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.

The post Consumers’ desire for health & wellness through beverages remains strong appeared first on Tea & Coffee Trade Journal.

Green Coffee Price
The ICO Composite Indicator Price (I-CIP) averaged 151.94 US cents/lb in October, a 0.8% decline from September 2023. The I-CIP posted a median value of 151.58 US cents/lb, having fluctuated between 145.99 and 160.09 US cents/lb.

The Colombian Milds and Other Milds increased by 0.5% and 0.2%, to 185.97 and 183.95 US cents/lb, respectively, in October 2023. The Brazilian Naturals presented the strongest growth of 0.9%, reaching an average of 155.52 US cents/lb. However, Robustas retracted 4.1% to 118.83 US cents/lb. ICE’s New York market grew by 1.5% whilst the London Futures market shrank by 3.4%, to 155.91 and 105.40 US cents/lb, respectively.

The Colombian Milds-Other Milds differential grew 38.5% to 2.02 US cents/lb. The Colombian Milds-Brazilian Naturals differential shrank 1.1% to 30.45 US cents/lb, whilst the Colombian Milds-Robustas differential also expanded 9.9% from September to October 2023, averaging 67.14 US cents/lb. Meanwhile, the Other Milds-Brazilian Naturals differential contracted 3.1%, reaching 28.43 US cents/lb. However, the Other Milds-Robustas and the Brazilian Naturals-Robustas differentials expanded 9.2% and 21.1%, averaging 65.12 and 36.69 US cents/lb, respectively, in October 2023.

Arbitrage, as measured between the London and New York Futures markets, widened by 13.7% to 50.51 US cents/lb in October 2023.

Intra-day volatility of the I-CIP remained stable at 6.3% between September and October 2023. The Colombian Milds’ and Other Milds’ volatility also increased to 6.8% and 7.6%. Meanwhile, the Brazilian Naturals’ volatility rose by 0.5 percentage points to 8.6% from September to October 2023. The Robustas presented the smallest volatility increase, with a 0.1 percentage point gain, averaging 7.5% for the month of October. The London Futures market’s volatility decreased by 0.6 percentage points to 6.7%. Lastly, the New York futures market’s volatility moved in the opposite direction to that of London, expanding by 0.4 percentage points and reaching 8.1%.

The New York and London certified stocks moved in the same downward direction, where London retracted by 7.9% to 0.67 million 60-kg bags, whilst certified stocks of Arabica coffee reached 0.44 million 60-kg bags, a 10.7% decrease and the lowest figure since October 2022.

Exports by Coffee Groups – Green Beans
Global green bean exports in September 2023 totalled 7.8 million bags, as compared with 8.83 million bags in the same month of the previous year, down 11.6%. For coffee year 2022/23, exports of green beans were down 5.5% to 110.81 million bags from 117.28 million bags in coffee year 2021/22. The global macro-economic environment was not conducive to consumer confidence in coffee year 2022/23, with global inflation and interest rates in many of the key advanced economies high and rising, increasing the cost of living and thus reducing disposable income levels for a very large section of the world.

These conditions seemingly support a downturn in the consumption of coffee and consequently in global exports of green beans. Nevertheless, the global economy was not only projected to expand in calendar year 2023, but the outlook was also raised between April–October 2023 by the International Monetary Fund (IMF), which suggests otherwise. The drop in global exports of green beans in coffee year 2022/23 may therefore lie more with logistics/the supply chain than the economy and actual consumption of coffee. Average green bean exports amounted to 118.13 million bags in coffee years 2018/19–2021/22, as compared with an average 109.59 million bags for coffee years 2014/15–2017/18, a jump of 8.54 million bags. This suggests a build-up of stocks in non-producing countries which have been heavily drawn down in the past 12 months.

Shipments of the Other Milds decreased by 13.1% in September 2023 to 1.57 million bags from 1.8 million bags in the same period last year. For coffee year 2022/23, exports of the Other Milds were down 12.1% to 22.11 million bags from 25.16 million bags in coffee year 2021/22. Green bean exports of the Brazilian Naturals decreased in September 2023, falling by 13.4% to 2.69 million bags. For coffee year 2022/23, exports of the Brazilian Naturals were down 8.5% to 34.17 million bags from 37.33 million bags in coffee year 2021/22. Exports of the Colombian Milds increased by 6.7% to 0.87 million bags in September 2023 from 0.82 million bags in September 2022. For coffee year 2022/23, exports of the Colombian Milds were down 11.2% to 10.77 million bags from 12.14 million bags in coffee year 2021/22. For coffee year 2022/23, total green bean exports of the Arabicas were down 10.1% to 67.05 million bags from 74.63 million bags in coffee year 2021/22.

Overall, for the Arabicas, exports were seemingly negatively affected by the drawdown of stocks in consuming countries, with buyers staying away from the markets in coffee year 2022/23. Furthermore, substitution towards the more competitively priced Robustas, induced by the increased cost of living and reduced disposable income, would have also added to the downturn (see Green Coffee Price).

Exports of the Colombian Milds fell below the 11.0 million bags mark for the first time since coffee year 2012/13. These exports were primarily driven by Colombia, the main origin of this group of coffee, and weather-related disruption affected supply throughout most of coffee year 2022/23. Indeed, Colombia’s green bean exports contracted for the first 11 months of coffee year 2022/23, with only September 2023 showing an expansion. Figures for the year show that, overall, the country’s exports declined 13.1% to 9.42 million bags, the first time they have dropped below 10.0 million bags since coffee year 2013/14.

Green bean exports of the Robustas amounted to 2.67 million bags in September 2023, as compared with 3.09 million bags in September 2022, down 13.8%. For coffee year 2022/23, exports of the Robustas were up 2.6% to 43.76 million bags from 42.66 million bags in coffee year 2021/22. Of the four groups of coffee, the Robustas were the only group to experience positive growth in coffee year 2022/23, benefitting from macro-economic-induced substitution away from less competitively priced Arabicas.

The September 2023 exports represent the lowest September volume for the Robustas since the 2.58 million bags shipped in 2012 and were a result of the 43.4% decrease in exports from Vietnam, the world’s largest producer and exporter of the group, which only shipped 0.81 million bags – the lowest September exports since 2008 (0.79 million bags). Vietnam has been struggling with supply since the start of Q4 of coffee year 2022/23, when very low in-origin stock levels were reported at a time when the start of the harvest still remained three to four months away. The low September 2023 export levels appear to be a continuation of the industry’s deepening struggle with supply issues.

Exports by Regions – All Forms of Coffee
In September 2023, South America’s exports of all forms of coffee decreased by 3.4% to 4.74 million bags. For coffee year 2022/23, the region’s exports were down 11.0% to 50.59 million bags from 56.83 million bags in coffee year 2021/22. The region’s two largest producers and exporters, Brazil and Colombia, saw their total exports fall by 7.9% and 12.8%, respectively. South America’s fortunes are closely tied to the fortunes of the Arabicas and many of the same factors that explain the latter’s double-digit fall also explain the former’s. After all, from coffee year 2018/19 to 2022/23, 93.2% of the total green bean exports from South America were Arabicas, on average. The drawdown of stocks in consuming countries and substitution towards the Robustas are the two main factors. Two specific and additional factors are that (i) Brazil’s export performance was poor due to its relatively limited supply following two consecutive years of below-par harvests; and (ii) Colombia struggled with weather-impacted supply conditions that negatively affected the origin’s export volume.

Exports of all forms of coffee from Africa decreased by 1.9% to 1.21 million bags in September 2023 from 1.23 million bags in September 2022. For coffee year 2022/23, the region’s exports were down 1.4% to 13.53 million bags from 13.73 million bags in coffee year 2021/22. The relatively strong global demand for Robustas was the fundamental source of Africa’s positive export growth rate in coffee year 2022/23. Moreover, particularly during Q4 of coffee year 2022/23, the reduced volume of exports from the Asia and Oceania region, and more pointedly from Vietnam, strengthened Africa’s own export performance. Uganda, the largest producer and exporter of Robusta coffee in Africa, took the opportunity to fill the gap in the market left by Vietnam and the Asia and Oceania region as a whole.

In September 2023, exports of all forms of coffee from Mexico and Central America were down 9.2% to 0.74 million bags as compared with 0.81 million bags in September 2022. For coffee year 2022/23, the region’s exports were down 3.1% to 15.3 million bags from 15.78 million bags in coffee year 2021/22. The downturn was primarily driven by Guatemala and Mexico, which suffered 11.5% and 16.5% decreases, respectively. However, the mitigating factor that limited the region’s fall in exports to a low single-digit decrease was Honduras’ 13.5% increase.

Exports of all forms of coffee from Asia and Oceania decreased by 35.7% to 1.91 million bags in September 2023 as compared with 2.98 million bags in September 2022. For coffee year 2022/23, the region’s exports were down 0.9% to 43.56 million bags from 43.95 million bags in coffee year 2021/22. Asia and Oceania’s fortunes are closely tied to the fortunes of the Robustas and many of the same factors that explain the latter’s single-digit increase also explain the former’s. From coffee year 2018/19 to 2022/23, 89.1% of the total green bean exports from Asia & Oceania were Robustas, on average. In coffee year 2022/23, Vietnam’s exports were up 0.4% to 28.29 million bags from 28.19 million bags in coffee year 2021/22.

Exports of Coffee by Forms
Total exports of soluble coffee decreased by 27.3% in September 2023 to 0.75 million bags from 1.03 million bags in September 2022. For coffee year 2022/23, soluble coffee exports were down 5.7% to 11.47 million bags from 12.16 million bags in coffee year 2021/22.

Soluble coffee’s share in the total exports of all forms of coffee for the year to date was 8.7% in September 2023, down from 10.4% for the same period a year ago. For coffee year 2022/23, soluble coffee’s share of the total exports was 9.3%, the same as in coffee year 2021/22. Brazil is the largest exporter of soluble coffee, having shipped 0.27 million bags in September 2023 and 3.77 million bags in coffee year 2022/23.

Exports of roasted beans were down 26.7% in September 2023 to 55,203 bags, as compared with 75,355 bags in September 2022. For coffee year 2022/23, roasted coffee exports were down 16.0% to 0.71 million bags from 0.84 million bags in coffee year 2021/22.

Production and Consumption
Under the current circumstances, the estimates and outlook of production and consumption for coffee years 2021/22 and 2022/23 remain the same.

World coffee production decreased by 1.4% to 168.5 million bags in coffee year 2021/22, hampered by the off-biennial production and negative meteorological conditions in a number of key origins. However, it is expected to bounce back by 1.7% to 171.3 million bags in 2022/23. Increased global fertiliser costs and adverse weather conditions are expected to partially offset the positive impact of biennial production from Brazil, explaining the relatively low rate of growth in coffee year 2022/23.

The impact of biennial production is anticipated to drive the outlook for Arabica, which is projected to increase by 4.6% to 98.6 million bags in coffee year 2022/23, following a 7.2% decrease in the previous coffee year. Reflecting its cyclical output, Arabica’s share of the total coffee production is expected to increase to 57.5% from 55.9% in coffee year 2021/22. South America is and will remain the largest producer of coffee in the world, despite suffering from the largest drop in output for almost 20 years, which fell by 7.6% in coffee year 2021/22. The recovery in coffee year 2022/23, partly driven by biennial production, is expected to push the region’s output to 82.4 million bags, a rise of 6.2%.

World coffee consumption increased by 4.2% to 175.6 million bags in coffee year 2021/22, following a 0.6% rise the previous year. Release of the pent-up demand built up during the Covid-19 years and sharp global economic growth of 6.0% in 2021 explains the sharp bounce back in coffee consumption in coffee year 2021/22. Decelerating world economic growth rates for 2022 and 2023, coupled with the dramatic rise in the cost of living, will have an impact on the coffee consumption for coffee year 2022/23. It is expected to grow, but at a decelerating rate of 1.7% to 178.5 million bags. The global deceleration is expected to come from non-producing countries, with Europe’s coffee consumption predicted to suffer the largest decrease among all regions, with growth rates falling to 0.1% in coffee year 2022/23 from a 6.0% expansion in coffee year 2021/22.

As a result, the world coffee market is expected to run another year of deficit, a shortfall of 7.3 million bags.

The outlook is taken from the newest publication of the Statistics Section of the Secretariat of the International Coffee Organization (ICO), the Coffee Report and Outlook (CRO). To download the full CRO or for more information, visit the ICO website: icocoffee.org.

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Order income rose by 3% from 1.5 billion EUR to 1.55 billion EUR, while total sales increased by 2.6% from 1.41 billion EUR to 1.44 billion EUR. Global machine sales accounted for two thirds of Syntegon’s total sales; the remaining third was from Syntegon’s service offering. 

The company’s sales were distributed relatively evenly across the key global markets: 32% in Europe, 33% in North America, and 35% in Asia and the rest of the world, with America’s share increasing slightly and Europe’s decreasing. 

