Brewed from high-quality tea leaves mixed with ingredients and toppings, such as fruit and whipped cheese, new-style tea drinks are driving the recent growth of coffee and tea retail chains in Asia Pacific.

Japan: Indulgence-driven substitution for coffee and desserts

Seen as replacements for coffee and desserts, new-style tea beverages are gaining traction in Japan. Traditionally, coffee is one of the most popular caffeinated drinks, but it has gradually gone downward since younger consumers are eager to explore more novel and indulgent drinks. According to Euromonitor International, year-over-year foodservice volume growth for coffee is decelerating, down from 4% in 2015 to just 1% in 2019. Bubble tea is benefiting from this development, with consumers switching from coffee to new-style tea drinks. Moreover, Japanese consumers have started to treat these beverages as a healthier alternative to desserts, broadening usage occasions.

Many companies are tapping into this fast-growing niche. Local company Ito En established several teahouses concentrating on new-style tea drinks, such as Matcha, and accompanying snacks in addition to its renowned Japanese tea products. Nayuki set up its first café in Osaka in June 2020, introducing its fruit tea to Japanese consumers. Meanwhile, Starbucks reopened its Teavana store with exclusive offerings like Yuzu Tea in Tokyo in July 2020. Such robust development will continue to shape the bubble tea industry in Japan.

Southeast Asia: Sweetness renovation

In Southeast Asia, new-style tea drinks are renovating bubble tea. Southeast Asians are passionate about sweetened beverages, with high demand for drinks like Milo in Singapore or Thai milk tea in Thailand. Because of this, most shops in the region are filled with mainstream bubble tea, like brown sugar beverages.

The growing presence of new-style tea drinks now offers consumers additional options to their sweetened bubble tea beverages. Since opening their first overseas outlets in 2018, HeyTea and Nayuki are winning over Singaporeans. Their success can be attributed to the options for customers to choose their preferred amounts of sugar in beverages, as well as the highly Instagrammable cafés.

To read this article in its entirety, check out A new kind of brew: Innovations in coffee and tea – digital magazine.

Peter Wong is a research analyst at Euromonitor International with a focus on drinks and tobacco as well as services and payment industries. Based in Hong Kong, he has nearly five years of experience in the industry. Wong drives strategic research across sectors through market sizing, forecasting and competitor landscaping. He also offers thought leaderships on multiple industries and topics. Prior to joining Euromonitor, Wong worked at a leading global market research company in Hong Kong and Taiwan, performing retail measurement, as well as quantitative and qualitative marketing research.

It’s easy to think of functional beverages as a 21^st century craze. And it’s certainly true that over the last decade or so, beverages that promise something beyond hydration have proliferated the market. But functional beverages aren’t a new craze at all; humans have been drinking them for thousands of years in the form of coffee and tea, and these two stalwart brews are still going strong in 2020 and beyond.

Tea is known to have been consumed for its natural functional attributes since as far back as 1500 BC; coffee dates back hundreds of years to the 15^th century. The functional attributes of these beverages were apparent immediately; as one legend has it, Moroccan Sufi mystic Ghothul Akbar Nooruddin Abu al-Hasan al-Shadhili discovered coffee after noticing unusual vitality in birds eating the berries of a coffee plant. After eating some himself, he experienced the same. A similar tale exists about the discovery of tea; one legend states Chinese Emperor Shennong drank from a bowl of boiled water into which leaves from a nearby tree had blown and found himself to enjoy both the taste and restorative properties of his new creation.

Legends are, of course, just that, but within any legend is a kernel of truth. The kernel here is clear: The natural functionality of coffee and tea has always been appreciated by those who drink it. Whether it be a kick of energy, some relaxation before sleep or something to settle an uneasy stomach, coffee and tea can provide those benefits. And, a few centuries later, the list of functional attributes in the coffee and tea we drink is only getting longer thanks to advancements in innovation and technology, not to mention a consumer base growing ever more demanding as well as cognizant of everything from where their favorite brew is grown and harvested to how it’s packaged and served. Nowadays, with the help of ingredients like protein, pre- and probiotics, plant-based creamers and more—plus advancements in textures and preparations—coffee and tea can do more for us than ever before.

