The famous aphorism states that a rising tide lifts all boats. In the beverage market, the ascension of health and wellness is elevating the utilization of ingredients that support a healthy lifestyle. Among those benefiting from this boost is the tea ingredient market.
“Over the last decade as consumers have continued to move away from carbonated soft drinks, they often migrate to a healthier alternative like tea,” says Philip Caputo, marketing and consumer insights manager for Virginia Dare, Brooklyn, N.Y. “A lot of this growth early on was a rising tide that helped all brands. Now consumers are looking to experience tea in different ways.
“All indications are that the tea market will continue to grow and adapt to consumer demands,” he continues. “Consistency of quality and taste is key in this market especially with the growth of the premium tea beverages.”
Suppliers also note that the current pandemic has furthered the demand for tea ingredients.
“The pandemic has put an even greater focus on mental and emotional health in 2020 and going into 2021,” says Micah Greenhill, beverage marketing director at Chicago-based Archer Daniels Midland (ADM). “Our research finds 35 percent of consumers report being concerned about mental health, and 84 percent see mental health as being just as important as physical well-being.
“Consumers are turning to tea to satisfy many aspects of their overall wellness,” he continues. “Tea signals benefits for immune function and gut health support, as well as energy-boosting properties. For example, black and green teas and matcha powders are perceived to provide an energy boost and assist cognitive function through caffeine, while kombucha is sought after for digestive health support.”
Due to the coronavirus, there has been heightened demand in the beverage market for tea powders.
“The tea powder market has been relatively flat over the past two years,” says Art Lopez, director of marketing for tea extracts at Finlays, Lincoln, R.I. “This is due to some of the leading ready-to-drink (RTD) tea brands adopting a method of production named direct-leaf-extraction (DLE). This shift in tea delivery format has lowered tea powders overall market share and growth rate within the retail RTD space.
“Interestingly, recent events with COVID-19 have seen consumers going back to brands that are offered in multi-serve formats for easy consumption for the whole family while at home,” he continues. “A lot of these brands utilize tea powder because it’s easy to use, economical, and has a long shelf life. This recent COVID-19 shift has brought some opportunity for tea powder to perform in the short term.”
As brand owners look to support better-for-you beverage demands, ingredient suppliers note that coupling tea with vanguard categories can provide beverage brands with an expanded healthy halo.
“Everyone has caught on to the amazing growth within hard seltzers. Summer of 2019 was the summer of a massive influx of new hard seltzer brands trying to steal market share by leveraging their brand to attract consumers,” Lopez says. “These entrants relied on branding and awareness more than flavors. This led to reliance on traditional tried and true flavors such as lemon, lime, raspberry, and peach. Summer of 2021 will see brands starting to differentiate themselves by introducing more exotic flavor combinations that stem from their base flavors. Tea, herbals and botanicals will be key components of these flavor extensions.”
Lopez prognosticates that beyond hard seltzer integration, the hard tea market is prime for innovation.
“If hard teas can take a page from the seltzer playbook, it would show that consumers want something that is healthy, refreshing, yet indulgent,” he says. “These three factors demonstrate an elevated experience for consumers and are a recipe for success. Existing players and new entrants will undoubtedly look to formulate a great-tasting hard tea that is under 100 calories per serving.
“Look for brands to utilize the health halo of different tea types, unique flavors, and refreshing carbonation to deliver an elevated experience against existing hard tea products,” Lopez continues. “If done well, this sub-category could very well steal some share from hard seltzers.”
Virginia Dare’s Caputo explains that beverage-makers can look into incorporating flavors and ingredients that support the healthy halo that is associated with tea.
“Certain ingredients invoke flavors associated with health and well-being,” he says. “Dark berries such as açaì, elderberry, and goji are known as rich sources of antioxidants, while ginger and mushrooms are known for anti-inflammatory properties. By integrating wellness flavors into their applications, tea brands can underscore their focus on targeted nutrition categories such as immunity, brain health, aging and digestion.
“Therapeutic botanicals and essential oils work well in applications such as infused teas,” Caputo continues. “Flavors like chamomile, green tea, hibiscus, mint, and cinnamon emphasize the functional aspects of these wellness-oriented products. When it comes to wellness flavors, formulators have a broad palette available and should be emboldened to experiment with innovative combinations and formats.”
In the United States, black tea and green tea are the standout performers for beverage formulation, experts note.
“Black tea in the U.S. is always strong with green tea greatly increasing in popularity,” says Randal Kreienbrink, vice president of marketing for Martin Bauer Group US, Secaucus, N.J. “Green teas image as a good-for-you beverage is increasing during this pandemic. Green teas flavor is also being accepted as being good.”
ADM’s Greenhill also details the health benefits that green and black tea varietals deliver. “Black tea extract has a composition that may include zinc, iron, magnesium, potassium, vitamin C and calcium,” he says. “Green tea has a similar antioxidant profile and consumers associate it with benefits to immune support, skin health and energy. Additionally, consumers associate these classic teas with heart health support, cognitive and mood support, all of which support consumers’ heightened focus on proactive and holistic health and wellness.”
Although black and green teas are the most popular tea sources in the United States, experts note that formulators are diversifying their tea portfolios.
“We see emerging tea varietals performing well in the rapidly growing ready-to-drink tea category,” Greenhill says. “This space has been very fruit forward in the past, but botanical varieties, such as chamomile and jasmine, are coming to the forefront. We also see matcha expanding beyond a niche item and becoming more mainstream. Consumers associate matcha with wellness benefits that include anti-inflammatory and antioxidant function, and its unique flavor profiles give it a premium profile.
“Additionally, yerba mate is emerging as a functional addition to coffee,” he continues. “Consumers often associate yerba mate with supporting heart and metabolic health, as well as supporting weight management. We also anticipate growth in white and red teas. White teas fit well within the functional beverage category, as they provide a clean color and flavor profile. Red teas, or rooibos teas, provide an interesting opportunity for product developers to introduce darker fruits or berry flavors, like elderberry, which can signal to consumers an association with antioxidant benefits.”
Martin Bauer’s Kreienbrink expects that path-breaking tea ingredients and much more will be part of the market’s future. “Great new varieties, novel easy to use tea packaging, and increased use as a better-for-you beverage [is on the horizon,” he says. “Tea is the latest ‘green story.’”
Report Abusive Comment