Dr Peter Hackel, chief financial officer of Syntegon, commented, “In a year of challenging conditions, we succeeded in developing our business in a stable fashion thanks to our proven customer and supplier relationships, our global positioning, and our innovations.” 

Trends in 2022 

The trend towards more sustainable packaging solutions persists in the food industry. Syntegon is seeing this increasingly in its new machine business and in its services – for example, when retrofitting existing systems to efficiently handle sustainable packaging materials. 

Syntegon launched several new developments in 2022 with sustainability as their focus. It integrated lock-style technology into its proven Sigpack TTM cartoner platform to cut energy and material costs. The new PMX packaging machine for ground coffee and whole beans processes recyclable mono-materials and enables condition monitoring to save energy and materials. 

The process towards increased automation, accelerated by the Covid 19 pandemic, continued in 2022. Syntegon played its part in the trend towards increased automation in the food industry with various innovations. Syntegon automates process steps such as handling, feeding, and loading with the advanced version of its highly flexible Robotic Pick & Place (RPP) platform. Last year, Syntegon experienced strong demand for its processing and packaging technology in the food industry, particularly in North America. 

“Our business is centered on the requirements of our customers. This is why we are always working on new processing and packaging solutions for the pharmaceutical and food industries, and are driving market trends such as sustainability, digitalisation and automation,” said Dr. Michael Grosse, CEO of Syntegon. 

Sustainability and responsibility 

In 2022, Syntegon continued its efforts towards environmental, social, and corporate governance (ESG). One of the company’s goals is to reduce its CO2 emissions by 25% until 2025 compared to 2019. To this end, Syntegon built new photovoltaic plants at its sites in Beringen (Switzerland), Crailsheim (Germany), Dresden (Germany) and Verna (India), among others, in 2022. 

The company also supports its customers on their journey to more sustainable manufacturing. A newly developed life-cycle assessment, certified by TÜV Rheinland, a German association for technical inspection, enables Syntegon to offer a transparent view of their machines’ carbon footprint to manufacturing companies in the food industries. 

Having recently joined the Science Based Target Initiative, Syntegon is going to have its emissions reduction targets validated in the months ahead. The company will also publish its first sustainability report at midyear. 

Research and development 

In 2022, Syntegon continued to pursue market-specific research projects at more than ten competence centers. The company’s 1,400 employees in research and development produced many innovations, as is reflected in the increased patent and patent application count of 2,000 (2021: 1,800). At 49 million euros, R&D spending in 2022 was higher than in the previous year (46 million euros). 

Extended portfolio of services and digital solutions 

In 2022, the expansion of the company’s services and digital solutions portfolio increased the standard to which the company could cater to daily customer needs for its 67,000 installed machines worldwide. Syntegon added service agreements to its portfolio to offer effective asset and maintenance management services to customers at fixed prices. 

The new cloud-based software, Synexio, enables machine and production data to be collected, evaluated, and visualised in real time, pushing ahead with the digitalisation of machine connectivity and interfacing a growing number of customer machines. 

Syntegon reorganised its supply chain structure for spare parts last year, which enabled the company to improve its delivery times and punctuality in customer projects. The service business grew in response to increasing demand for service agreements and digital solutions, particularly in America. 

“We will again contribute in 2023 with our solutions, doing our part to provide people with safely packaged food and medicines produced to the highest manufacturing standards. This we do in keeping with the spirit of our mission – processing and packaging for a better life,” said Dr Michael Grosse. 

For Syntegon’s full 2022 financial year overview, visit: syntegon.com. 

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During the most serious spell of the pandemic from 2020 to the first quarter of 2022, Japanese green tea production, domestic consumption and exports showed only temporary changes and the overall trend in the past decades recovered in a short period of time.

Japan produces steam-type green tea mainly, and the national production has been gradually decreasing in the last two decades according to the statistics of the Ministry of Agriculture, Forestry and Fisheries (MAFF). The total yearly production has maintained between 80,000 to 100,000 metric tonnes (mt) in the same period except in 2020 and 2021 when production dropped to 69,800 mt and 78,100 mt, respectively.

“The main harvesting season in Japan is from the end of April to May, when the best quality tea is manufactured from the first flush of the year. While some farmers pluck the spring flush only, others harvest leaves several times till October, and those second, third and autumn/winter teas are well-accepted as ordinary quality tea. Consequently, Japanese green tea producers can adjust their crop yield by reducing or increasing the number of harvesting times,” explained Osami Moriyama, managing director, Japan Tea Central Public Interest Incorporated Association. “Additionally, tea can be stored for a longer period of time and the increased stock will become an additional supply, which tends to suppress demand resulting in a drop in prices. This is the main reason for the sudden decrease in 2020, but it could have bounced back by 12 percent from the existing tea field in 2021.”

The first ever State of Emergency was issued nationwide in April and May 2020, however, it didn’t intend to discourage the agricultural sector. Therefore, the spring flush tea was manufactured as usual, but it seemed many tea farmers predicted the shrink in demand and reduced later harvests resulted in the decrease of the total crop of the year.

Moriyama said that Japanese tea farmers are facing an aging problem and shortage of successors over the years, which is causing the increase of abandoned tea fields. “[However], tea bush can produce leaves for several decades and it is possible to store made tea without deteriorating in quality for a longer period of time if it is kept under air-tight and cooler conditions.” He added that these are the differences between fresh vegetables and tea. “Therefore, the impact of the pandemic on the tea industry was rather limited and it could get back on track quickly.”

Covid Minimally Affected RTD Sales

One of the significances in Japanese green tea consumption is, about one-fourth of green tea is drunk in ready-to-drink (RTD) form, which has steadily increased since its launch in 1985 when ITO EN put the world’s first canned green tea on sale. While RTD tea has more or less maintained its sales during the pandemic, demand for leaf tea rose sharply in a short period time when ‘staying home’ was strongly recommended. In addition, consumers buy more tea through internet shopping which grew from 9 percent of all green tea purchases in 1999 to 15.1 percent in 2020 per MAFF. Although there is no clear data, it seemed that the restrictions of going out of the house encouraged consumers to order any sort of food and goods online.

Japan’s tea production, imports and demand Source: MAFF

Green Tea Exports Surge

Japan’s green tea export has expanded in recent years, especially, the demand for organic tea and powdered tea including matcha continues to be strong. In 2021, Japan exported 6,179 mt of green tea in total, of which 3,155 mt or 51 percent was leaf tea, and the remaining 3,024 MT or 49 percent was powdered tea. The main export destinations for organic green tea are the United States, the European Union and the United Kingdom. In 2021, Japan exported 2,254 mt of green tea to the US, of which 1,628 mt or 73 percent was powdered tea, and 604 mt or 26.8 percent, was Japanese Agricultural Standard (JAS)-certified organic tea. Meanwhile the EU together with the UK imported 834 mt of Japanese green tea, of which 646 mt or 77.4 percent was organic. The EU only imported 775 mt of Japanese green tea, comprising of 467 mt or 60 percent of leaf tea and the rest 307 mt or 40 percent of powdered tea per MAFF.

Not only the Covid-19 outbreak but other various factors are now influencing the tea industry, such as the rising cost of fuel, electricity, fertilisers, packaging materials, transport and so on, triggered by the Russia’s invasion to Ukraine in February 2022. The sharp depreciation of Japanese yen against US dollar has been affecting to the nation’s overall economy. All those factors are lessening the profitability in the tea trade.

“The Japanese tea industry has more than 800 years of history and has created its unique culture over the centuries. We pay the utmost respect and place importance on this heritage,” shared Moriyama. “However, we shouldn’t stick to the past and need to accept the latest trends which might be considered a wrong path by previous generations.” He added, “If we do nothing, the tea market will not grow in the years ahead. We will need to find ways to provide Japanese tea that meets the requirements or preferences of younger or overseas consumers.”

A leading Japanese green tea brand and the largest RTD green tea manufacturer, ITO EN, experienced a 10 percent growth in leaf tea sales in early 2020 during stay-at-home restrictions. Large size boxes of tea bags met a good demand. While RTD green tea decreased in the same period, it has been recovering since 2021. Export of leaf tea has grown steadily in spite of the pandemic and the sudden surge of sea freight in the last few years. Akihiro Murase, public relations officer, ITO-EN, said “We established the new medium-to-long-term business plan in June 2022. One of the key strategies is to globalise our Oi Ocha brand products. We will try to familiarise the Japanese tea culture, not only to the North America but also throughout the world.”

Japan’s Lesser Known Black Tea Market

Approximately 90 percent of black tea marketed in Japan is imported from four countries; roughly 40 percent from Sri Lanka, 20 percent each from India and Kenya, and 10 percent from Indonesia. A trade association for black tea, the Japan Tea Association (JTA), focuses on imported black tea and promotes its healthy market growth along with government authorities, embassies of major tea-producing countries as well as its 50 member companies.

“Japan’s black tea import had remained stable more than a decade, between 16,000 mt and 17,000 mt a year until 2021,” said Kohei Akiba, managing director of the JTA. However, the import quantity from January to October 2022 showed a decline of 87.1 percent compared with the same period in the previous year, decreasing from 14,297 mt in 2021 to 12,448 mt in 2022 according to Trade Statistics of Japan, Ministry of Finance. In addition to the Russia/Ukraine war, it appears that the Sri Lanka’s political and economic turmoil, which intensified in 2022, has started to affect the Japan’s black tea market. Sri Lanka’s annual tea production in 2022 ended up at 251,499 mt, a 16 percent decrease versus 2021 and the lowest since 1995 when the country produced 245,900 mt per the Sri Lanka Tea Board.

The total value of imported black tea in the same period increased from JPY 9.8 billion in 2021 to JPY 11.1 billion in 2022 or 113.1 percent. “It was caused by the price hike of black tea in producing countries. Besides, the depreciation of the Japanese yen in the foreign exchange market is having much impact,” said Akiba. The Japanese yen has started to fall sharply since March 2022 when one US dollar traded at around JPY 120, then hit JPY 150 in October for the first time in 32 years.

Those unfavourable business circumstances that followed the Covid-19 epidemic have continued for some time. The JTA, however, didn’t suspend most of their black tea promotional efforts including seminars, trainings, various black tea-related events by taking cautious anti-infectious measures in the last three years. Moreover, they are considering new activities such as special iced tea promotions to further expand the black tea market in the country.

Japan’s Coffee Market Holds its Own During Covid

Coffee is supposed to be the most affected non-alcoholic beverage together with the dining industry when restaurants and cafés were requested to restrain operation or shorten opening hours to curb the spread of the Covid-19 infection. “Obviously, the wholesale of coffee to the catering trade had plunged in a certain period time. Also, many note that when most cafés were closed, coffee lovers shifted to enjoy more cups at home,” said Seiichiro Oyama, executive director of the All Japan Coffee Association (AJCA). “In addition, consumers were required to buy more coffee online when they stayed home to keep themselves safe from the disease. However, the available statistics do not clearly show these changes in sales channels or consumer habits.”

According to the AJCA’s statistics, based on the Trade Statistics of Japan, Ministry of Finance, and the AJCA’ survey, Japan’s domestic coffee consumption had shown a steady increase to 470,213 mt in 2018. However, it had decreased for three consecutive years; 452,903 mt (2019), 430,719 mt (2020) and 423,706 mt (2021). The estimated figures from January to October in 2022 showed an increase of 1.1 percent to 363,719 mt versus the same period in 2021, which was 359,713 mt. “Coffee consumption in Japan was likely affected by the pandemic to some extent. However, the decrease started in 2019, which was before the spread of the infection, and the slight upturn in 2022 was not sufficient to return to pre-pandemic levels. Therefore, not only Covid-19 but also other factors may have been affecting the coffee market”, Oyama commented after carefully analysed the trends.

Japan’s tea production and area under tea. Source: MAFF

Other consumer surveys conducted by the AJCA indicated that the volume of regular coffee and home consumption increased significantly in 2020. Whereas instant, liquid, single-serve and decaffeinated coffee products have more or less maintained their current sales trends. Oyama said the coffee market is becoming more diversified, so coffee companies need to offer products that meet consumer demand. “Furthermore, public interest in the health benefits of coffee, the sustainability of the coffee industry, and the recycling or reuse of used coffee grounds has grown noticeably in the last few years,” he shared.

Most of coffee consumed in Japan is imported from Central and South America, Africa and Asian countries located within the ‘coffee belt’. Meanwhile some Japan’s southern-most islands are situated at the northern limit of the coffee belt, and have been producing coffee nearly half a century, although its volume is limited and the cost of production is much higher than major producing countries. In addition, some international coffee companies have started to become involved in coffee production with the cooperation of local farmers in recent years. Oyama encourages those movements, noting that “geographically, Japan cannot become one of the main coffee producers in the world. However, its coffee can be marketed as one of the specialties in the region, and hopefully provide a new joy of coffee for connoisseurs.”

