chris Seldon: chris@bellpublishing.com.

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

The post The digital Tea & Coffee World Cup is fast approaching appeared first on Tea & Coffee Trade Journal.

The beverage “sources” included coffee (brewed, instant, ready-to-drink), tea (black, green, “other” teas, herbals, ready-to-drink) and soft drinks (colas, other soft drinks, sports drinks and energy drinks). An infographic of caffeine preference created by Visualcapitalist.com shows regional trends.

The study found that tea, not surprisingly, was the preferred beverage of choice for many countries in most of Asia, including China, India, Indonesia, and Japan. Of course, it also has a strong preference in Africa – Kenya is the world’s largest black tea exporter – and in Europe, with Turkey, Ireland, and the United Kingdom being the world’s top three tea-consuming countries per capita.

Coffee was the most preferred CCB in several countries in Europe, including all the Nordic countries. Overall, coffee and carbonated soft drinks are the top caffeine-containing beverages sold in Europe. The Netherlands consumes the largest volume of coffee per capita than any other country in the Euromonitor database, followed by Finland and Sweden. The UK and Turkey favour instant coffee while the rest of Europe prefers fresh-brewed coffee. Furthermore, as we have covered in many articles in Tea & Coffee Trade Journal over the years, instant coffee mixes – coffee, sugar, and cream powder – are especially popular in South Korea, Hong Kong, Malaysia, Thailand, Philippines, Vietnam, and China.

Coffee is also the leading CCB in Canada, South Korea, and Brazil. Per the study, which was published in MDPI’s Special Issue, “The Impact of Caffeine and Coffee on Human Health,” Brazil is the only country in South America to have a proclivity for coffee over cola or other soft drinks. I am a bit astonished that Colombia is not the other South American country on the list to have a preference for coffee over other beverages.

Interestingly, the study reports that Food & Beverage Daily Guidelines (FBDG) in Nigeria, Sierra Leone, and South Africa discourage high coffee and tea intake because they inhibit iron bioavailability or increase phosphorous levels, while FBDGs in several countries of Asia and the Pacific also express caution concerning the iron inhibitory effects of coffee and tea, particularly when these beverages are consumed with meals.

Most disconcerting though, given the absence of any healthy attributes, is the global preference for soft drinks. The research reveals that the United States and most of Latin America overwhelmingly consumed soft drinks over other CCB, as did the Philippines, Thailand and Australia. Even in Europe, some countries that are heavy coffee drinkers like Italy and Switzerland purchased more soft drinks than coffee by narrow margins.

The study finds that the proliferation of soft drinks in Latin America is largely due to Coca-Cola’s prowess. Mexico, which favoured soft drinks the most over other drinks (Mexican consumers drink about 163 liters of carbonated soft drinks per year), is also the world’s biggest consumer of Coca-Cola per capita.

However, it is important to note that many countries were not tabulated, and that caffeine purchases do not differentiate between every possible caffeine drink (such as yerba mate or even hot chocolate/cocoa) — there are an abundance of coffees, teas and soft drinks from which consumers may choose.

Furthermore, the study was published in 2018 and CCB habits globally may have changed since then. For example, from the plethora of beverage webinars and sessions at trade shows (pre Covid) I have attended over the last few years, data showed that soft drinks consumption was declining, while coffee and tea consumption has been increasing (with many former tea-strongholds embracing coffee and vice versa, as well as the healthy attributes associated with both beverages). It would be fascinating to see the results of an updated version of this study to see how consumer behaviour with regard to caffeinated beverages has evolved.

• 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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We are now excited to announce our list of presenters, all highly acclaimed within their fields. The keynote speaker for coffee will be Thomas Linemayr, CEO of Tchibo Coffee. Headquartered in Hamburg, Germany, Tchibo is one of Europe’s leading coffee roasters and just entered the US market in 2020 — during the height of the Covid-19 pandemic. Rona Tison, evp, corporate relations & PR, ITO EN, will be the keynote speaker for tea. ITO EN is Japan’s largest green tea and matcha supplier and is a global leader in ready-to-drink green tea and matcha beverages. Matthew Barry, senior beverages consultant at London-based global market intelligence firm, Euromonitor International, will offer an outlook for the global coffee and tea industries in the post-pandemic world.

