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Coffee & Tea Market Trends
Feb 14, 2018

Coffee & Tea Market Trends

        The landscape of the beverage market is changing as consumers begin to shun sugar-laden carbonated soft drinks (CSDs) for drinks they perceive as having healthier halos such as coffees, teas, herbal and energy drinks. The coffee and tea market is growing, with flavors, ingredients and functionalities appealing to the conscious consumer who craves new flavors in his or her beverage, but who also desires natural, clean-label drinks. 

        

        Trends such as exotic flavorings, cold-brew coffees and ready-to-drink (RTD) beverages are making their way into the market, and according to a Mintel study, the top three non-alcoholic beverages (carbonated soft drinks, juices and dairy milk) have all shown stagnant or declining sales, while energy drinks and coffee experienced a strong sales growth of 8.7 percent.


         With consumer cravings straying from the conventional path, the cold brew market has a large opportunity for growth. Mintel reported 24 percent of consumers drink retail-purchased cold brew coffee, and retail sales reached an estimated $7.9 million in 2015, increasing 339 percent since 2010. But while cold brew sales are up, it is still only a small part in the RTD coffee segment, making up just 0.4 percent of sales estimated in 2015. This leaves significant opportunity for cold brew innovation. 


Cold Brew Beverages

       According to Kip Murphy, marketing manager, Virginia Dare, cold brew coffee is popular among consumers because it offers smoother, less acidic flavors than regular coffee, and its high caffeine level appeals to younger generations.

Nesha Zalensy, technical sales manager, Fiberstar, said brewing coffee at a lower temperature helps avoid developing compounds that cause coffee to turn bitter as it cools, and this helps the coffee maintain flavor throughout its shelf life. 


Fruit Flavorings

         Fruity flavors are being added to both hot and cold beverages on the market, however when it comes to coffee, the coffee fruit itself can provide health benefits as well as flavor. 

FutureCeuticals offers coffeberry cascara, coffee fruit granules made from the powerful super fruit itself. According to Andrew Wheeler, the company’s director of marketing, “The reintroduction of coffee fruit nutrition back into ground and instant coffee provides a bold flavor note and unique and beneficial phytonutrients that are lost during the roasting process.”


Nitro-Infused Coffee

         A trend that has been introduced to the market is nitrogen-infused coffee. According to Lucas Gonzales, strategic marketing partner of coffee and tea at Kerry Ingredients, consumers are interested in nitro-infused coffee, which is generally cold brewed.

“The nitrogen bubbles create a frothy, indulgent texture, bringing out the natural sweetness of coffee,” Gonzales said. The smooth taste offered by cold brew coffee and the increased perception of sweetness from the nitrogen bubbles allow less sugar, milk and other enhancers to be added to the beverage, reducing the number of calories, fat and sugar consumed. 


Vanillin

        A popular additive for both coffees and teas, offered by the company Solvay, is vanillin. Solvay has a variety of vanillin-based ingredients, a product known as a flavoring agent for coffees, teas and functional beverages. 

According to Aparna Parikh, head of marketing at Solvay, vanillin provides a creamy texture and smooth mouthfeel, masking off notes of proteins and natural sweeteners such as stevia, vitamins and omega-3s.


Teas

       Tea consumption has a strong association to good health, and as consumers’ desire for clean-label, healthy beverages continue to grow, so does the tea market. Mintel reported that over a third if “iGens” say they would pay more for coffee and tea with added health benefits. This gives the tea market a large opportunity for growth, and allows manufacturers the ability to offer products with these added health benefits. 


Green Tea

       The market for green tea is smaller than the market for black tea, but it is at the front of growth in the tea category according to Murphy. 

Even though consumers find the grassy, green taste of green tea less appealing than the taste of black tea, it does have extraordinary health and weight management benefits he said.

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