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

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“Let food be thy medicine and medicine be thy food” harkens back to Hippocrates, the Greek founder of western medicine. This famous quote is a thousand years old, though it has never been as relevant as in the post-Covid era.

Functionality is the most prevalent trend in the non-alcoholic beverage industry, said Jochen Kistner, director of category marketing, EMEA, at Chicago-based Archer Daniels Midland, adding that what originally began in Europe in the 1980s with energy drinks for athletes has now turned into a much broader social phenomenon, with 68 percent of consumers worldwide in 2021 preferring to buy drinks with additional functional benefits.

The list of functional ingredients used in the coffee industry is long and constantly grows as more companies enter the segment with new offerings. Cannabidiol, mushrooms, superfruits, spices, antioxidants, and herb extracts are the most common examples, but the opportunities in this area are far from being exhausted.

The market is heading up

Analysts expect functional coffee to enjoy a strong growth in popularity in this decade. International think tank, Research and Markets, projects global sales to rise on average 5.9 percent per year between 2022 and 2027.

Image: Capsoil FoodTech, by Prodalim, Ltd

Technavio, a London-based consulting firm, forecasts a similar growth pace in 2021-2026, resulting in a rise in global sales by USD $2.36 billion during this period.

There is no consensus between the analysts about the current size of the global market, though. ReAnIn, an Indian research and consulting firm, also puts the compound annual growth rate of the global functional coffee market at 5.9 percent in 2018-2028, calculating however, that this would boost sales by only $1.1 billion to around $3.3 billion. This confusion primarily comes from the difference in research methodology and criteria of what coffee to attribute to functional.

Nevertheless, all analyst groups agree that the demand will rise in the next several years as consumers want double-duty from their favourite beverages.

“Consumers are developing an affinity for functional beverages seeing them as a suitable, convenient, and healthy alternative to soft drinks. The organoleptic versatility associated with functional coffee makes it open to manufacturers to innovate alongside the healthy trends,” Research and Markets said.

Technavio estimated that one of the key factors driving the global functional coffee market growth is the increasing popularity of coffee among millennials.

“An improvement in economic conditions and an increase in job opportunities have made different types of coffee more affordable to young consumers. Millennials tend to spend more on premium beverage brands and are also keen to experiment with new types, brands, and flavours of beverages,” the analysts said.

Millennials also tend to socialise more, especially in coffee shops. This has led to a surge in the number of coffee shops, which has further strengthened the global functional coffee market. In addition, rising disposable incomes in emerging Asian, Eastern European, and Latin American consumers is also contributing to the growth.

No compromises

“The challenge for developers is to find the right balance between functionality and taste,” Kistner said, adding that consumers want targeted nutrition, including ingredients benefitting alertness, relaxation, or concentration. On the other hand, consumers don’t want to compromise on taste to enjoy the product.

When functional ingredients become part of a beverage formulation, product appearance, taste, and even texture can all be impacted, which often becomes a challenge.

“Our first attempts at functional coffee were ridiculous as hell. We just took ginger root, grated it and kneaded it into the coffee. It was still ugly. But more importantly, it had nothing to do with that idea of a functional drink,” said Alexander Afanasiev, spokesperson for Biwell International SA, the manufacturer of Swiss premium, functional infused coffees. In 2019, the company launched Da Maestri capsules, a family of offerings compatible with Nescafé Dolce Gusto’s professional-grade single-serve coffee machine.

“At this point, we clearly realised the obvious — we will have to work very hard and for a very long time,” Afanasiev said, adding that it took the company years of time and tonnes of R&D to make a range of coffee that is functional and has an appealing taste.

Image: Biwell International/Da Maestri

The types of functional coffee mostly in demand on the market are those improving brain and memory function and cardiovascular system. The Covid-19 pandemic also bolstered the demand in the segment of coffee for immunity and digestive system, Afanasiev said.

SolaBev, a US-based proprietary single-serve capsule system for making filter coffee, also spent a lot of time developing functional coffee drinks, said Michael Szyliowicz, the founder. “The two types of drinks we have developed are CBD-infused and mushroom coffees. Both types represent trends that I believe will continue to grow as more consumers become aware of the benefits of both,” he added.

One of the most surprising discoveries the SolaBev team made was that the functional coffee market was full of misleading information about the available products. “Last year, one of our coffee roasters partnered with a CBD company to provide single-serve capsules infused with their CBD. Although there are many different coffees available with CBD, we found that most of the claims that were made were very misleading. Most of the CBD coffees for sale tout the amount of CBD in the bag or in the K-Cup, but do not address the issue of how much CBD is actually present in the cup after brewing,” Szyliowicz said.

“We tested a number of brands and found that most of the claims were wildly inaccurate. Because SolaBev is a proprietary capsule, we were able to ensure that the amount of CBD claimed, in this case, 15mg, was the amount measured in the cup,” he added.

CBD-infused coffee is believed to be one of the fastest-growing segments of the functional coffee market. Analysts put the annual growth in sales on the CBD coffee market between 14 percent and 27 percent in the coming years. On the other hand, coffee with mushrooms is a slow-growing category, Szyliowicz said.

Health benefits under question

The concept of functional coffee is tightly linked to adaptogens — plants and mushrooms believed to help your body respond to stress, anxiety, fatigue and overall well-being.

Over the years, people used to take adaptogens by adding them to food or beverages or take them as tinctures. Their popularity spiked during the Covid-19 pandemic, but so far, the science of adaptogens remains disappointing.

Image: Haley Sliwa

The term ‘adaptogen’ was first proposed in 1940 by Soviet scientist Nikolay Lazarev when he described “Schisandra chinensis” (plant with high potential for beneficial health effects such as anti-cancer, anti-aging; anti-obesity, anti-diabetes) and other herbs with the following definition: plant-originated adaptogens that can non-specifically enhance the human body.

Soviet nutritionists heavily studied several adaptogens during the World War II in an attempt to improve the performance of soldiers on the battlefield. In the following years, more than 1,000 studies were conducted on dozens of various adaptogens. In the 1980s, adaptogens even became a part of the popular myth of the Kremlin Pill – a legendary top-secret medicine that was said to cure all diseases.

A 2018 review conducted by a group of Chinese researchers on studies of adaptogens showed the clinical application of plant-originated adaptogens and their use in healthcare products remains in the preliminary stage. Some of the most widely used and popular adaptogens have never been adequately tested or appeared to have no suggested health benefits.

In a blog at the website of McGill University, Jonathan Jarry, MSc, pointed out that adaptogens have had a thick glop of marketing smeared all over them. “Product labels and social media influencers will parade limitless claims: adaptogens are said to sharpen your memory, boost your sex drive, rid yourself of exhaustion, help stabilise your blood sugar, and fight cancer. They might also assemble your IKEA furniture for you and help you with your financial investments if they had opposable thumbs and direct access to your bank account,” he said.

The relatively few studies on adaptogens done in humans tend to be disappointing. They often lack randomisation, recruit only healthy people, and they don’t specify the dose of the herb that was tested. Reviews of the evidence often conclude that, at best, adaptogens may help with stress and fatigue and that more studies are needed. At worst, there is no indication they have the claimed clinical benefit, according to Jarry.

The same goes for CBD, which seems to be everywhere, but scientists still don’t know much about it. The Food and Drug Administration (FDA) of the United States has approved only one drug containing CBD, Epidiolex, after clinical trials found it reduced seizures in children with two rare, severe forms of epilepsy. However, most studies on the effect of CBD on the human body remain controversial.

Scientists admit that CBD, as well as some other ingredients currently widely used to produce functional coffee, enjoy a lot of hype, but as customers are constantly becoming more demanding and knowledgeable, the long-term growth of the market is not guaranteed.

• 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 study, titled Fairtrade certification and producer resilience in times of crises and conducted by Scio Network and Athena Infonomics, examined the experiences of Fairtrade and non-Fairtrade coffee, banana and flower producers in Indonesia, Peru, and Kenya, finding that households belonging to Fairtrade-certified producer organisations were 12% less likely to report “a high or very high impact” from COVID-19, as compared to non-Fairtrade households.

“Our research shows that Fairtrade certification increased the social well-being of households by up to 20%, as opposed to no or alternative certification,” said Manuela Günther, lead on monitoring and impact evaluation at Scio Network and the study’s research manager. “Households related to Fairtrade certified producer organisations also had a higher economic resilience, which helped them to better weather the impact of COVID-19 and will contribute to greater resilience in the face of future crises as well.

In preparing the study, the researchers developed a resilience index based on the United Nations Food and Agriculture Organization (FAO), which includes four criteria, covering social wellbeing, economic resilience, good governance, and environmental integrity. Households from Fairtrade certified producers scored 9% higher on the overall index than non-certified counterparts (64% compared to 55%). On the dimension of social wellbeing – which includes elements such as food and nutrition security and children’s school attendance – Fairtrade certified producers scored 18% higher. Economic resilience – which includes financial literacy, bookkeeping, insurance, and savings – received a score of 6% higher. Good governance and environmental integrity scores, on the other hand, were more similar between Fairtrade and non-Fairtrade households.

“Although good governance and environmental integrity are very important in their own right, during the pandemic we found that aspects of social wellbeing, such as income diversification and food and nutrition security, and economic resilience, meaning access to credit for producer organisations and savings among households, were associated with a lower impact from COVID-19,” noted Bilal Afroz, senior consultant at Athena Infonomics and co-author of the report.

“Our study is one of the first to examine the key elements that empowered some producer organisations and farmer and worker households to get through the most intense period of COVID-19 in better shape than others,” Mr. Afroz added.

In analysing different product supply chains, Kenyan flower workers’ households belonging to Fairtrade producer organisations scored the highest with a resilience score of 70%, followed by Indonesian coffee farming households (67%), and Peruvian banana farming households (53%). In each case, these scores are higher than those of the non-Fairtrade counterparts, with the greatest difference between certified and non-certified farmers observed in coffee farmers. Fairtrade certified households in coffee value chains, in fact, score a full 13% points higher in the resilience metrics, compared to non-Fairtrade households.

The study also identifies key factors that relieved some of the burden of the pandemic on Fairtrade-certified organisations and households, including whether an organisation had pre-existing financial sustainability and access to credit; whether it received support from Fairtrade’s €15 million COVID-19 Relief and Resilience Fund; and whether it delivered income diversification and food security initiatives for its members and workers.

The report, commissioned by Fairtrade International through funding from the German Ministry for Economic Development Cooperation (BMZ) and the Swiss State Secretariat for Economic Affairs (SECO), echoes the findings from a similar Fairtrade study released in June 2022 on producer resilience. Key findings are being discussed at a virtual panel event on 18 October.

“We know that with climate change and current global political and economic instability, farmers and workers will face increasing challenges in the near future,” said Dr. Arisbe Mendoza, director of global impact at Fairtrade International. “That’s why we call on all actors to ensure that farmers continue to receive emergency cash contributions to tackle urgent health and safety needs and losses and damages, fairer prices through long-term trade relationships so they can build financial stability, and access to credit and income so that they are empowered to invest in a more sustainable and diverse mix of income streams.”

“The conclusions from this report are clear,” Dr. Mendoza added. “And we urge everyone – from companies and governments to civil society actors and beyond – to read this report, understand its lessons and apply them immediately, so that agricultural households and communities can strengthen their resilience to face the expected growth in shocks and stresses set to come.”

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The global demand for energy-efficient and energy-saving coffee machines is steadily growing, amid the ever-rising gas and energy prices and high inflation in many Western markets these days.

The ongoing military conflict between Russia and Ukraine and, associated with this, the almost complete suspension of gas supplies from Russia to the EU, has put a significant pressure on the industry, forcing most of its major players to consider updating their ranges by rolling out new more energy-efficient, sustainable roasting machines.

In accordance with the recent report by the global analyst agency Mordor Intelligence, the global coffee roaster market will grow by 6.5 per cent annually between 2022 and 2027. In the meantime, the Allied Market Research’s latest report, “Coffee Roaster Market by Type” finds that the global coffee roaster industry generated USD $448.90 million in 2021, and is expected to reach $741.90 million by 2031, witnessing a CAGR of 5.2 per cent from 2021 to 2031.

Most analysts expect energy-efficient and energy-saving roasters will show the highest growth rates of the entire market, which just started to recover from the pandemic and its consequences.

In general, per Mordor Intelligence, the pandemic has reduced coffee sales by around 50 per cent in Europe and around 25 per cent in the US, having a negative effect on coffee roaster suppliers, which saw their sales decline significantly in 2021 and 2022. Additionally, lockdown and social distancing measures have led to a reduction in coffee consumption. The biggest decline being observed in the HORECA segment, where the overall sales of roasters of all types fell by up to 80 per cent during the pandemic.

