For example, McCormick Place and show organizer, PMMI, The Association for Packaging and Processing Technologies, worked with Dow, the official sustainability partner and the official sponsor of show floor recycling at PACK EXPO International (PEI), to minimize the environmental impact of the event and divert as much waste as possible from landfills.

One of the strongest components of all PACK EXPO exhibitions is roster of educational sessions, and this year was no exception. There were myriad sustainability-related educational presentations at the show, which tackled topics such as sustainable technology and materials innovations, the use of recycled content and renewable materials, transformation of waste, circularity, refill/reuse options, life cycle assessment, sustainable package design, reduction in emissions, extended producer responsibility, and data collection.

In the Plastics Sustainability Through Collaboration session, Patrick Krieger, vice president, sustainability at the Plastics Industry Association (PIA), discussed how the packaging industry is evolving to develop solutions that are more circular and sustainable and how the plastic packaging value chain is coming together to promote innovative products and programs that address industry needs. Krieger said that with regard to sustainability, the plastics industry is focusing on three main areas:

• Promoting a circular plastics economy
• Eliminating plastic in the environment
• Using resources responsibly.

One of the PIA’s newest programs is Operation Clean Sweep, which promotes zero plastic loss, that is, making sure no resin is lost during manufacturing.

In the Sustainability Central pavilion, Amazon – which stated it has reduced packaging per shipment by 41% since 2015 – presented the Elevating Packaging for E-Commerce to Boost Customer Experience session. Amazon executives discussed how to enhance the customer experience while protecting products and minimizing packaging waste. “Shoppers want less packaging, they want it to be recyclable, and they are willing to pay more for sustainable packaging,” said Kirsten Freiheit, head of North America partner engagement, sustainable packaging at Amazon. She shared that although shoppers want reduced packaging, e-commerce packaging needs more protection.

Heather Smith, senior business development manager, sustainable packaging at Amazon informed attendees how companies can improve customer satisfaction with packaging design, so “you can build excitement with the ‘unboxing experience’.” She added that branded packaging enhances customer experience.

The Paper & Packaging Board, which was exhibiting in the Sustainability Central pavilion, highlighted its new campaign to help promote carton recycling. P&PB executives, noting that 89% of consumers prefer paper-based shipping materials, explained that food and beverage cartons are made primarily out of responsibly-sourced paperboard, a renewable, plant-based material, and contain some of the highest quality fiber available in the recycling industry. P&PB’s new program wants companies to add the recycling logo to their carton packages to remind consumers to recycle their cartons. Carton recycling is available to more than 62% of US households and that number is growing every day. Recycled cartons become paper towels, tissues, office and writing paper, and sustainable building materials to name just few of the many products.

There were also a number of sessions dealing with Extended Producer Responsibility (EPR) or Packaging Producer Responsibility. EPR is a public policy mechanism that requires packaging producers (generally product brand owners) to help fund the recovery of their packaging. How funding is set, what the program goals are and who manages the system differs across the various states that have passed legislation. In 2025, many packaging policies relating to EPR will take effect. For example, California’s EPR law includes specific source reduction requirements for plastic packaging. Several other states are also now considering source reduction requirements though legislation: Connecticut, Hawaii, Massachusetts, Minnesota, New Jersey, New York, and Washington.

• 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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According to the British Coffee Association,  Britons drink 98 million cups of coffee every day. And although 80% of UK households buy instant coffee for in-home consumption (particularly those aged 65 and older), ground coffee and single-serve coffee pods are becoming increasingly popular, particularly among Gen Zers and millennials (aged 16 – 34), who account for 16% of all buyers. Furthermore, the consumption of cold brew coffee is also rapidly expanding. Similar to ground coffee and single serve, cold brew is preferred by younger consumers and has untapped potential throughout the UK. (For more information see T&CTJ’s feature: Cold brew experiences growth in the UK market).

In terms of out-of-home consumption, the café culture is booming. The BCA reports that 80% of those who visit coffee shops do so once a week and 16% of the population visit once a day.