Old standbys stay popular

They may be the oldest functional beverages, but coffee and tea aren’t going anywhere any time soon. If anything, the demands of daily life—combined with the still-developing effects of the COVID-19 pandemic—are leading to even more demand for these favorite brews. According to Research and Markets, the global coffee market is anticipated to reach US$134.25 billion in 2024 with a compound annual growth rate (CAGR) of 5.3%. That growth is even greater in the U.S., where Mintel reports the coffee market is worth $15.1 billion and expected to grow 22.7% through 2024. Though slowed by the decrease in on-the-go occasions in the current COVID world, ready-to-drink (RTD) has, to this point, been the fastest-growing segment—a reflection of the way today’s busy consumers take in their brew.

Tea is also getting in on the growth; Grand View Research found the global tea market was worth $12.63 billion in 2018 and expected to expand at a CAGR of 5.5% through 2025. In the Asia-Pacific market especially, trendy and Instagram-able tea drinks have exploded in popularity over the last few years. According to Euromonitor International, two upscale café chains in China— HeyTea and Nayuki—experienced a CAGR of 53% and 358%, respectively, from 2015 to 2019.

What’s old is new again

While coffee and tea remain global favorites, we’ve also come a long way from bitter, black, boring morning brews. Consumers want function, but they also want flavor, texture, color and everything else about their beverages to be an experience. Even in the birthplace of tea, the centuries-old drink is getting a makeover. Brewed from high-quality tea leaves mixed with other ingredients and toppings, such as fruit and whipped cheese, new-style tea drinks are popping up throughout the Asia-Pacific region. In the U.S. and elsewhere, consumers are experimenting with texture as well; Starbucks can serve up a cloud macchiato or a nitrogen-infused cold brew. Or, consumers can skip the line and grab any of several “nitro” brews available on store shelves and ready for consumption.

“Nitrogen infusions are popular in RTD coffee and tea because they add a creamy, velvety mouthfeel that can enhance the perception of sweetness and add textural complexity without adding calories,” said Holly McHugh, marketing associate at Imbibe.

And, if creamy isn’t one’s style, perhaps sparkling is. “The sparkling water boom that we’ve seen over the past three years was driven by consumers seeking less sugary versions of carbonated soft drinks [CSDs],” said KC Kuder, marketing communications specialist for Synergy Flavors Inc. “This trend naturally shifted into other beverage segments, innovating juice and alcohol categories, and is now hitting coffee and tea products.”

Innovation is also launching off solid trends within coffee and tea. Grand View Research reported the global cold brew market was worth $33.97 billion in 2018 and is expected to have a CAGR of 25.1% from 2019 to 2025. Flash and snap brews—similar in concept to cold brew, with the coffee quickly cooled after brewing—are now gaining traction, McHugh noted on page XX. She also pointed to the growing popularity of coffee concentrates for homemade lattes, cappuccinos and more.

Added functionality

Of course, coffee and tea gained their initial popularity because of the functionality they provide. Both naturally contain caffeine, and certain teas can promote relaxation, digestive health and more. Today, however, consumers are even more demanding, and a simple dose of caffeine isn’t enough to stand apart in the crowded market. This has led to breakneck innovation when it comes to added functionality.

At Virginia Dare, as Melissa Kvidahl Reilly detailed on page XX, dark berries like acai, elderberry and goji are trending tea add-ins thanks to their established antioxidant content. Other trending functional ingredients finding their way into tea include CBD, matcha and added vitamins and minerals.

In the coffee realm, caffeine augmentation is gaining steam as consumers look for an even bigger morning or afternoon pick-me-up. “The average cup of coffee has only around 85 mg of caffeine,” Brian Zapp, creative director at Applied Food Sciences, stated, “while the target for most RTD [cold brew] is around 100 to 150 mg of caffeine.” Ingredients like barley are also popping up in coffee drinks as a source of added protein. In addition, for a boost of mental clarity, nootropic ingredients like omega-3 fatty acids, L-theanine (green tea is already inherently rich in this) and lion’s mane mushrooms are gaining traction.