The situation has started to improve this year when roasters’ sales in many key markets picked up. However, the beginning of an energy crisis in the EU and the US has put an end to the efforts of the market and producers for more active growth. Moreover, the ever-rising energy prices have resulted in a shift of consumer preferences towards machinery which is characterised by reduced energy consumption and higher efficiency being part of a global demand for energy-saving at present.

Many analysts expect the market of energy-saving/sustainable coffee roasters and machinery will continue to grow this year and in 2023. More and more coffeehouses will also be giving a preference to more energy-efficient coffee machines.

In addition to energy savings, the driving force for the market will be maintaining high consumer demand for the fresh and aromatic coffee that the roasting process provides and regular introduction of new coffee aroma blends by global brands. Furthermore, new market trends are emerging as well as the ongoing shift of consumer preferences in the global roasters market.

Global challenges have increased the focus on more efficient and sustainable roasting machines. Image: Scolari Engineering

Fabio Clivio, project director of Scolari Engineering, a leading manufacturer of roasting machines, said the move to more energy efficient/saving/reducing/sustainable packaging and processing machinery really began after the 2021 United Nations Climate Change Conference (COP26), while the demand really ‘kicked into high gear’ after the 48^th G7 summit from 26-28 June 2022 in Schloss Elmau, Germany.

“With the high energy costs, it is mandatory to increase the efficiency of the roasting process,” said Clivio. “For Europe, efficiency is a matter of survival now. In the USA, there is a request to make the roasting process more sustainable and to add net technology to reduce the gas consumption.”

According to Clivio, Scolari is in line with the current market trends, regularly adjusting its portfolio in accordance with market demands. That means regular introduction of special features and various improvements in the existing range of the company. “All new equipment is equipped with a green bean preheater (GBPH), while existing roasters can be retrofitted with GBPH,” he said. “Several improvements have also been developed to increase efficiency of the gas burner and to combine with sustainable electrical heat generators. We also must reduce the gas consumption to a standby and quenching process.”

Representatives of Bühler Group – another major player in the global roasters market – have also confirmed the ever-growing demand for energy-saving coffee machinery, adding, however that it cannot be considered a completely new trend in the market.

As Michael Blatter, Bühler’s head of market segment coffee explained, the trend towards more efficient and sustainable coffee plants has been around for many years and it is difficult to say when and where it exactly started. “Consumer requirements and marketing demand as well as the culture and positioning of companies are defining investments towards this direction. The global situation and challenges have increased the focus on efficiency and sustainability,” he said. “This tendency can be seen across the globe and you would be able to find companies in every country who are willing to invest in sustainable solutions. We see the highest demand in Europe but it is also increasing fast in North America and Asia.”

Blatter added that sustainability must be approached in a holistic way and roasting cannot be seen isolated. “Today the scope of processes in the factory and the entire supply chain must be assessed and taken in consideration to design a sustainable plant.” He said that high-capacity roasters still need gas and coffee still needs certain temperatures to create the perfect flavour profile. “Therefore, we are customising entire production lines to increase efficiency. For example, how to use the energy of the exhaust air in the line or even in the entire factory. We have also introduced a preheating unit for our InfinityRoast. With this unit we can save up to 30 per cent of energy. Further capacity can be increased by up to 20 per cent,” Blatter shared.

Part of roasting machine manufacturers’ plans is more active promotion of their new energy-saving and efficient coffee machines during the forthcoming major industry exhibitions. Most of these suppliers have put big hopes on them, taking into account that the pandemic did not allow them to organise a live showcase of their latest products for the major foreign audience in 2020-2021.

Analysts also expect the level of competition in the segment of energy-efficient and saving coffee machines will continue to be tightened, as leading roasting machine suppliers like Brambati, Scolari, Bühler, Probat and US Roaster Corp, will try to expand their market presence.

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

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“Since we have had so much volatility due to external factors over the last few years, we have been forced as an industry to create tools and to pay much more attention to inventory and logistics.” Don Lawrence, Intelligentsia Coffee

Even when it may seem obvious that supply chain management and logistics are fundamental steps in the coffee value chain – given that without them coffee simply wouldn’t arrive at its final destination – they are some of the least discussed stages of the coffee journey.

The crisis generated by Covid-19 changed the coffee industry as a whole, but more particularly the logistics sector, which has experienced huge issues related to container and vessel availability, lack of warehouse space, and changing priorities on the part of ocean carriers. According to Don Lawrence of Chicago, Illinois-based Intelligentsia Coffee, “before the pandemic, we simply anticipated that coffee would arrive on time.”

Yet the world has changed significantly since the first lockdowns, and these transformations have compelled coffee professionals along the entire supply chain to focus more on digitalisation and logistics in an attempt to navigate the new scenario. However, information on the available digital tools, their functionalities, and their pros and cons is not always readily available in a way that makes sense to many of us. For this reason, Digital Coffee Future (DCF), an interactive platform focused on digitalisation in the coffee industry based in Udine, Italy, launched ‘The Logic of Coffee Logistics’, a series of webinars that sought to explore the intersection between logistics and technology in this industry.

The importance of data organisation

It is a reality that most companies still use Excel sheets to keep track of their logistics. While this tool is excellent for keeping data organised, it is often not powerful enough when companies seek to scale up. Small and medium-sized companies around the world are already taking small steps to move towards solutions that provide them with more flexibility. A good example is Daye Bensa, an Ethiopian coffee exporter that decided to create its own technological solutions based on their needs once the tools they were using turned out to not be enough to allow the company to grow and keep good communication flows between teams. Meanwhile, Colombian-German exporter Col-Spirit looked for options already available on the market instead of developing their own tool. Either option may be far from perfect, but they allow these companies to have their data organised and make better decisions. For Kenean Dukamo of Daye Bensa, it’s all about “really striving to make it as easy as possible for the team to use the software, and to make their lives easy.”

Larger companies go through similar processes. Mercon Coffee Group’s IT and commercial operations director, Felipe Cam, described how they went through a ten-year development process: “Basically, we created a whole culture of process automation and digitalisation among the different Mercon teams. What we did first was to replace all the email-based data, to create the standard logistics style, such as itineraries, the transfer from the warehouse to the port and vice versa.” This was done in phases and included a change in the leadership culture and the integration of information by all actors involved to create an algorithm that could automate the data.

The range of responses to the different situations experienced by companies is diverse. In this sense, creativity and teamwork are variables that must be combined to achieve better results when it comes to data organisation.

The challenges of coffee logistics

The digitalisation of coffee logistics can be a complex process with an ever-evolving set of challenges. One of them is access to digital tools in producing countries, especially for small and medium-sized entrepreneurs and at affordable costs. Obstacles such as language and digital illiteracy must be overcome, but also aspects such as transparency and trust. For Kume Chibsa, founder of AfroValley, technology can add a layer of trust when it includes information verification processes, such as Know Your Customer (KYC) solutions, which her company, a platform that connects farmers and buyers, has successfully used.

Trucks awaiting cargo amid continued congestion and delays at ports. Image: Port of Los Angeles

When it comes to connecting the value chain, from the farm to the warehouse at destination, a single digital solution may not offer all the answers. María Grajales, co-founder and COO of exporter Col-Spirit, explained how they were forced to find multiple tools due to language barriers and legal issues.

In addition, Grajales explained how operations at Col-Spirit are still adjusting to the container crisis generated, among other reasons, by the Covid-19 pandemic. She described how before the first lockdowns “it was easy to know that, normally, from Cartagena to Hamburg it [would] take a specific number of days.” However, the situation since has changed dramatically, and the accuracy of available tools is not always good. This lack of reliability applies to shipping bookings and ETAs, among many other crucial details for exporters, which make planning and forecasting a struggle. “So, actually [it is not easy to find] a platform where you can have all the information integrated at the same time,” said Grajales.

Colleen Walsh of Olam Specialty Coffee agreed, “The logistics sector is still in the process of developing solutions that can impact and integrate the value chain on a daily basis… Even now, what is available isn’t necessarily always accurate.”

Nevertheless, Aleksandrs Sidorecs of Cognizant is optimistic about what he sees in the market, “I am personally following LogTech start-ups and there are already around 900 worldwide, oriented to [developing] affordable models for another market segment that [has not had] access to this kind of solution [before]. [You] can track freight rates, costs, market analysis, cargo monitoring, among others, to give customers solutions based on data and maximise the value they have.” With these type of possibilities, a window opens to overcome the digital divide that still exists in the industry.

Walsh gave an account of their daily challenges as an example of how different actors in the coffee supply chain had been faced with an array of varying challenges during the global Covid-19 pandemic. For her, the struggle lies in finding space for moving coffee. “Coffee is not considered a high value product [by ocean carriers], so they don’t prioritise things for us. The other problem is that coffee moves in 20 feet and it is difficult to get containers with these dimensions to move coffee,” she explained. This shortage of shipping containers stems from the fact that their owners decided to scrap or sell them for other purposes during the early days of the pandemic, as it did not make financial sense to keep them given the slowing down of international trade.

If we try to look for solutions, Sidorecs thinks the situation will possibly be alleviated in 2024, taking into account the technical factors that caused it, “Container availability is very low, and that will persist continuously, including the capacity at the docks, in terms of building new vessels.” Although new vessels are currently being built, they will replace old ones that do not meet the new CO2 emission standards that come into effect in January 2023. This will keep the pressure on logistics professionals – in particular, those who must move coffee and other foodstuffs.

The future of digitalisation requires collaboration

Beyond the need to physically move coffee, the need for a change in the way developers approach digitalisation is pressing. Designing and developing digital solutions has historically been done, for the most part, individually and with little room for system integration. However, to make the most of the digitalisation processes, we need to change the way we approach their development. To Brianna Dickey of CropCone, the issue is clear, “We have multiple different systems in multiple different languages, recording data in multiple different ways, and then we have silos of data. It’s no wonder why it’s really challenging to have a seamless transfer process… We have to start thinking about what data is being recorded and how it’s being recorded, what terminology is being used, [and] how we translate that from one system to another. We have to really start thinking as an industry about different standards that we can set.”

The pandemic greatly impacted logistics, particularly with container and vessel availability. Image: Port of Hamburg

Another issue is the slow adoption of digital alternatives. For example, at the moment, only 5 per cent of the documents required for export and shipping are electronic, so to make this more operational, collaboration between the private and the public sectors is needed. Although very slowly, this cooperation is already happening. Guillermo Grassi of edoxOnline explained how different initiatives are already being promoted, including standardisation of processes and digitalisation of documentation. A game-changing example is the adoption of the electronic bill of lading, which is being advanced by a variety of relevant international organisations, including the International Federation of Freight Forwarders (FIATA). “These initiatives have the ability to transform global trade through the standardisation of [key] processes, and among them, the electronic shipping document. So we believe this will provide massive traction soon,” he said.

The three webinars hosted by Digital Coffee Future addressed the dynamics behind the need for technological tools and how companies should build this path. Although the learning curve of each of the organisations has been different, they have in common the wish to seek digital solutions that improve their operational efficiency and minimise errors. The future is optimistic: digitalisation – if well managed and used extensively and in partnership with others along the supply chain – can alleviate part of the pressure and can contribute to the transformation of how the coffee supply chain is managed.

The recordings of the webinars are available on Digital Coffee Future’s Youtube channel in both English and Spanish.

• Marta Salazar is programme coordinator at Digital Coffee Future, and is also the CEO of Venus en La Tierra. She is based in Colombia.

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Coffee is a fundamental part of Italian culture. There are about 162,000 coffee bars in Italy on average serving 175 cups of simply espresso every day, the Italian Federation of Public Exercises estimated. As many as 97 per cent of Italians drink coffee several times during the day.

An average Italian spends EUR €260 a year on coffee, which includes consumption at home, at the coffee bars, and in the office, according to Coffee Monitor Nomisma. Some researchers even suggest that Italians drink so much coffee because of having a gene that influences the daily need for caffeine. In other words, Italians may have a passion for coffee written in their DNA.

Image: Segefredo Zanetti Italia

This makes Italy the third-largest coffee-consuming country in Europe. The Italian coffee market was valued at USD $3.16 billion in 2020, research conducted by Mordor Intelligence showed.

“Espresso is an icon of Italian consumption habits. Its rituality is codified and is hardly affected by major changes or fashions,” commented Nicolas Peyresblanques, CEO of Segafredo Zanetti Italia.

When it comes to consumption preferences Italian espresso has its own distinctive features, mostly linked to geographical areas, as in southern Italy the most consistent and strongest blends are preferred, whereas in northern Italy the roundness of flavour and the softness of extraction are favoured, Peyresblanques said.

The Italian market has always been considered rather conservative. There are certain rules of coffee consumption: a cappuccino with breakfast, a caffè macchiato – or two – as an afternoon pick-me-up, and espresso after dinner.

Image: Illycaffe

As explained, by Peyresblanques the charm of the traditional moka pot is handed down from generation to generation, so much so that coffee prepared with moka pots still accounts for 70 per cent of the consumption at home.