Our popular skill-building classes also return to TCWC, but digitally, of course. The coffee classes will be run by Dr Dirk Lachenmeier of the Karlsruhe, Germany-based, Coffee Consulate, while the tea classes will be run by the London-based UK Tea Academy, overseen by Jane Pettigrew. We will share full presentation details including topics and session times at a later date so stay tuned! We will also post updates on the TCWC website.

For more information on the speakers, sessions or to register, exhibit or sponsor Tea & Coffee World Cup, please visit: www.tcworldcup.com or contact our events manager, Kyra O’Sheen (kyra@bellpublishing.com). For full sponsorship details, please contact Chris Seldon (chris@bellpublishing.com).

We hope you will be able to participate in our inaugural digital Tea & Coffee World Cup!

• 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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Per Euromonitor, the Top 10 Global Consumer Trends in 2021 are:

• Build Back Better
• Craving Convenience
• Outdoor Oasis
• Phygital Reality (physical + digital)
• Playing with Time
• Restless and Rebellious
• Safety Obsessed
• Shaken and Stirred
• Thoughtful Thrifters
• Workplaces in New Spaces

In describing the trends, the authors of the report, Gina Westbrook and Alison Angus, write, “We [consumers] want to make the world better — either for our own sake or for humanity. We want new ways to make life both convenient and safe, inside and outside. Where we have the ability, we are balancing our time creatively. Amidst the anxiety and turmoil, we seek holistic, resilient solutions, more thoughtful consumption and, in some cases, ways to fight back.”

They note that resilience and adaptability are the driving forces behind the top global consumer trends in 2021. The pandemic created, influenced or accelerated each of these ten trends, forever altering consumer behaviour. I won’t go into detail on all the trends, but some require comment.

Regarding “Build Back Better,” consumers are demanding that companies care beyond the bottom line. They believe companies should help reshape the world in a more sustainable way, leading a shift from a volume- to a value-driven economy while reforming social inequity and limiting environmental damage.

“Craving Convenience” may not seem to be a new trend, but Covid-19 reduced impulse shopping, forcing consumers to plan “walk-ins.” Furthermore, the pandemic accelerated digital adoption, which sent e-commerce soaring. “Businesses are under pressure to rapidly adapt their operations to develop a resilient customer experience while maintaining convenience. Companies must preserve the swift and seamless shopping journey across all channels,” explain Westbrook and Angus.

Consumers embraced internet-connected devices to maintain their daily routines amid Covid-induced lockdowns. According to Euromonitor, video conferencing, smart appliances and technologies like augmented reality (AR) and virtual reality (VR) helped consumers form new habits around working, learning, exercising, shopping, and socialising (e.g., 34% of consumers take part in online video gaming at least weekly). These digital tools enabled “Phygital Reality,” which is a hybrid of physical and virtual worlds where consumers can seamlessly live, work, shop and play both in person and online. “Businesses can integrate virtual processes into their physical spaces to give consumers who prefer to stay home the comfort to venture out instead. Delivering virtually enabled at-home experiences remains imperative to drive e-commerce sales and gather data,” note Westbrook and Angus.

Now, consumers are both able and forced to be more creative with their time in order to get everything done, hence, “Playing with Time.” Per Euromonitor, businesses should provide solutions that address the consumer desire to maximise time, offering increased flexibility, especially with products and services that can be accessed from or near the home.

“Consumers are fed up. Distrust in leadership has become the norm. Bias and misinformation are causing a crisis of confidence,” write Westbrook and Angus. They explain that companies can cater to the “Restless and Rebellious” via more precise marketing on social media and gaming, where they can give consumers a voice and pressure social giants to take on misinformation.

The report finds that “Safety Obsessed is the new wellness movement.” Consumers demand touchless, cashless and clean. The fear of infection and increased health awareness drive demand for hygiene products and pushes consumers towards contactless solutions to avoid exposure. Euromonitor advises companies to implement enhanced safety measures and innovations that target concerns to reassure consumers. (Pursuant to “contactless,” the report reveals that 44% of consumers would be comfortable receiving a delivery via drone or robot.)

“Shaken and Stirred” is an interesting trend. The authors explain that the global pandemic reconfigured daily lives, testing mental resilience, restricting experiences, and provoking economic shocks (per the report, 73% of consumers rate depression and mental health as currently having a moderate or severe impact on their everyday life). As a result, consumers have a new understanding of themselves and their place in the world in pursuit of a more fulfilled, balanced and self-improved life. “Businesses must provide products and services that support resiliency for mental wellbeing and to help Shaken and Stirred consumers weather adverse circumstances to gain trust.”