In both coffee and tea, other functional ingredients continue to emerge. Brands like Inner Life! are adding prebiotic fiber such as arabinoxylan to tea options. As Hannah Ackermann wrote on page XX, unpublished research showed the ingredient to be well-tolerated and gentle on the stomach, even at a dose of 12 g/d, without causing the gut discomfort, excess gas and bloating associated with other fiber sources, such as inulin (FEMS Microbiol Ecol. 2009;69[2]:231-242). In addition to prebiotics, adaptogens like ashwagandha, ginseng and reishi mushroom can be found in coffee and tea drinks.

What’s next for coffee and tea?

At the current rate of innovation—and given they’ve held strong for the last handful of centuries—coffee and tea are on track to maintain their staying power. But for brands to capitalize on the inherent popularity of these beverages, knowing where the market will go is paramount.

Offering delicious and healthy beverages may no longer be enough to satisfy ever-conscious consumers. Coffee especially has a well-known and too-often-ignored history of being harvested on the backs of underpaid and mistreated farmers. Brands would be well served to ensure any coffee beans used in their products are fairly grown, either through Fair Trade certification or other programs. Additionally, conveying that message loudly and clearly on packaging will make it easy for consumers to purchase guilt-free.

It’s also important to recognize the ingredients consumers are not seeking in their beverages. Standard table sugar may once have been a go-to addition to a cup of coffee or tea, but today’s consumers are more wary of sugar than ever before. To achieve the same sweetness consumers expect from that latte or iced tea, low- and no-calories sweeteners like stevia, erythritol, monk fruit and honey are all popular choices to replace sugar and artificial sweeteners.

Another common coffee and tea add-in, creamers are also getting a makeover. Dairy-based milk and cream and often being replaced by plant-based versions, perfect for the growing number of consumers avoiding dairy for ethical, environmental or health reasons. Almond, cashew, macadamia, coconut and, increasingly, oat are all popular bases for nondairy creamers, sold both separately for at-home occasions and in RTD coffee and tea beverages.

And, of course, no discussion of any industry these days would be complete without mention of COVID-19 and the environment it has created. The days of sitting down for hours in the public space afforded by a café are, at least for the time being, over. On-the-go occasions in general have decreased with so many people now working from home and otherwise avoiding public spaces. As such, at-home preparations have increased. As Geri Berdak wrote on page XX, “Multiserve packaging, bag-in-box and cold brew concentrates are all packaging options that will encourage in-home consumption” while consumers remain more or less locked down. She also mentioned the opportunity for RTD coffee and tea brands to take advantage of the “permissive indulgence” consumers are seeking by incorporating more dessert-inspired flavors.

Whether at-home, on-the-go or—when the world returns to a sense of normalcy—in the comfy atmosphere of a neighborhood café, coffee and tea are on track for another several centuries of consumption. But it’s clear the days of forcing down bitter, boring brews are over and innovative, functional pick-me-ups are in. Even old standbys need the occasional makeover, and coffee and tea are in the middle of their most extreme one yet.

To view this digital issue in full check out A new kind of brew: Innovations in coffee and tea – digital magazine.

Throughout the U.S., Thanksgiving 2020 is going to have a much different look than prior years. From smaller family gatherings to no parade on TV, the COVID-19 pandemic will, as it has for the last nine months, loom large over everything.

However, the Thanksgiving news isn’t all bad. According to the American Farm Bureau Federation (AFBF), the cost of feeding your family this year should be lower than in past years. This year’s AFBF annual Thanksgiving cost survey—the 35^th edition of the survey—found the cost of a Thanksgiving feast for 10 (side note: that’s more than you should have this year) rings in at $46.90, or $4.69 per person. This cost represents a $2.01 drop from 2019.

That meal, according to the AFBF, covers “turkey, stuffing, sweet potatoes, rolls with butter, peas, cranberries, a veggie tray, pumpkin pie with whipped cream, and coffee and milk, all in quantities sufficient to serve a family of 10 with plenty for leftovers.” Average cost is calculated based on more than 230 surveys completed with pricing data from all 50 states.

“The average cost of this year’s Thanksgiving dinner is the lowest since 2010,” said AFBF chief economist John Newton.