However, the demand for premium products has been increasing across the board. For example, the turnover in the 100 per cent Arabica coffee segment increased by 8 per cent in 2021 to €224.4 million compared to the previous year, research conducted by Nielsen showed. The single-origin coffee sales soared by 35 per cent to €12 million. Organic and capsule coffee products also enjoy rising demand.

“A new value system embracing all aspects of Italian people’s lives is taking hold making their future technological, green, healthy, and ethical,” Peyresblanques said.

Sting of the Pandemic

Wreaking havoc on the traditional coffee bars and locking people at home for an extended period of time, the Covid-19 pandemic has seemingly made a major shift in consumer preferences.
“The pandemic had a very strong impact on the hospitality sector, as bars and coffee shops were very affected but, at the same time, [retail] sales increased a lot,” commented Giacomo Vannelli, co-owner of Vannelli Coffee.

Vannelli explained that Covid-19 “let people re-discover the beauty to find the right time to make a coffee at home. Drinking a coffee in Italy has always been a fast ritual at the bar counter but finally, we can see that the trend is changing, and some people prefer making a coffee at home, maybe using different extraction methods despite the ‘classic ones’ such as the moka pot or espresso.”

The most recent statistical data shows that nearly 7,000 coffee bars were closed in Italy during the Covid-19 pandemic. The worst affected was Lazio, where the number of bars dropped by 10 per cent or 1,860 units. In Marche and Friuli Venezia Giulia, the number of bars dropped by 6 per cent, while in Tuscany, Veneto, Lombardy, and Trentino Alto Adige by 5 per cent.

The Covid outbreak had a strong impact on the out-of-home segment, leading to losses that have reached 37 per cent compared to last year, the Italian statistical service Istat estimated. The sales are yet to return to the pre-crisis level.

Image: Vannelli Coffee

“In such a challenging scenario, Segafredo Zanetti has tried to support its customers and agents at its best, both financially and emotionally, as we are convinced that the human factor is the engine of relaunching in crisis periods,” Peyresblanques said.

In 2021, the market recorded a slight drop in turnover by 1.5 per cent compared to the previous year. In light of this, the single-serve segment continued its path, already begun in the previous years, settling on higher turnover levels than in 2019, reaching 44 per cent of the market value, Peyresblanques said, citing the Nielsen research.

Rise of Specialty Coffee

The pandemic also pushed some consumers to try specialty coffee, opening a new chapter in the history of this segment in the Italian market.

“Choosing to have some time for themselves, people chose also to get better quality products and so many approached the specialty coffee world,” Vannelli said. “The young generation is, in our opinion, the main driver of the specialty coffee market. Young people are looking for high-quality products, caring about values of sustainability, traceability and human rights.”

“The traditional coffee offer has been increasingly enriched by specialty coffee recipes in bar and restaurant menu cards to satisfy the expectations of those demanding consumers who aim at experiencing a totally fulfilling coffee ritual,” Peyresblanques said.

Alberto Polojac, owner of Bloom Coffee School and the national coordinator of the Specialty Coffee Association (SCA) Italy, commented that while the specialty coffee market in Italy has huge potential, the market as a whole is still yet to recover.

“The positive sign is that big companies and brands are going into the specialty coffee segment. For example, Lavazza has recently launched its own brand in 1865, which is the foundation year of the company, and there is a lot of buzz about the specialty coffee in food magazines, and newspapers”, Polojac said.
“The market is very traditional, and it’s definitely growing,” Polojac commented, adding that SCA Italy spends a lot of effort to improve customer awareness about specialty coffee, including attracting influencers, with a famous Italian model Chiara Ferragni is the most recent example.

Image: Lavazza

“I see a huge potential of this segment in combination with traditional pastry, which is growing here in Italy. We see good examples in France, where pastry shops and the boulangerie are matched with specialty coffee shops. This is not happening yet in Italy, but we anticipate a boom in this segment in the next few years,” Polojac said. On the other hand, the current price fluctuations in the coffee beans market don’t help the coffee consumption, including in the specialty coffee segment, Vannelli said.

“People mustn’t lose purchasing power: we hope for no more restrictions, which could hinder the sale of a primary good, turning it into a luxury good,” Vannelli said, adding that despite everything, the company maintains a positive future perspective where the demand for specialty coffee will grow along with a conscientious and aware consumption.

Era of Blockchain

In the meantime, Italian coffee companies have also started employing new digital technologies both to improve traceability and to offer new payment methods.

For instance, Segafredo decided to launch a single-origin 100 per cent Arabica Rainforest Alliance-certified organic coffee, with an entirely transparent and traceable origin thanks to the blockchain technology that tells the full story behind each cup, enabling consumers to enter the farmers’ world and making them aware of the long journey it took and how much effort and passion it required, always respecting the people, the communities and the countries involved.

In a 2020 IBM survey, 44 per cent of all Europeans said it would be very valuable to have more information on the farmers who grow their food. A staggering 92 per cent of Italian consumers agreed that having food traceable on the blockchain would be valuable.

Segafredo is not the only company turning its sights on the blockchain. Caffè Barbera, which claims to be the oldest coffee roasting company in Italy, recently announced a new partnership with Algorand to use its blockchain for immediate and decentralised payments.

In 2021, Caffè Barbera started accepting payments in cryptocurrencies but limited to Bitcoin, Ethereum, and XRP. The new partnership will expand this list to ALGO, USDT, USDC, BUSD, DAI, BNB, Litecoin, Bitcoin Cash, XLM, and Tezos. In addition, this partnership will also be extended to business-to-consumer payments, using the Bleumi Pay payment aggregator, the company said.

The Organic Segment Looks Promising

The organic segment, which in other product categories has significantly influenced consumption trends and the organisation of on-shelf products, has been only slightly growing in the coffee market, perhaps less than expected, with a limited impact on the category, Peyresblanques said.

Nielsen estimated the organic segment turnover at €9.1 million in turnover in 2021, which corresponds to 0.7 per cent market share in value, and 0.5 per cent market share in volume. However, the demand from the market and the interest from younger consumers suggest that even this trend could have wide margins of growth.

Moka pot. Image: Pexels/Elle Hughes

“This is why our range –already including a wide option of premium blends –was enriched by organic products many of which present the Rainforest Alliance certification, the most accredited in the coffee market at present, synonymous with sustainable agriculture and better opportunities for the farmers, their families, and our planet,” Peyresblanques said.

The green agenda is not only limited to organic coffee. Italian customers are also paying a lot of attention to the package.

“In line with these trends, we are working to offer 100 per cent sustainable products, with recyclable or compostable packs: we have almost abandoned the packaging used on the market until now, consisting of dissimilar materials and therefore not recyclable to allow the disposal of our packaging in their cycling circuits, so to avoid waste creation,” Peyresblanques added.

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

The post Market Report: Italy – Traditions blend with innovations in the Italian coffee market appeared first on Tea & Coffee Trade Journal.

The year 2020 placed the entire world on pause. It was a moment that would forever transform industries, forcing businesses to shift their operations dramatically. It was two years filled with uncertainty, but from that uncertainty rose a strong community focused on innovation, transparency, and agility.

“In the very beginning, the biggest impact was the dramatic shift in terms of consumption points from the consumer standpoint, which was followed by supply chain management issues, particularly in grocery, as the dollar value shifted into the retail segment within a period of months,” said Robert Carter, president, Coffee Association of Canada.

Across the globe, companies shifted their operations to respond to this elevated demand for at-home coffee and tea consumption. Both industries faced several hurdles, including labour and supply shortages. However, companies quickly evolved their operations to respond to this dramatic uptick.

“The pandemic has made the industry look at the systems that we have in place from both resource management and supply chain management,” said Carter. “There is now greater transparency in the entire process from a business-to-business standpoint; it took a lid off the entire industry.” Two years later, several of the changes were retained as both industries acquired a deep understanding of supply chain, logistics and labour.

ProColombia expanded its portfolio to include 3-in-1 products and freshly ground coffee pods. Image: ProColombia

“There were several supply chain challenges, including transportation, logistics and labour,” said Jose Ramirez, chief sales and supply chain officer, NuZee, Plano, Texas. “From a labour perspective, a lot of folks were worried about balancing their work and home life. We needed to adjust, including creating different shifts as a safety precaution and to accommodate our employees who needed to balance childcare and work.”

NuZee, which specialises in single serve and private label coffee co-packing, altered its hiring strategy, actively seeking out operators with multiple skill sets to minimise the company’s labour vulnerability. Although operations are now back to normal, NuZee has retained its hiring strategy and schedules, ensuring that it can quickly respond should a future emergency occur.

Based out of Los Angeles, California, Art of Tea initially focused its business on the hospitality sector. However, with 80 per cent of their business on pause, Art of Tea needed to reduce its work force, cultivating a small but nimble team that was laser focused. “Morale and teamwork went up, and I think that was because our values were aligned, and we were on the same mission,” said Steve Schwartz, master tea blender and founder, Art of Tea.

Today, Schwartz shared that their hiring strategy has evolved from being primarily skill based to value-centric, allowing him to create a team that is a strong cultural fit. “It’s so important to surround yourself with strong players aligned with your values, so that you become a mission-driven organisation,” he said. “The pandemic has taught me that we must continue to move forward and conduct business in a meaningful way, driven by our sense of purpose and values.”

The Benefits of Diversification and Long-Term Forecasting

Three Keys Coffee, Houston, Texas launched in the spring of 2020, causing it to abruptly change its direction from in-person to online. Little did the company know that its unique coffee experience of pairing music with coffee blends would attract the media’s attention, putting it on the map for an intriguing and innovative coffee subscription.Today, more than 60 percent of Three Keys Coffee’s customers are outside of Houston.

“One of the lessons learned from the pandemic was the vulnerability of the supply chain,” said Kenzel Fallen, co-founder, Three Keys Coffee. “These disruptions are forcing us to think much further ahead in terms of planning so that we can make sure that we have enough supply for our customers.” The past two years have taught Three Keys Coffee the importance of good analytics, including understanding its historical sales and costs, to forecast properly. “It’s about gathering enough information and data, to inform decisions and forecasting appropriately so that you aren’t left with a shortage or overage,” said Fallen.

The Art of Tea was forced to reduce its workforce during the pandemic and since then its hiring strategy has evolved from being primarily skill-based to value-centric. Image: Art of Tea

In early 2020, NuZee was heavily dependent on international suppliers, specifically Asia, but with the unpredictable disruptions the company knew that it must expand its supplier network. This included diversifying its suppliers to include American companies, moving from a single asset-based vendor to a broker, and diversifying production operations across NuZee’s two factories. “These actions gave us the flexibility to get our product out a lot faster, while also being proactive in terms of risk management in case there was an outbreak or labour shortage,” said Ramirez.

Nimble Marketing Strategies Discovers New Audiences

The pandemic revealed resiliency in the tea and coffee industries as companies changed their delivery channels to remain active in the market. It was a time of innovation and agility, with manufacturers placing close attention to their markets’ needs and discovering new ways to connect with consumers.

“In 2020, there was a shift to at-home consumption worldwide, increasing sales by more than five per cent and we expect to continue to see that percentage growing year after year,” said Juliana Villegas, vice president of exports, Pro Colombia, Colombia. “Pro Colombia expanded its portfolio to export several new products, including 3-in-1 value-added products and freshly ground coffee pods. And our country showed both resiliency and the capacity to adapt. It definitely wasn’t easy, but the coffee industry persevered, coming out stronger than ever.”

Villegas shared that there was incredible teamwork, between the coffee growers, the National Federation of Colombia, and the government. “We tried to find ways to ensure that the labour force could go into the fields, so that the industry could respond to all of the needs and commitments that were previously made with the buyers.” The result, he said, was that the Colombian coffee industry was strengthened, both on the production side and the export side.

Nostalgia Coffee Roasters. Image: NuZee Inc

Based out of Vernon, New Jersey, Brother Beans Coffee’s primary market was the office sector, however, closures required the company to develop a new strategy. “We had to pivot and focus all our efforts on e-commerce and restaurants, which is what we still do today,” said co-founder, Tyler Correll, noting that his takeaway was that there are so many different avenues and opportunities to make money in the coffee industry. “I’ve learned, through this situation, the importance of keeping my head up and being creative.”

The past two years revealed the importance of maintaining that close connection with the consumer, both in-person and online. This included adapting offerings to respond to the consumer’s tastes and responding to their need for authentic and transparent brands.

“In the United States, Twinings was known mainly for its black teas, English breakfast, Lady Gray, the classic teas you would expect from a British or English tea brand,” said Mike Currie, vice president of marketing, Twinings North America, Clifton, New Jersey. “But, as the pandemic continued, we saw a big shift towards wellness, including improving their mental health, sleep, and immunity.” As a result, Twinings repositioned to become a wellness brand, including a new marketing campaign that showcased products with functional benefits.