Euromonitor says that companies offering digital products and services are best equipped to help Shaken and Stirred consumers access information and virtual engagements to promote self-improvement and lifestyle balance. The report finds that pre-pandemic, 46% of Generation Z and 50% of millennials preferred spending money on experiences over things, but restrictions on large gatherings are generating interest in at-home events (such as at-home coffee and tea tastings).

With incomes being impacted by Covid, consumers are cautious and frugal (e.g., there was a 10% growth in sales of discount retailers like Aldi and Lidl from 2019 to 2020). “Discretionary spending is declining due to the uncertain economic environment. Thoughtful Thrifters are prioritising value-added and health-conscious products and services,” writes Westbrook and Angus. Euromonitor suggests companies pivot towards value-for-money propositions, offering affordable options without sacrificing quality. Premium attributes should be reinforced with a new empathetic story and have a strong tie-in with health and wellness, self-care or mental wellbeing.

“Workplaces in New Spaces” seems to be an obvious trend as working from home is not a new concept, but Covid refined it. The authors note that Covid had “a rippling effect on consumer life, from clothing choices to technology spend to eating habits and beyond. Consumers are searching for new ways to define the beginning and end of their workdays, as they struggle to manage their time.” According to the report, 64% of professionals think work from home will become a long-term change. Businesses must support work-life balance, productivity and communication needs. Understanding the benefits and challenges of working remotely allows companies to bring the best of the office into the home.

Consumers – people – are resilient, they will acclimate and adapt. As Westbrook and Angus state, “purpose-driven initiatives will resonate with consumers in 2021. Amidst social unrest, consumers want the facts and expect brands to act. Communicating with compassion and supporting mental wellbeing are critical attributes to drive brand loyalty. Flexibility, agility, transparency, and technology will pave the way forward. With mounting uncertainties reshaping the world, businesses should prioritise and reinforce consumer, environmental and safety needs to foster a brighter future.”

• 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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Consumption held relatively steady (around 33 million liters) due to retail purchases, per Euromonitor. However, aside from the decrease in foodservice sales, ready-to-drink (RTD) coffee sales dropped slightly because of their tendency to be high impulse sales, which were hindered due to lockdowns during the pandemic. Currently, only bottled water outperforms RTD coffee.

According to Barry, coffee has strong retail prospects in 2021, particularly in RTD. He added that standard ground coffee sales had been declining but as more people started brewing at home, it became a growth category in 2020. Instant remains the only declining coffee category in the US market despite a slight spike in 2020 due to the Dalgona coffee fad (not a trend as it disappeared almost as quickly as it appeared).

Sales at chain coffee and tea shops fell 3.6% between 2019 and 2020 (many had the advantages of contactless, mobile ordering, even drive-thrus during lockdowns) while independent coffee and tea shops faired much worse with sales dropping 15% (most of which didn’t have the aforementioned benefits). “We don’t expect to see growth in independent coffee and tea shops until 2022,” said Barry.

He identified four key trends that will occur during the “new normal”:

Trend #1 — Slowing Down
Working remotely
Investment in the home (appliances, pets, etc.)
Lingering limitations on travel

Trend #2 — K-Shaped Economic Recovery
Some sectors exceed 2019 levels by early 2021; others may take years
Growing inequality, pressure on the middle price tier

Trend #3 — Digital Reliance
Massive acceleration of e-commerce adoption
Physical/digital lines get blurrier

Trend #4 — The Unwell Well
Interest in immune products falling
Mental wellbeing becomes a higher priority
A caffeine ceiling.

Regarding the “slowing down” trend, Barry pointed out that social distancing will last through at least most of 2021. More people are expected to continue working from home in the future – maybe not full time, but at least part of the time – which will affect on-premise coffee consumption. People will continue to spend more time at home because they invested in their homes during the lockdowns with home renovations, exercise equipment (like Peloton), pets, coffee machines (many consumers upgraded), etc.

In terms of the “k-shaped economic recovery,” Euromonitor expects the American economy will near recovery by Q4 2021. “The US is outperforming most of its comparable economies except Sweden,” said Barry, adding, “keep in mind that the recovery is not recovery for all people, it’s a fragmented recovery — a lot of people are still out of work or under-employed and will continue to be in 2021.