Given that that the café culture is surging, Germany-based coffee blog Coffeeness researched the best UK cities for coffee lovers, taking a variety of factors into account, including the number of coffee shops and coffee roasters as well as coffee pricing, search trends and annual coffee festivals and events. Interestingly, the top 25 cities are in England. Coffeeness found that the top ten best cities in the UK for coffee enthusiasts, in order are:

1. Salford
2. London
3. Preston
4. Bath
5. Brighton & Hove
6. Liverpool
7. Durham
8. Peterborough
9. Wells
10. Leicester

According to Coffeeness, which used Yelp as its main source for calculating the number of cafés, cake shops and coffee roasters in any given city, Salford is by far, the best UK city for coffee lovers in terms of accessibility to good quality coffee. It’s also one of the most affordable cities for coffee. Conversely, London is one of the cities in which the average cost for a cup of coffee is highest (topped by only Ely in Cambridgeshire).

Other ‘most affordable coffee cities’ include the cathedral city of Durham – where a cup of coffee is £2.81 on average – followed by Peterborough, Chelmsford, and Salford.

The research finds that London’s café culture is really thriving. The city – which now boasts more than 4,100 coffee shops – ranks highest overall when it comes to coffee festivals and events.

Per Coffeeness, Sunderland, located in North East England, ranks as the least favourable UK city for coffee lovers. And while Bristol ranks fairly low in terms of coffee accessibility and quality, it comes in second for coffee culture and interest.

For the full report on the best cities in the UK for coffee lovers, click here.

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

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The above quote is from Chris Costagli, vice president of food insights lead at Nielsen IQ (NIQ), during his recent National Coffee Association (NCA) webinar, “Mastering Omnichannel Sales in the Coffee Industry” in which he informed attendees that more than half of all food and beverage unit sales originate in the food channel, but in the past year, 3.6 billion units disappeared from the in-store food channel, 67% of which was due to lost sales. Furthermore, the in-store food channel lost 2.41 billion units that completely disappeared from the FMCG industry altogether.

The lost sales can be attributed to consumers:

• Scaling back to reduce spending
• Buying less due to GLP-1s (weight loss drugs)
• More away-from-home consumption

Rising food prices remain top of mind for shoppers so they are buying less. Costagli said the F&B sales in the food channel have trended negatively over the past few years, falling 1.8% in the last year. As such, consumers are taking action to manage spend, and most shoppers have made changes to how they shop to save money — 87% have changed how they shop to save money, and they are using an average 3.9 strategies to do so (such as switching to lower-priced options, buying their favourite brands only when on sale, buying the brand that is on sale, buying essential items only, etc.).

And while 67% of in-store food channel unit loss is due to discontinued purchases, 34% of in-store food channel lost units are unaccounted for. Costagli explained that the ‘lost units’ shifted to other channels, the majority of which were purchased online. “Those shifting trends plus online growth underscore the importance of an omni strategy,” he said, adding that online sales grew 17% over the past year, driven by growth in every department across the store.

Consumers are shopping online – 85% order from pure play online retailers for home delivery and 69% order delivery from hypermarket, supermarket, mass stores – and they are experimenting with emerging retailers like TikTok. “The power of social media is significant and is something that should be used in omnichannel marketing,” Costagli said, adding that consumers using TikTok Shop are being introduced to new brands they did not already know, creating opportunity for some manufacturers and more competition for others. He shared that 62% of TikTok users are familiar with the TikTok shop experience and another 62% of TikTok users are open to making a purchase through TikTok Shop.

In online outlets like TikTok, influencers can have a huge impact, so Costagli suggested brands/manufacturers should lean into social platforms to drive awareness and capitalize on viral opportunities. During the webinar, he highlighted several ‘coffee influencers’ such as Morgan, the 2022 U.S. Barista Championship winner who is teaching 6.2 million TikTokers how to create the best coffee, while Cosette, a TikTok creator who has grown her page to 781.7K followers by sharing how she makes barista-style lattes at home for a fraction of the price.