Cafe San Alberto (left and right) expanded its offerings to include virtual coffee courses and at-home coffee experiences during the pandemic. Image: Cafe San Alberto

Image: Cafe San Alberto

The new functional line was launched in the summer of 2021 followed by a wellness campaign in the fall. “Being nimble and being able to pivot when necessary are both incredibly important; it’s about looking at what we learned and going beyond what’s happening now to the next set of trends,” said Currie.“This includes always trying to have your finger on the pulse of the consumer, including finding ways that you can play a role in their lives.”

In 2020, Café San Alberto, Bogotá, Colombia, was in the process of opening a new café (coffee temple) in downtown Bogotá, and in the beginning stages of e-commerce, including making its products available through Amazon. However, with the increased interest in delivery and home consumption, Café San Alberto expanded its offerings to include coffee courses and an at-home coffee experience. “We essentially created a new business centred around the at-home coffee experience,” said third generation owner, Juan Pablo Villota. “Initially, the experiences were primarily purchased by companies looking for bonding activities they could offer their employees at home, but it has now broadened to the wider consumer base.”

The pandemic required companies to be both innovative and agile. Mansa Tea, based in Brooklyn, New York, is one example of the entrepreneurial spirit that resulted in the founder moving away from the hospitality sector to deliver a unique virtual experience. “We were out doing a tea pairing workshop on location with one of our hotel partners, and I remember thinking that this would be the last one for a while,” said Ashley Lim, tea sommelier and founder of Mansa Tea. So, she started to look at virtual methods and how Mansa could connect with the tea community to deliver both products and experiences.

Mansa Tea turned its in-person tea-pairing workshop into a virtual experience during the pandemic. Image: Mansa Tea

“In the beginning, there was a lot of experimentation,” said Lim. “There were a lot of gaps in the virtual experience, the biggest being that you cannot fully control how the tea is brewed. We tweaked the experience over time, including implementing strategies on how to capture one hundred people’s attention through a virtual platform.”

Overall, the pandemic not only revealed resiliency but strengthened the tea and coffee communities. Although the industries were largely supportive of each other, the past two years have strengthened these connections.

“From a Canadian perspective, there has been an increased sense of community; when this all happened the industry really came together to support each other,” said Carter.“We continue to see the social aspect of business rise, with a strong focus on the human aspect, including diversity, inclusion, and mental health.”

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

The post Lessons from the pandemic appeared first on Tea & Coffee Trade Journal.

“When we started Waka, more than three years ago, we tried to bring the instant revolution to the United States,” said founder and CEO of Waka Coffee, David Kovaleski, explaining that the company’s ambitions are to change consumers’ perception of instant coffee and tea. In the US, where Kovaleski noted that “instant coffee is perceived as your grandma’s coffee,” Waka has already seen growth in the instant market, with its own sales increasing four to five-fold since before the pandemic.

Kovaleski said its winning secret has been to augment the US coffee market rather than to upheave it, “We are never saying to our customers: ditch your coffee maker, ditch your ritual, we say complement it.” He insisted that customers can still enjoy their rituals of grinding their coffee beans, steeping their tea, but Waka comes into its own for on-the-go beverages or times in the day when the ritual isn’t quite so significant. “A lot of companies tell you: we are better, choose only us. We’re saying we are better than any other instant coffee out there and we are better coffee for preparation, for ease of use but it doesn’t necessarily mean that you need only instant coffee always.”

Distinguishing its instant

The quality of Waka’s instant coffee is something Kovaleski believes sets it apart in the market, by freeze-drying its 100 per cent Arabica bean coffee. “Most traditional instant coffee, especially in the US, use Robusta beans and spray-dry their coffee, that’s why you have this bitter aftertaste. Our instant coffee is made from a higher end coffee bean and is processed in a more delicate way, so it preserves more of the aroma and flavours of the beans,” he said.

Waka’s instant tea is also made from 100 per cent real tea leaves which are brewed into a super concentrated liquid with cold water rather than hot to preserve the flavours and aromas. It is then spray-dried to evaporate the thick liquid into a concentrated powder which dissolves straight back into regular tea when water is added.

David Kovalevski, founder and CEO of Waka Coffee & Tea. Image: Waka Coffee & Tea

Beginning only with instant coffee, Waka introduced a single SKU of instant tea as an ‘add-on product’, which grew organically into its own category. The pandemic played a large role in this growth, for both instant tea and coffee. Social media trends such as whipped Dalgona coffee, health shakes and recipes requiring instant tea dramatically lifted Waka from a start-up business, to having its inventory sold out in a week. “A lot of people in the US were looking for ease and convenience when the pandemic hit. They were now working from home more and were caught off guard without coffee makers,” Kovaleski commented, adding, “When you want to have a coffee break when you work from home, it’s a much easier product.” He noted that the US instant coffee market grew by 30 per cent during the [initial] Covid-19 lockdown.

The pandemic was a driving force of this interesting shift in coffee habits with both US and UK consumers. As Kovaleski revealed, instant coffee was unpopular in the US before the pandemic, but the newfound necessity of it during the lockdowns and homeworking allowed many mindsets to be changed. However, the market in the United Kingdom is very different. Instant coffee was mainstream before the pandemic, but then people missed their coffee shop visits and replicated that routine in their own homes by investing in their own coffee machines and making the switch away from instant coffee.

Navigating new markets

Walnut, California-based Waka’s products are available in the US online and in retail stores. It ships its products internationally via iHerb to 165 countries, including the UK. Navigating the contrasting UK and US markets is a challenge Waka is looking forward to confronting head on as the business grows.

“In the US we are pretty much starting afresh, and we need to convince consumers that our product isn’t your old school instant coffee,” shared Kovaleski. “So, in that regard it’s harder because we still need to do the education, but it’s also easier because for them we are new products. However, in the UK it’s easier on the one hand because instant coffee is already well perceived, but on the other, it’s harder because people already know what instant coffee is so they’re judging us a bit more.”

Waka’s instant coffee comes in a variety of formats. Image: Waka Coffee & Tea

The cultural disparity between UK and US consumers is of course also present in the tea market. For Brits, tea is hugely cultural and ritualistic, and the prospect of instant tea is almost sacrilegious. The process of putting on a kettle of water to boil, brewing the tea and memorising everyone’s specific milk and sugar requirements is not something that would be given up easily by Brits. However, Kovaleski feels that there is a lot Waka can bring to the table. “There are two things, first is useability, and second is actual functionality.”

He said that instant tea’s useability exceeds that of tea because it can be brewed cold as well as hot, a huge benefit for those wanting to make iced tea. It is also significantly more concentrated so a much smaller quantity is needed—only a quarter of a teaspoon per serving, with each bag containing 200 servings, and retailing at USD $14.99 per bag, makes it highly economical, and cheaper than a tea bag. It also has a longer shelf life than tea bags, which sit at between six and twelve months, compared to Waka tea at about three years in its resealable bags.

In terms of functionality, Kovaleski said that Waka’s tea is much more eco-friendly. “You don’t have tea bags; you don’t have waste.” Many other tea companies will use bleached tea bags, many of which also contain plastic that poses the risk of microplastic contamination to both the body and the environment.

Waka’s instant tea experienced strong
sales growth during the pandemic. Image: Waka Coffee & Tea

Waka perpetuates its sustainability principles throughout the rest of its company practices too. Kovaleski explained that in terms of sourcing, it works only with coffee and tea suppliers that it knows are adhering to its sustainability values. Its packaging is all recyclable and made from recycled content and any paper that is used is certified by the Safe Forestry Initiative. Waka ensures its packaging is as compact and light as possible to limit its carbon footprint and it donates to support clean water initiatives in 26 countries, as well as managing its own Add Water, Give Water programme which is donated to on a rolling basis.

Yet there is always more to be done. “Our goal, as technology evolves and more packaging solutions become available, is to offer our customers even more eco-friendly solutions. We are all about less mess, less waste in how you make your coffee and tea, so we also want to make sure that this is how we deliver our products as well,” said Kovaleski.

Planning Ahead

As a relatively new company still, Waka is of course looking to the future, not just with its sustainability but with its future business plans. At the end of 2021, it received a $725k investment infusion, which it has already begun to use, and there are plans to utilise it further, alongside raising additional funds.

“We are going to double our SKUs of instant coffee, and we are going to launch light and dark roast coffee from Ethiopia and medium roast from Papua New Guinea in instant coffee,” shared Kovaleski.“We are rebranding, and we have launched new SKUs, new packaging types, and are going to change all of our websites; they’re going to look even more approachable and allow us to put our name out there in a more professional way.”

Reiterating the company’s desire to change the perception and demographic of instant coffee consumers, Kovaleski said Waka’s new packaging and website will look to encourage this evolution by being more colourful and designed. “All of our branding is much more approachable, young, inviting nothing like your old school instant coffee.”

Waka began rolling out a new line of instant flavoured teas in April starting with a peach-flavoured and a lemon-flavoured green tea. Image: Waka Coffee & Tea

Waka also began launching a new line of flavoured teas at the end of April, beginning with a peach-flavoured instant green tea, which will shortly be followed by a lemon variety. “All our flavourings are made from natural ingredients with no added sugar and are non-sweetened; there’s nothing like that in the market,” said Kovaleski noting that most people are accustomed to instant tea from the current two or three players in the industry, “which all have a bunch of sugar, additives and preservatives so ours is just natural flavours mixed with natural tea.” He also revealed that flavoured coffee is in the works.

Waka invests a lot in Intellectual Property trademarks that relate to its proprietary instant process as well as R&D. With the US retail market share of instant coffee at $760 million per annum, and instant tea at $260 million (per IRI Total US Multi Outlet report for the 52 weeks ending 28 November 2021), the instant industry continues to grow with Waka firmly in its saddle.

• Kathryn Brand joined Bell Publishing as an editorial assistant at the beginning of 2022 after graduating from the University of East Anglia with a degree in English Literature and Creative Writing. She may be reached at: kathryn@bellpublishing.com.

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As cliché as it is, humans are creatures of habit, and when our habits were so dramatically altered by the Covid-19 outbreak, we reached for the things we knew, the things we could control, to emulate a semblance of stability. There is a reason we re-watch our favourite films or TV shows, re-read books over and over: we are comforted by the familiarity and the predictability.

As soon as cafés were allowed to offer takeaway coffee, a glimmer of normality returned, and we flocked to their doors in an attempt to capture that mimicry of routine once more. We all remember looking forward to the one trip outside that we were allowed each day. And for so many, this took the form of a walk to grab a coffee to-go from their local café or coffee shop. Not only did it hail back to normal times, but it was a chance for human interaction – seeing ‘real people’ aside from your dog or your long-suffering partner.

At the Specialty Coffee Association’s (SCA) Virtual Coffee Retail Summit in February, Jessica Warden, head of coffee at Gail’s, spoke of the newly essential role their baristas had to play during this time, that the exchange between customer and barista became even more important. For many, it may have been their only social interaction of the day and for most, it served as a chance to get out of the house and recalibrate with the outside world. Coffee, and more importantly, coffee shops, throughout the pandemic, remained an integral part of people’s lives, just in a rather different format.

It was during this time that Pret a Manger launched its subscription service: up to five barista-made beverages a day for £25 a month. This proved a popular scheme, encouraging its customers to make the effort to visit, if only to get the most out of their subscription. One of my closest friends and her housemates would walk to Pret daily – even though it was a forty-minute walk from their house – to feel like they had achieved something with their day, gone somewhere and done something at a time when this was a luxury.

Pret also opened to sit in before a lot of other places, socially distanced and one household to a table of course, where you could go and work or study. The return of indoor dining offered different walls to stare at, and a constant volley of people, which, despite not really being able to interact with, at least they were people and a reminder that life continued.

Instant coffee, was, and still is, widely consumed in the United Kingdom, but specialty coffee is on the uptake and has been for some time. Previously, most people were satisfied with their instant coffee at home and would enjoy a barista style coffee on their way to work or from their fancy office coffee machine, if they were lucky. But during lockdown, when a trip to the coffee shop became the focal point of the day, and time felt so endless that people picked up hobbies like sourdough cultivation and crocheting, the coffee-minded among us delved into the world of specialty coffee at home. They invested in coffee machines and experimented with more unusual and premium blends, no longer satisfied with anything but the high-quality coffee that was the spoils of their lockdown coffee-shop pilgrimages. This was expediated by social media such as the Dalgona coffee TikTok trend that saw people whipping instant coffee, sugar, and water together and adding it to hot or cold milk to create a cloud-like coffee concoction. People were using social media to learn how to do many things – like learning to knit a cardigan – and many were also using it to learn how to make specialty coffee.

Now that society has mostly re-opened, our evolved preference for specialty coffee has lingered and whilst many can achieve this at home, coffee shops have not lost their unshakeable attraction as a segment of our routine and a respite from what was a too empty life in lockdown, to a once more, busy life doing whatever it was we used to do in 2019.