Amid this, there will be continued premiumization for consumers who were generally unaffected by the pandemic, although the foodservice channel will continue to be impacted. Barry explained that there will be economization for consumers who were affected by pandemic such as purchasing lower-priced or private-label brands, bulk sizes, etc. “There will be continued pressure on the middle tier, which will struggle in a polarized market.”

As the economy and markets recover, Barry said the foodservice/coffee shop sector recovery will splinter in two directions:

1-Efficiency oriented — fast, digital, personalized, contactless
2-Human oriented — slow, educational, sense of community

The reliance on digital (Trend #3) will continue as, once adopted it tends to stick around, said Barry, noting in particular, e-commerce adoption. “There is a huge and permanent shift to e-commerce.” [E-commerce sales of coffee, and tea, surged during lockdowns.]

Regarding the final trend, “the unwell well,” mental well-being appears to be replacing immunity as the key functionality of the future. “Americans are generally very stressed people, women and younger generations even more so,” shared Barry, noting that decaf sales are not doing as well in this environment as one would think. ‘Coffee mitigation,’ (functionality) not decaf will be key — there are lot of adaptogens out there that can be used in coffee. Products that add, rather than subtract, in order to create a less anxiety inducing coffee will be particularly popular, such as: cannabis, L theanine, cordyceps, rhodiola and Holy Basil (Tulsi). “This [mental well-being] is an exciting category as we move forward,” he said.

Summing up, the outlook for coffee in the US in 2021 is favourable for a variety of reasons, notably:

• Retail prospects will stay strong
• RTD coffee remains a growth category — expect cold brew to outgrow overall category
• Mental well-being is emerging as the hot functionality
• Habits that consumers picked up during pandemic will not go away (e.g., online shopping, brewing at home) — which is good for some sectors (coffee machine sales, retail coffee) and bad for others (foodservice/coffee shop channels, OCS, etc.)

Given these trends and outlooks, it will be quite intriguing to see how 2021 actually unfolds.

• 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 post Euromonitor International’s Top 10 Global Consumer Trends 2021 appeared first on Tea & Coffee Trade Journal.

This was this second time that I had the privilege of watching Andrea Illy, chairman, illycaffè share his insights about the pandemic and the lessons he learned from investing over 1000 hours studying regenerative agriculture. “We have to consider that the cause of Covid is the same cause as climate change and other imbalances,” said Illy. He stressed that the pandemic has forced us to no longer ignore the impacts of unsustainable actions, and urged the industry to focus on soil health, with an emphasis on carbon enriched soil health, and integrate the principles of virtuous agriculture. “We need to develop a sustainable society, one where we can satisfy our needs without compromising the needs of future generations.”

The talks continued with Carlos Ortiz, global Volcafe way manager, Volcafe, stating that Covid-19 has broken all boxes. But by doing so, it has prompted the industry to align agendas and priorities resulting in different sectors across all countries coming together to share information and solutions. “The virus reminded us that we are in this together and we need to take care of each other.”

Covid was not the only challenge that the coffee industry was faced with in this past year. The presentation by Janina Grabs, postdoctoral researcher, Environmental Policy Lab, Department of Humanities, ETH, Zurich, captured the core challenges that the industry continues to struggle with: climate change and low coffee prices. She described 2020 as a world where crises overlapped, which continue to result in challenges such as migration, poverty and environmental degradation. Grabs urged the industry to rethink the way that we approach sustainability in this new reality, with a strong emphasis on the importance for all sectors to work together.

It was a conference that recognised how each sector of the industry has been impacted, while reflecting on what needed to be done to move forward. The underlying message was clear — the coffee industry can no longer use the past as a barometer for the present. Instead, they need to seek out new ways to connect with customers, innovative ways to support the producers and farmers, and new sale streams. “We are not going to make as many trips to sit and interact in coffee shops for several years,” said Michael Schaefer, global lead, food & beverage, Euromonitor International. “For every player there is a vital and important need to think on how to do this differently and create new ways to interact with the customer.” He painted a picture of a new coffee experience, one where the barista was behind a screen or app, but still provided the consumer with the customised experience that they were seeking. Although, I don’t see myself using an advanced vending machine in my near future, I admit that I have become quite accustomed to ordering my favourite brew from my smart phone. I’m curious to discover how technology will shape the consumer experience and what this could mean for the café industry as a whole.