Social shopping is in its infancy but already its showing strong signs of growth. NIQ revealed that shopping on TikTok generated >$2 billion in CPG sales over the past year. Health and performance food products account for nearly a quarter of TikTok food sales, driven by influencers showcasing health and wellness products.

Gen Z shoppers are more likely to be using third party apps to shop online and they believe AI-enabled tools provide helpful benefits that support their shopping needs. Hence, the smartphone’s role in shopping is evolving and influencing decision making more than ever. “Shoppers are turning to AI for everything from meal planning to diet advice and party inspiration. AI has the potential to influence what consumers buy and where they shop. Within seconds ChatGPT can give consumers product recommendations, suggestions on where to shop and much more,” Costagli explained, adding, “that has real implications for retailers and manufacturers: is AI recommending your brand or your stores?”

Simplicity and trust are paramount when it comes to shopping online. And with only eight seconds to engage online shoppers, it is critical that product information is accurate with the most important callouts. “Above all else, the online shopping experience must be optimized for a ‘Mobile First’ consumer,” said Costagli. NIQ research found that when shopping online:

• 77% of shoppers expect the online product titles to be more specific and transparent,
• 76% of shoppers prefer to have enhanced product content available when purchasing online,
• 90% of online buyers say that primary image quality is the most important factor in an online sale.

Costagli advised brands/manufacturers to create the perfect online store by partnering closely with retail partners and to drive online performance through availability, visibility, and content attractiveness. “Getting the online experience right for shoppers translates into growth.”

Coffee benefitting from the omni space — in fact, a quarter of coffee is sold online. Costagli shared that retailers sold nearly $6 billion worth of coffee online over the past year, up approximately 13%.

“The limits are endless, there are so many options online,” he said. “An omni strategy for coffee can tap into subscription services and direct-to-consumer and can benefit from a strong social media presence. Social media platforms like TikTok Shop are exposing consumers to brands and varieties not found in traditional retailers. This means that the competition for manufacturers is even stronger, including competitors that might not be on your radar.”

Meeting consumers online is a valuable proposition for retailers and manufacturers alike. Consumers are spending more online for coffee than they do in-store and they are buying more. Furthermore, online coffee shoppers are buying more units per occasion which suggests more variety seeking. Costagli advises retailers and manufacturers to promote incremental unit purchasing with wider selection and with purchase incentives.

According to NIQ, non-traditional channels are showing 31% growth in units per shopping occasion. Like TikTok Shop, non-traditional online channels are giving shoppers variety. For coffee drinkers, this means new experiences and flavours. For manufacturers this underscores the importance of innovation, especially in traditional retail both online and off.

Online coffee buyers are more affluent than those who buy coffee in brick ‘n mortar stores. Gen X, millennial and Gen Z consumers all engage differently so it’s essential to know your customer base, said Costagli and asked, “are your brands optimized online to reach coffee buyers where they are?”

No matter the type of site, it’s a fact that consumers are buying coffee online. To find success online, Costagli stressed that manufacturers must prioritize optimizing their search engine visibility and strengthening their social media presence to stay competitive and drive sales. “Navigating today’s market requires a relentless focus on the consumer.”

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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PACK EXPO International organiser, PMMI (The Association for Packaging and Processing Technologies) announced that the show featured 2,700 exhibitors providing solutions in more than 40 vertical markets and welcomed 48,000 attendees. 

Amid continuing global economic pressures, PMMI reported that the packaging machinery industry has shown resilience and adaptability. According to its newly released State of the Industry: US Packaging Machinery report, which Jorge Izquierdo, vice president, market develop at PMMI, discussed at the Media Briefing during the show, the US packaging machinery market is projected to reach USD $11.1 billion in 2024, driven by automation and sustainability. Industry growth is expected to peak in 2027, with a continued focus on innovative solutions to meet evolving consumer and regulatory demands. 

According to the report, growth for the first half of 2024 was bolstered by the “clearing of remaining backlogs from the pandemic, the continued adoption of automated solutions, and the increasing demand for new machines to accommodate new packaging styles.” However, as the year continued, backlogs largely dried up as new orders slowed. The softened demand resulted in lower growth for the year overall, with a growth of 5.8%, reaching a value of USD $10.9 billion of new machines shipped, per the report. 