This year’s price drop is largely driven by the cost of Thanksgiving’s star, the turkey. The holiday centerpiece is down to an average of $19.39 for a 16-pound turkey, or $1.21/lb., a 7% drop from last year and also its lowest point since 2010.

Other parts of the AFBF Thanksgiving meal to see a drop in price this year compared to last include whipping cream (down $0.34) and sweet potatoes (down $0.31). However, some key Thanksgiving staples did see a rise in price this year compared to 2019, led by dinner rolls (up by $0.16) and stuffing (up $0.13). Pumpkin pie mix and cranberries also saw modest price increases.    

The AFBF also included a subset of Thanksgiving foods not included in their overall meal, including ham, russet potatoes and frozen green beans. These ingredients added $13.21 to the cost of a dinner for 10, for an overall cost of $60.11. The entire meal, with those three ingredients included, costs about 4% less than in 2019.

A full breakdown of the cost by ingredient can be found here.

Finally, the AFBF made sure to assuage fears of another round of grocery hoarding similar to what we saw during the initial stages of the pandemic. “Turkeys—and other staples of the traditional Thanksgiving meal—are currently in ample supply at grocery stores in most areas of the country,” Newton said.

At a time when consumers are taking a more proactive approach to health maintenance, they will increasingly seek out products that offer a functional boost. This creates a great opportunity for a product like coffee, which is already a vital part of the daily routine for countless millions of people.

Research conducted over the period Q4 2019 found that across the globe, 69% of consumers said they drank coffee at least once a week, making it a more popular choice than tea (60%). Moreover, while coffee is primarily associated with offering small moments of indulgence, it has the capacity to become a beverage associated with greater potential health benefits.

For instance, 29% of coffee drinkers said they would find probiotic claims within the sector appealing. Meanwhile, 40% said they would find coffee products positioned around being high in vitamins and minerals appealing. This shows consumers want products that offer health benefits beyond basic nutrition and hydration. A total of 55% of coffee drinkers said they deem coffee to be healthy already, which can be attributed to ingredient components such as antioxidants.

To read this article in its entirety, check out A new kind of brew: Innovations in coffee and tea – digital magazine.

Will Cowling is marketing manager at FMCG Gurus.

While the last year has been gripped by the global COVID-19 pandemic, another global crisis continues to weigh on researchers—the global climate crisis. And, according to new research published in Science, without fundamental changes to the way food is grown and produced, irreversible climate change may be unavoidable.

The study, authored by Michael A. Clark et al. and published this month in Science, warns that without intervention, the emissions caused by the global food system could preclude the Paris Agreement’s stated goal of limiting the increase in global temperature to 1.5° or 2°C above preindustrial levels.

The study separates the global food system from other sources of greenhouse emissions, and its findings are dire. According to the authors, “We show that even if fossil fuel emissions were immediately halted, current trends in global food systems would prevent the achievement of the 1.5°C target and, by the end of the century, threaten the achievement of the 2°C target.” The authors do not mince words when giving warnings about the interventions necessary to reverse this trend, stating, “Meeting the 1.5°C target requires rapid and ambitious changes to food systems as well as to all nonfood sectors.”

Emissions from the global food system are, according to Clark, “a function of what we eat, how it’s produced, and the size of the population.”

Clark pointed to several specific sources within the global food system as problem areas, including the production of beef and other red meat. He also pointed to fertilizer use and production as another problem area. Clark provided several examples of how such a reduction could be achieved. Among those suggestions, he mentioned a reduction in meat, dairy and eggs and an increase in fruits, vegetables, whole grains and nuts. He also noted such a shift in diet on an individual level also comes with its share of health benefits, a win-win situation he described as having “enormous co-benefits.”

Other factors, such as food waste, also play into global emissions. According to Clark, “if the emissions associated with food loss were a country, it would be the third largest emitter in the world.” Making the food system more efficient and limiting that food loss—or re-allocating such potential losses to areas in need—would help eliminate unnecessary emissions. That overall process, says Clark, comes to do three simple truths.:

“One, food matters to climate and if we continue eating the way we are, it will result in catastrophic climate change,” Clark said. “Two, there is a lot we can do; third, everyone has a role to play—consumers, businesses, food processors, everyone.”