If there is one thing that Sintercafe demonstrated was that it is possible for all sectors to come together virtually to share their challenges and opportunities. These types of conversations are vital to share knowledge, strengthen relationships and to develop strategies that will build resiliency and sustainably move the coffee industry forward.

• Long-time T&CTJ contributor, Anne-Marie Hardie, is a freelance writer, professor and speaker based in Barrie, Ontario. She may be reached at: annemariehardie1@gmail.com.

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Howard Telford, the head of soft drinks for Euromonitor, one of presenters, said the decline in on trade sales began in March for most countries, sharing that across beverages, between 20-40% on-trade volume declines are expected in most markets in 2020.

The timeline for the recovery, according to Euromonitor’s analysts, is uncertain for on trade (both alcoholic and non-alcoholic). Furthermore, they said that in some markets, on-trade beverage volume may not recover to 2019 levels over the next five years.

Bars, restaurants, coffeehouses, and away-from-home events (AFH) are a vital consumer discovery and marketing platform for alcohol and non-alcoholic brands. Per the analysts, the importance of social occasions for beverages in general cannot be overstated (for both alcoholic and non-alcoholic drinks), so how can future innovation strategies adjust?

As AFH occasions have been almost non-existent during the pandemic, home entertaining has been the only option for many. Thus, bringing social occasions into the home is key.

“Virtual realms/virtual worlds and virtual tasting/tours, is essentially the transition from the physical to digital, and can provide some, if not all, of the answers in the new normal that we are entering now,” said Spiros Malandrakis, head of alcoholic drinks for Euromonitor.

But reaching consumers with physical products to test is vital. Since on trade and retail samplings were not possible, Telford said that during the pandemic, Costa Coffee (via parent company Coca-Cola) experimented by 50,000 new coffee samples direct to consumers homes in the UK.

Michael Schaefer, Euromonitor’s global lead, food & beverage, explained that it is important for companies to look at new opportunities to sell products either online or by direct to consumer sales.

Premiumisation was key to pre Covid-19 value growth. However, the pandemic and economic crisis have put the brakes on premiumisation as on trade has collapsed and economic concerns have changed consumer habits so brands must look for new selling strategies.

“One of the primary growth strategies in developed markets was the prioritization of top line value growth and premiumization and getting consumers to pay more per unit,” said Schaefer. “Covid-19 lead to collapse to entry-level channel, a lot of that experiential traffic has gone away, and consumer mobility and consumer spending have been [negatively] impacted. It’s a double whammy with less traffic and an economic crisis leading to consumers spending less.”

In coffee, this has translated to cutting back on premium items including fresh coffee beans, while there has been a growth in RTD, coffee pods, and instant coffee. “With coffee pods, this is not a new trend — we saw a rise in single serve machines/pods during last recession as consumers shifted away from on trade/coffee shop purchases. [Telford noted that sales of Keurig and Nespresso machines have been growing during the pandemic as consumers turned away from on trade purchases and increased their home brewing.]

The analysts agree that while the pandemic and economic crisis pose a huge challenge, there is money to be made, as “some consumer spending has to go somewhere — new indulgences while at the same time looking to economize wherever we can.”

Euromonitor’s analysts noted that while the economic downturn is driving the new search for value, the need for special occasions remains. For example, finding new experiences through home entertainment phenomenon such as capturing more occasions at home through machines (by offering more customization and more information) as well as finding new products for health conscious, home-bound consumers will be a big part of this process.

• 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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Describing the Proudly Local, Going Global trend, Gina Westbrook, director of consumer trends and Alison Angus, head of lifestyles research at Euromonitor International, in the February webinar stated, “Pride and power in local culture will become more sharply defined and relevant in 2020. The Proudly Local, Going Global trend captures consumer desire to adopt and appeal to a sense of individuality and growing national identity from local inspiration. There is also a growing expectation for multinationals to respond appropriately and creatively to local culture, social norms and consumer habits.”

According to Euromonitor, there are deeper ethical value shifts beyond self-expression and consumption driving this desire for localisation. Consumers (particularly younger ones) are prioritising environmental responsibility while helping local businesses thrive and reconnect with communities. The Proudly Local, Going Global trend is driving the rise of local consumer brands, especially in developing markets, going head to head with multinationals. For niche brands, regional and even global success has followed.