• Kathryn Brand, Bell Publishing editorial assistant
  Keep in touch via email: kathryn@bellpublishing.com 
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The arrival of Covid-19 in the West by early 2020 not only heavily impacted the supply chain for food from other continents but has also brought about significant changes in lifestyles. Looking at the hot brewed cups and in particular the teas and herbals, which many consider as necessary to ensure a smooth daily routine, one can see an overall move towards demand for additional benefits and attractive novelties.

Many consumers are exhausted, frustrated, tired, and overwhelmed by the current pandemic, which has created a completely new societal scenario, depriving them of their usual everyday life and imposing important changes and stringent and mostly unpleasant constraints. The imperative recommendations issued by governmental authorities focus on keeping their populations safe. This has created isolation, huge stress and anxiety. One way people are seeking relief is by turning to food and drink, both through indulging and through purchasing products with new benefits and remedies and cups that are brewed with more exotic products.

The new Lipton Feel Good collection offers a range of blended teas and herbal infusions.

During the months of lockdown, getting appropriate retail supply was not always possible. In the meantime, more online purchasing has become available, which fosters the introduction of new cups as well as the promotion of more traditional ones that remain fully attractive. They all claim to be good for your body and mind and soothing for mood and soul. They promise to boost your energy, to sooth and refresh, to relax and to balance, and to enchant your palate with new taste notes, from new plants and new recipes, etc. The focus is on a multi- facetted response to the intense consumer craving for the best possible ways out of the continued pressure and squeeze created by the pandemic’s restrictions, constraints and closed doors.

Boost, sooth and relax 

There is a wide range of traditional botanicals that offer such benefits, sometimes marketed blended with teas, sometimes as pure herbal infusions. The sales messages fully take the ongoing pandemic into account, responding to the current stressful and hectic ways of life, recalling and prominently underlining their powerful benefits that some consumers may have forgotten or not yet been made aware of. The ‘big’ brands have addressed this need by responding to the urge for ‘feeling better’ and ‘helping to cope’. In this range one finds many Western plants such as mint, verbena, chamomile, thyme, linden, lavender, black current and rosehip, among many more. There is also the caffeine-containing mate from South America, the soothing caffeine-free rooibos from South Africa together with spicy ginger, curcuma and lemongrass from South-East Asia.

The Lipton Feel Good selection is building on this consumer need with an attractively labelled range of 25 colourful blended teas and herbal infusions. The Tetley range of functional teas and their range of super teas also ties in with the continued trend for health and wellness. Both product lines assist the consumer with handling stress and coping with the many challenging complications the pandemic has created.

Purple tea from Kenya

The taste profiles range from floral to spicy and whilst on the market for decades, these cups have become more widely attractive as catering to the increased stress of the pandemic ridden consumers, who are now more inclined to discover these beneficial cups.

Seeking added benefits & new tastes

Whilst one expects the presence of familiar flavours to appeal to those consumers who prefer traditional and mainstream teas, other consumer segments are keen to seek attractive new, and premium cups, which offer bold colours and specific intense flavours, with trends towards spicier, more bitter sweet, more intensely earthy, and more single flavour than blends.

The 2022 forecasts from beverage industry market experts quote the exotic botanicals hibiscus and moringa, together with new teas such as purple tea and premium puer teas, which rank high, as well as the various matcha cups that continue to be a top favourite:

• Hibiscus flowers — brew cups with bittersweet taste notes and a deep purple red colour. Supply is widely available as hibiscus is cultivated in many African countries such as Egypt, Sudan and Senegal as well as in India, and other South-East Asian countries also export. Traditionally reported to have diuretic and anti-inflammatory effects, recent Western studies demonstrate a blood pressure-reducing benefit, which is a traditional claim well acknowledged by the producing countries’ domestic consumers.
• Moringa leaf powder — is stirred into deep green cups, with a vegetable taste and a pleasant mouthfeel. Harvested from beautifully shaped, fast-growing and high leaf-yield offering tropical trees, the big leaves are dried and powdered for export mainly. In India, the main producer, but also in Africa, domestic consumers harvest the leaf like a garden vegetable and consume the flowers, the seeds and the bark. Reputed for its high nutritious value, high vitamin and oligo element content, with reported anti-aging, anti-inflammatory and antioxidant properties, the tree is locally venerated as miracle tree and called tree of life.
• Purple tea — brews delicate lilac-coloured cups with smoky and slightly astringent taste notes, inviting the sipper to relax and indulge in the scent. This colourful and attractive cultivar, named TRFK 306 (for Tea Research Foundation of Kenya) is the result of a joint research project, run by the Tea Research teams of Kericho, Kenya and Tocklai, Assam, India. Released in 2012 after more than 20 years of selective crossbreeding of two Camellia sinensis varieties, the var. Irrawadiensis and the var. Assamica, expectations were high when launching this new cup. It has taken some time to gear up commercial cultivation and to promote this new cup, brewed with delicate deep purple-coloured slender long leaves. Created with the remit to offer increased AOX capacity through a high content in anthocyanins, these premium cups from Kenya’s Nandi Hills are now becoming more widely available.
• Puer & dark teas from China — puer teas from Yunnan and other dark teas from Hunan, Hubei, Guangxi and Sichuan, with their manifold preparations and processing, either raw and coming as young or as aged, ripened industrially or naturally in a vintage cellar, either compressed or whole leaf, either cakes or bricks, have been gradually introduced to the West since the early 2000s. Puzzling and fascinating the consumers, their reputation as an intensely healthy cup, with a wide range of benefits being reported in the domestic market has not yet been fully acknowledged in the West. Intrigued and attracted by highly exotic terroir and origin stories, the health benefits and soothing as well as stimulating properties of these many premium cups fit well with the new requirements in the pandemic- stricken markets. The potential for consumption increase seems huge, despite prices on the rise, which will become more acceptable with appropriate and in-depth product information.
• Matcha and other powdered teas — have become highly successful in North America, skillfully promoted by Japan’s leading supplier and manufacturer Ito En. Although the most premium of these colourful and tasty cups require special accessories and skills for the whisking up of a frothy creamy delight, there are now also more convenient preparations as well as ready-to-drink products available. The feel-good effects are impressive, as the powdered leaf brings more plant material to the body than the brewed cups. The matcha craze remains ongoing; new product formulations in line with improved manufacturing technology cater to greater consumer awareness and more sophisticated consumption habits. Europe is catching up and demand continues to grow, with new factories springing up in the origin countries.

Powdered green tea from Korea and hojicha from Japan.

There is clearly a wide range of available options for introducing new enhancing cups, be they new from the scratch, such as the Kenya purple tea, or newly arrived in the West such as moringa leaf powder and many of the Chinese dark teas, or newly arranged, blended, reformulated, renamed and appraised in more depth. The outlook seems favourable for bringing many more colourful and tasty cups, which help consumers mind and body feel better in these very stressful times.

• Barbara Dufrêne is the former Secretary General of the European Tea Committee and editor of La Nouvelle du Thé. She may be reached at: b-dufrêne@orange.fr.

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The coffee market in the Nordic region, which is comprised of Sweden, Finland, Iceland, Norway, and Denmark, is steadily growing due to the traditional love local customers have for coffee. And as Covid restrictions in the region are easing, representatives of some leading local producers and independent analysts report that out-of-home consumption is growing again.

While the pandemic and its consequences have not resulted in a significant drop of coffee consumption in the Nordic region – of which each country is among the top-10 coffee-consuming nations in the world – it led to the change of structure of demand.

Such a trend, for example, is currently observed in Denmark, which is confirmed by some leading market research firm analysts.

“No negative effects have been noted, but a shift in demand has occurred. We’ve seen office spaces close, sending many home to work. This meant a decline in demand from B2B customers and an increase in B2C demand. The consumption was moved home from work,” said Christian Juul Andersen, chairperson of SCA Denmark, the Danish Coffee Association, in an exclusive interview. “Specialty coffee is becoming more sought after, as customers are becoming increasingly aware of all links in the supply chain are being treated fair, as well as a general heightened focus on higher quality. We at the SCA expect a shift from a high intake of inferior coffee to a higher quality coffee and a small decrease in consumption.”

In the meantime, in neighbouring Norway, the Covid outbreak has even led to growth of coffee consumption among local customers. Bjørn Grydeland, an official spokesperson of the Norwegian Coffee Association, said, “We have had a total growth in coffee consumption. The decline in the professional market (out-of-home) because of the pandemic has been more than compensated by the growth in the home market.”

According to Grydeland, coffee habits of Norwegians, however, do not change that quickly. “I cannot point to a particular segment that stands out. All kinds of coffee for the home market increased, both instant, capsules and roasted fresh coffee,” he explained. “When society returns to normal conditions, I think we will also return to the way we consumed coffee before March 2020. It is difficult to say whether this exceptional year will lead to lasting changes. Black filter coffee has for decades been our favourite. There is one trend that seems to last; sale of whole beans has been increasing continuously for several years. That will probably continue.”

The Finnish love their coffee

Representatives for roasters also confirm maintaining stable demand for coffee in the region, which creates conditions for their further development. Lenita Ingelin, senior vice-president of Paulig Business Area Finland & Baltics, said 2020 was an extraordinary year – especially in the HoReCa channel – due to the Covid-19 pandemic.

In Finland and the Baltics, the total coffee sales were slightly below the previous year. “However, during 2020 people were experimenting with new coffee tastes that had a positive effect on the sales of our premium coffee segment,” said Ingelin. “In Finland, our City [Coffee] product range, where each blend of coffee represents the coffee culture of a certain city, saw the most significant increase in sales — not being able to travel meant that customers bought 68 per cent more coffee in terms of the various ‘City’ blends than in 2019.”

Paulig Juhla Mokka, a light-roasted coffee, has been popular in Finland since it was introduced in 1929.

Paulig is especially optimistic for its traditional Juhla Mokka coffee — the light roasted ground coffee, launched in Finland for the first time in 1929, and its popularity and consumption have significantly increased since that time. According to Ingelin, today, almost every other cup of coffee enjoyed in the country is Juhla Mokka coffee.

She added that also last year, the iconic Presidentti coffee celebrated the 70^th anniversary of the coffee ambassador, a tradition of Paulig in which the company selects special ambassadors annually to promote the brand. This tradition dates back to the 1920s.

Furthermore, a new variety for the City Coffee range, Café Reykjavik, was introduced in Finland and Estonia, and Classic Cremoso in the Baltics. “In 2020, we also opened a Paulig Café & Store (a Paulig flagship coffeehouse) in Moscow, Russia. It´s a unique place for coffee lovers, inspired by the Finnish Paulig Kulma, which opened in in the heart of Helsinki five years ago,” said Ingelin. “At the moment, we don’t have any expansion plans in our coffee category. We’ll focus on our current markets and nurture the coffee culture in the Baltics, Finland and other Nordic states.”

Paulig Presidentti coffee brand celebrated the 70th anniversary of its ‘coffee ambassador’ in 2020.

Ingelin confirmed that Finland is an important market for Paulig as its coffee culture is one-of-a-kind, and the Finnish people consume the most coffee in the world per capita. She noted that Finnish coffee consumption is almost 10 kg per person yearly and the figure has been stable for years. In 2020, the consumption declined slightly due to exceptional times. The drop in consumption in the HoReCa channels did not shift fully to the retail channel.

Market analysts confirmed these statements. Sneha Varghese, senior research consultant at Fact MR shared that as with many countries, Covid-19 has had a negative impact on the coffee industry of the Nordic region. “As an immediate response to Covid, various government bodies of the region have introduced country-wide risk management services such as social distancing, travel restrictions, and partially lockdown in various countries. This has significantly impacted the countries’ economies and their coffee industry.”

According to Varghese, there was a disruption in various activities such as labour supply, trade operations, logistics networks as well as import-export infrastructure, which has resulted in shipment delay and transaction costs in the coffee industry of the Nordic region. “Thus, the price of coffee has been highly volatile due to disruptions in the supply chain and the production of coffee. This also affects small-scale coffee roasters that primarily supply hotels, restaurants, and cafés. Moreover, Finland, Sweden, and Norway are predicted to remain the most lucrative markets by the end of 202.

Echoing Ingelin’s comment, Varghese said that based on per-capita consumption of coffee, Finland is the biggest consumer across the globe. “The per capita consumption of coffee in Finland is around 12 kilograms. On the other side, per capita consumption of coffee Norway and Iceland is 9.9 kilograms and nine kilograms, respectively. In addition, the consumption of coffee at home has been increased as people restricted to work from home and has limited options to go outside, consume coffee is one of the few ways for them to take a break from work.”

According to a study of the Centre for the Promotion of Imports from developing countries (CBI), which is affiliated with the Netherlands Ministry of Foreign Affairs, imports traditionally account a small share of the Nordic coffee market (especially compared to other European countries), considering that most coffee is packed and produced at local processing factories.