Prebiotics and probiotics are easily confused but offer distinct digestive health benefits. Probiotics are good bacteria that fight off harmful bacteria in the gut and help establish a healthy microbiome. Probiotics are found in foods such as yogurt and specialty beverages, including “gut shots” and kombucha.

Prebiotics are dietary fibers often found in grains, vegetables and fruits that cannot be broken down by enzymes in the digestive system. These nondigestible carbohydrates act as fuel for good bacteria in the gut, including probiotics, and optimize their growth and functions.

To develop a successful gut health regimen, it is vital to include both probiotics and prebiotics. Consuming only probiotics without prebiotics is like planting seeds on a desert plain instead of fertile soil.

As consumer awareness of prebiotics' role in the microbiome grows, beverage manufacturers should consider new ways to market teas with fiber benefits. Existing teas with fiber already in the marketplace are often promoted as having laxative or detoxifying benefits. These "Skinny Teas" or "Smooth Move" teas generally use psyllium husks as their fiber source, which can have prebiotic benefits—but when not taken properly, also can cause severe gastrointestinal (GI) distress, including bloating or loose stools.

A new generation of fiber-rich teas specifically developed with prebiotic benefits is now rolling out—minus the potential for digestive distress.

To read this article in its entirety, check out A new kind of brew: Innovations in coffee and tea – digital magazine.

As a registered dietitian, Hannah Ackermann uses her expertise in food and nutrition to help Comet Bio educate consumers and tell its ingredient story. Prior to joining the company, Ackermann worked in nutrition communications at leading global market research and public relations firms. She holds bachelor’s degrees in nutritional science and journalism from Indiana University, Bloomington, and an MBA in marketing from Dominican University, Chicago.

Mars, a family-owned global pet food, veterinary care, confectionery, snacking and food business, and KIND, a healthy snacking leader, today announced the next step in their strategic partnership, with Mars acquiring KIND North America. 

KIND North America will join KIND International to create one organization operating across 35 countries, functioning as a distinct and separate business within the Mars Family of Companies. This provides the opportunity to further the KIND Promise, a set of nutrition principles that have guided the company’s innovation since its founding, and KIND’s mission to create a kinder world.

KIND Founder and Executive Chairman Daniel Lubetzky will play a key role in the future development and expansion of KIND, helping to maximize the reach and impact of the KIND mission and products, while upholding the KIND Promise as the brand expands into new categories and geographies. He will retain an ongoing financial stake in KIND, a majority of which was previously donated to charity to further his philanthropic efforts to build bridges across lines of divide.

Partnership success

Over the past three years, Mars and KIND have partnered to bring KIND (including signature KIND Bars) into new geographies and categories, remaining true to the KIND Promise that the first and predominant ingredient in all of its snacks and foods is a nutrient-dense food. As a result of the partnership, KIND has expanded into more than 35 countries (including China, Germany and France) and into eight total categories (including frozen and refrigerated), and has launched new products such as KIND Bark, KIND Frozen Bars and KIND Smoothie Bowls. 

Grant F. Reid, CEO of Mars said, “When we began this partnership, I said it was one built on mutual admiration and a shared vision for growth. After three years, you can see the impact, as together we have grown the healthy snacking category and brought KIND and the KIND Promise to 35 countries and into new categories. We’re delighted to continue to build on this success and welcome KIND North America into the Mars Family of Companies.” 

“I am so proud of how well the Mars and KIND teams have complemented and strengthened each other over the past three years,” Lubetzky said. “We are now well positioned to further advance our efforts and continue building a foremost health and wellness platform. As we said in 2017, Mars is a company that shares KIND’s passion for business as a force for good, and I am confident that together, we will be able to make our small contribution to make this world a little kinder.” 

Commitment to KIND promise

KIND remains committed to its Promise and mission and will further its purpose to build a kinder world one snack and one act at a time by committing to being:

• Kinder to our bodies: KIND will add more than 2 billion servings of nutrient dense foods to people’s diets by 2025
• Kinder to our planet: KIND will exclusively source 100 percent of its almonds from bee friendly farms by 2025
• Kinder to our communities: KIND will continue to break down barriers to create more inclusive and empathetic communities

Source: Mars, Inc.