Multinational companies are keen on localising their production or acquiring already established local players. (This has been happening aggressively within the coffee industry. It is also occurring within the tea industry but not to the extent it has in coffee.) Per Euromonitor, localisation strategies also help multinationals better adjust to consumer needs that arise due to cultural differences or lower purchasing power.

“Being accessible, local and clean is becoming more important to survival,” said Westbrook and Angus in the original webinar.

As they noted, niche brands start their global route to success by accentuating their local credentials, keeping this at the forefront of consumers’ minds. “At the same time, multinationals are becoming more sophisticated in shaping their products to local tastes and preferences without losing their core brand identity. Tuning into the Proudly Local, Going Global trend is a compelling business strategy to win and retain consumer loyalty.”

Revising the trends outlook to reflect the impact of Covid-19, Angus said in an April webinar, that now/short term, amid the pandemic, there is an enforced retreat from globalisation, with consumers supporting local communities.

Personally, I have noticed a change in advertising from many national and multinational brands – from F&B to health and beauty care to technology to retail to automotive to insurance – during the Covid-19 crisis (on television and online) to show more compassion, concern and empathy for consumers and local communities.

In the near term, Angus noted that consumers’ safety concerns will drive hyper-localisation, while long term there will be a focus on localising business activities.

The Reuse Revolutionaries trend might be the most impacted by Covid-19. According to Euromonitor International, today’s sustainability leaders are tapping into new circular business models that aim to offer more with less through sharing, reusing, refilling and renting. “Increased environmental awareness is driving the Reuse Revolutionaries trend, especially for younger generations who are prioritising experiences over ownership. This is creating sustainable business opportunities,” said Westbrook and Angus in the February webinar. “Recycling labels are losing credibility due to a lack of knowledge about a product’s recyclability. New business models that avoid waste generation are appealing to more ethical consumers who are embracing sustainability through longer-lasting products.”

They explained that they days of businesses taking unlimited materials from nature and giving little back are coming to an end. Over 89 billion tonnes of materials were extracted from the global economy in 2018, per Euromonitor. However, only 9% of materials were being recirculated, meaning 91% were wasted, according to the 2019 Circularity Gap Report.

Recycling is no longer enough. Euromonitor revealed that Reuse Revolutionaries are now looking into ways to decrease their footprint with disruptive business models becoming mainstream. The “reuse economy,” where materials and products are reused several times, is booming. The reuse economy is critical to achieve sustainable development. This approach saves materials, prevents valuable products from going to landfills, reduces price volatility of raw materials, decreases supply chain risks and boosts resource efficiency.

According to Euromonitor’s Lifestyles Survey 2019, 60% of consumers are worried about climate change and 54% think they can make a positive contribution in the world with their purchases. As environmental awareness increases, consumers look for alternative eco-friendly products. However, more sustainable products often come with a premium price, and not all consumers are willing to pay more.

“Companies tapping into the Reuse Revolutionaries trend will need to find the balance between sustainability and convenience as consumers still rank efficacy, value and aesthetics as desired characteristics,” said Westbrook and Angus. “To do so, companies need to incentivise consumers to switch to reusable or refillable options that are both convenient and affordable. As more companies integrate reusable packaging into their product lines, this option will become less of a competitive advantage and more of a must-have.”

Coffee and tea companies have been among the leaders in offering sustainable products and packaging, while coffee shops, both independent and chain (national and multinational), have been also been actively offering reusable and recyclable cups, lids and straws. However, it is this area that will likely be most negatively affected by Covid-19 in the short and long term. For example, once the pandemic started, most coffeehouses suspended their use of reusable cups in favour of disposable ones (although many still gave consumers the discount if they brought a reusable cup with them).

In the April webinar, Angus said that now/during the crisis, consumers are rethinking green credentials — they are being more “clean than green.” In the near term, she explained that anxiety will shift consumer focus to health and safety and worrying about reinfection (hence, consumers may still favour disposable products over reusable ones). And although it may take a while, Angus said that there will be a slow return to reusable products in the long term.

But is “long term” at the end of 2020, 2021 or beyond? It is too early to tell, so as with everything else that has been impacted by Covid-19, we will have to wait and see how it all unfolds.

• Vanessa L. Facenda, editor Tea & Coffee Trade Journal. She may be contacted via vanessa@bellpublishing.com.

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