In Denmark, Sweden and Norway coffee is predominantly consumed black, meaning without milk and sugar, so the quality of the actual coffee is especially important in these markets.

CBI analysts point out that coffee in Scandinavia is generally considered to be of high quality, which despite the pandemic, creates conditions for the development coffee chains and micro-roasteries, with the biggest number being observed in Sweden and Denmark.

Paulig achieved Carbon Neutral certification for its roastery in Vuosaari, Finland and aims to make all its production sites carbon neutral by the end of 2023.

In recent years, local coffee roasters and global majors operating in the region have started to pay greater attention to the issues of sustainability. For example, according to Ingelin, Paulig achieved CarbonNeutral® building certification for its Vuosaari coffee roastery. “Our ambition is to reduce the greenhouse gas emissions from our own operations by 80 percent by 2030, and the plan is to make all of our production sites carbon neutral by the end of 2023. Paulig has been a pioneer in the coffee industry’s sustainability work. As one of the few large roasteries in the world, the company uses coffee beans from only verified sustainable sources.”

Specialty tea on the rise

In addition to coffee, the demand for tea in the Nordic region remains also strong, with the biggest being observed in case of specialty teas.

Alexis Kaae, an official spokesperson of Simply Tea ApS, one of the largest tea importers in the Nordic region, based in Denmark, in an exclusive interview commented: There is a huge interest regarding specialty tea in Denmark and some other Nordic states and a decline in supermarket commodity tea. Since the outbreak of Covid19, we are experiencing more and more restaurants and fermented tea companies looking for sustainable specialty tea. The demand for a healthy beverage seems to be on everyone’s agenda.”

She said that quality is always an issue as most Scandinavians know very little about tea or its production. “In order to meet the demand for education we have now planted five acres of Camellia sinensis plants in our own tea garden in Denmark. I suppose this can be defined as our major achievement for this year.

As the demand for tea in the Nordic region remains strong, some leading Western European tea manufacturers and marketers are considering accelerating their expansion into this market. Mike Harney, vice president of New York-based Harney and Sons, said, “We as a family-run company do well in the Norway region and have started distribution in Sweden. In terms of expansion in the next year, we are hoping 2022 takes our company to a whole new level amongst consumers in the Nordic region.”

• 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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The entry requirements for all 2021 Specialty Coffee Expo exhibitors and attendees are as follows:

1. Advanced Registration Only: All visitors must register online in advance. Ticket holders will collect their Expo badges on-site at the venue. Please note that both the venue and Expo 2021 will be cash-free and will accept only electronic payments.
2. Negative Tests Required: Per the City of New Orleans latest Covid-19 guidelines, all attendees—including those who are fully vaccinated—must present a negative PCR Covid-19 test valid within 72 hours of badge pick up to enter the venue. See the City of New Orleans Covid-19 website to find a list of approved testing sites: ready.nola.gov/incident/coronavirus/testing.
3. Masks Required: Per the City of New Orleans latest Covid-19 guidelines, masks are required inside the Expo venue at all times. Attendees may remove  masks when drinking or eating, but please be sure to keep it on before and after consumption.

The SCA has also listed additional Covid-19 precautions it is taking in collaboration with its partners at the Ernest N. Morial Convention Center:

• Ventilation at the Venue: The Ernest N. Morial Convention Center’s ventilation system uses hospital-grade air filtration systems to help prevent the airborne transmission of Covid-19.
• Enhanced Cleaning and Hygiene: The Ernest N. Morial Convention Center is accredited as a GBAC STAR Facility through the Global BioRisk Advisory Council, which means that the venue has established a cleaning, disinfection, and infectious disease prevention program to minimise risks associated with infectious agents like Covid-19. Read the Convention Center’s health and safety protocols or visit our website for more details.
• Physical Distancing Guidelines: In addition to mandating advanced registration, the SCA has reduced capacity in halls and meeting rooms, and has designated entrances, exits, and one-way aisles. For the first time this year, Exhibitors will have an additional installation day on Wednesday 29 September to reduce congestion in the exhibit halls on Thursday and Friday morning.
• Sampling Regulations: Exhibitors conducting sampling in their booths must have a handwashing kit, face masks, gloves, and utensils when handling samples.

Specialty Coffee Expo visitors should familiarise themselves of the latest city of New Orleans Covid-19 guidelines by visiting: ready.nola.gov/incident/coronavirus/safe-reopening.

Visit the Covid-19 page on the Expo website to find more information on SCA Covid-19 Entry Requirements, its updated Safety Protocols, and for answers to frequently asked questions related to Expo and the US Coffee Championships: coffeeexpo.org/covid19-safety.

To read Yannis Apostolopoulos’ full statement, visit: coffeeexpo.org/discover-expo/coffee-expo-2021-entry-requirements.

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It was actually a great year for tea [in North America and Europe] with consumption rising and in home/at home (grocery) sales going “through the roof” as there is an emotional connection to tea, said Weber, so consumers turned to tea for comfort and relaxation, and to feel good [health benefits/immunity boosting].

“Innovation is the prevailing theme that needs to come out of last year,” said Weber. “Businesses need to be innovating because the habits and lifestyle changes made within the last twelve months will not change.” For example, many consumers who were ‘afraid to shop online’ are now shopping online and will not stop. Thus, companies that were not online before Covid got online quickly; those that were, strengthened their operations.

“A key motto that I heard for a lot of companies was ‘progress over perfection,’ Weber shared. “Businesses were forced to make decisions at twice the pace with half the information.” With consumers wanting convenience, [smart] companies responded with fast delivery. Other companies offered at-home experiential packages, and many tea companies held virtual tea tastings for consumers, which Weber, noted, was not done before Covid.

According to Weber, many innovation trends that began in 2020 during Covid, will likely continue in 2021 as well as beyond, such as:

• Self & societal care — nutritional support (immunity, mental health, sleep) and taking care of the “outside” (skin health).
• Indulgence — premiumisation, customisation, smaller portion indulgences, permissible indulgences (those that work with diets).
• Convenience — online shopping and home delivery, creating in-home experience (not going to go away even with places re-opening).

There is much that can be ascertained from last twelve months if we stop and pay attention to them, Weber explained, and advised attendees to “not write off 2020. We cannot forget about it as there are lots of lessons to be learned that can help this industry to grow.”

Summit organiser Questex confirmed that it is proceeding with World Tea Conference & Expo, scheduled for 14-16 July in Denver, Colorado as a live/in person event.

• 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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As Covid-19 began to take hold of the United Kingdom in March 2020, Costa Coffee and Starbucks were high profile examples of this as they immediately cut refilling reusable cups as part of their offering in line with the government guidance, instead, switching back to filling single-use products. Transport services in the country, such as Great Western Railway and LNER, also followed suit and made the early decision to ban reusable cups on trains.

What is clear is that this pandemic is not going anyway any time soon. In fact, the talk has shifted as to whether we’re going to be required to live with this virus – with or without a vaccine. So, will the hospitality sector ever be in a position to safely factor in reusable products, or has the time come to begin discussing a new future-proof alternative?

At least 2.5 billion coffee cups are thrown away each year in the UK, according to a government report published in 2018. Less than 1% of this gets recycled. Why?

The hospitality and foodservice industries have taken giant strides over the last decade to manufacture and produce products that are 100% recyclable. Coffee cups, ironically, being a prime example of that.

This global pandemic has exasperated that over the past year – especially with reusable products being removed as an offering – but should that recycling trend continue, there’s no doubt we’re going to face a huge environmental problem.

When we emerged from lockdown and returned to a degree of normality in 2020, we saw cafés and restaurants reopening. However, a huge downside of that was the images we saw across the UK of the huge increase in pollution in our natural beauty spots. This includes things like disposable coffee cups, food packaging, containers, and plastic water bottles — all items which are repeatedly on the worst offenders list when it comes to what is causing plastic pollution across UK beaches and rivers.

If we are to return to single use, it’s clear that far more education is required. Data shows that disposable packaging has been on the rise over the last year and that has only heightened the need for more education to ensure the customer who is holding the disposable coffee cup knows what to do with it when it is empty.

There is a similar issue with the term “compostable” as well. There is a general perception that if something is compostable, it will disappear over time. It doesn’t work like that. Yes, it will compost, but only in the right environment, rather than just being chucked into a bin bag. We need to work with everybody to spread the word for what products are capable of what when it comes to the environment. The industry is well prepared and continues to prepare some very good products when it comes to recycling.

If we had this conversation towards the end of 2019, we would have been talking about the importance of reusable products, like crockery and cutlery, but if you look at the marketplace now, everyone wants to be hygienic. They want single-use recyclable products that they can eat and drink from successfully and then be provided with the right place for it to be placed for recycling.

Maybe the answer lies somewhere in the middle between reusable and single use. Aesthetics are a huge difference between the two, with single use being designed to serve a purpose before it is thrown into the recycling bin, while effort goes into the design of a reusable product to increase its appeal. However, what if that was transferred over to single-use products and consumers were provided with an incentive to use that single-use plastic for something else entirely? Hacks for repurposing waste pop up on the website and social media all the time, but as for the hospitality and catering sector, it is an intriguing possibility whether this is something that can be actively considered in the future as part of our packaging.

Reusable absence is just temporary

What has been clear over the last year is that reusable products have not been totally abandoned and, in fact, there has been a willingness to find ways of reintegrating them.

Just as Costa and Starbucks took their reusable products off the menu, we also saw them attempt to bring them back before they were withdrawn again as Covid cases began to spike across the UK. McDonald’s also announced in September that it would be testing a new system of reusable, returnable coffee cups at some point this year.

Beyond what the news is saying, here are some further thoughts that have been contributed by three industry leaders:

Mike Strange, director of corporate catering company, City Pantry, said, “We’ve seen the hunger for reusable products amongst consumers and I’m confident that this will return as soon as permitted. Of course, some packaging isn’t appropriate to be reusable and innovation in compostable packaging is essential.”

Mark Hilton, head of sustainable business at Eunomia and co-author of City to Sea’s Food-to-go report, said, “There is a strong and building pressure to increase the use of reusables — the pandemic has only created a blip. Ireland and France have stopped the use of single-use cups for eating in for example, and refills in general are now strongly on the cards at the EU level.”

He noted that there is little evidence that disposables are safer and government advice is generally that reusables can be used. “In fact, logic suggests that reusables can be safer than single-use. For a disposable cup, store staff take the cup out of the packaging, touching it (often without gloves), hold it while pouring the coffee then have their fingers on the lid (to press it down), which people then drink out of! The user then puts that in a bin, which other people will touch.”

Dinesh Patel, a former MasterChef finalist, said, “Based on the current pandemic I don’t think it would be safe for us [anytime soon] to be returning to coffee shops with our reusable cups in hand. But moving forward, I do feel it’s important that food and catering industry companies need to focus and make smart choices on recyclable, biodegradable, and compostable packaging and products.” He shared that, in the current climate, with a focus on safety, “many within the industry have unfortunately opted once again for single-use plastics but we need to remember that we can still make well informed and environmentally friendly choices while trying to be as safe as possible within regulations.”

I also believe that reusable products will return at some point in the future. For now, though, that’s not possible. Single-use will continue to be our go-to, but proper education is required to ensure that our use of it does not spiral out of control in the interim. The catering and hospitality sector has gone to great lengths, in my opinion, to become one of the most environmentally conscious industries in the world and has a big part to play in ensuring its customers are not only purchasing greener and recyclable products, but are also disposing of it properly or, are given an incentive to repurpose it.

As an industry, the onus is on to ensure we’re still doing our bit to curb what is once again becoming a huge issue.

• Steve Lloyd is CEO at Catering24, a UK-based supplier of disposable catering supplies & packaging.

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The coffee and tea industries are resourceful and resilient. Companies in both industries adapted and pivoted their businesses to survive in 2020, and all while maintaining a spirit of giving. Teaandcoffee.net has been filled with stories all year of companies’ generosity, good will and charitable efforts. This was not something new in 2020 but was enhanced during such an unprecedented and difficult year, and I am certain, will not suddenly disappear in 2021.

T&CTJ has also had to adapt our operations and alter our plans so we have been able to continue publishing our issues, posting daily news stories and distributing our weekly newsletter uninterrupted. We look forward to next year as we have a lot planned, specifically, commemorating Tea & Coffee Trade Journal’s 120th anniversary in a special issue! We will keep you apprised as to exactly which will be the commemorative issue. In the interim, if anyone has copies of any old issues – 1901, but any from the early 20th century would be wonderful – I would appreciate it if you could scan the cover and send it to me (my email address is listed below). Thank you in advance for your assistance. As for our other 2021 plans, stay tuned!

Enjoy the last few hours of 2020 and may 2021 be a happier, healthier and Covid-free year! Stay safe and be well!

• 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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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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