The lighter demand for new machinery continued into 2024. The report reveals that the packaging machinery sector is expected to experience its slowest growth year compared to the last three years in the industry. PMMI noted that the Federal Reserve’s decision to hold interest rates high and the uncertainty surrounding the US election contributed to the slowdown. 

PMMI expects sales of new machinery to begin rising again in the second half of 2024 “as the wait-and-see mentality dissipates.” Furthermore, PMMI believes that there will likely be more requests for end-of-line automation as many companies continue to struggle with retaining labour for production lines. Growth is expected to peak again in 2027, “in line with the three-year peak-to-trough cycle that we have come to expect in this market.” 

The report finds that the beverage industry proved resilient with a steady demand for drinks of all kinds. Recent trends include diversification of drink sizes — as evidenced by the displays at many exhibitor’s booths at the show, such as Tetra Pak, whose ready-to-drink packaging sizes ranged from 200ml to 1000ml.

Sustainability is one of the most significant topics in the packaging industry today. And while the US has less stringent regulations compared to the EU, major players are increasingly shifting towards more sustainable packaging solutions. The PMMI report reveals that many companies are moving away from single-use plastics (SUPs) in favour of paperboard and other eco-friendly materials. This trend is driven by both regulatory pressure and of course, consumer demand for greener alternatives. 

In addition to Tetra Pak’s aseptic paperboard, aluminum, and polyethylene packaging, Graphic Packaging was showcasing its Boardio packaging. Boardio is a fiber-based canister that can be tailored from low to high barrier protection, making it suitable for different applications. Folgers debuted its 1850 coffee brand in Boardio packaging in Walmart and Costco stores earlier this year, and both Walmart and Target rolled out their store-branded coffees in Boardio packaging in September and October. 

A significant trend to watch is the shift in packaging materials, with glass and cans gaining popularity as the industry seeks more alternatives to plastic. However, aluminum is also growing in popularity given that it is infinitely recyclable. GEA Processing was showcasing its new Uni Bloc Flex aseptic filling machine, which is a bottle sterilizer, rinser, filler and capper all in one as there has been a movement toward consolidation of machines within the filling and packaging sector. 

Tucker Scofield, packaging sales manager, liquids and powders, noted that GEA’s machine is the only one on the market doing aseptic aluminum. “It’s not a new technology –it’s been around for 25 years – but it’s new for aluminum bottles,” he said. “Aseptic is really becoming popular now because technology is making it easier to do.” Scofield added that there has been a lot of interest from coffee, tea and water brands. The Uni Bloc Flex can also fill glass and PET bottles. 

 New packaging regulations coming to the US was also a major topic of discussion, but I’ll save that for a future blog. 

• 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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New Dawn Traders began in 2012, with the opportunity to sail aboard the Irene of Bridgewater to transport olive oil from Portugal to Brazil. Despite this being a failed mission, this voyage opened the door to future success.

With the cost of living rising, and supermarkets dominating supply chains with “cheap” options, it’s easy to think the idea of transporting coffee and produce by sail cargo is an unrealistic one. However, over the past 12 years, consumer demands have shifted dramatically, and many businesses now place sustainability at the heart of their operations.

Creating a more sustainable and ethical supply chain is proving its worth against all odds. The Vermont Sail Freight Project, the Sail Transport Network in the United States, the Greenheart Project in Fiji, TOWT in France, Holland’s Fairtransport, and B9 Shipping are just a few of the pioneering initiatives in sail cargo.

The focus is on British, Irish, and Dutch shores, where independent coffee roasters such as Farm Hand Coffee, based in Dublin, and Yallah Coffee, based in Cornwall, have teamed up with sailors to connect communities on both sides of the Atlantic.

It’s not every morning — or even throughout the day — that we think about the impact of our cup of coffee. But in my opinion, it would be quite mind-blowing to open my coffee jar every day and know that it had travelled thousands of nautical miles to reach me.

When spending company funds with large multinational corporations, local communities and farmers certainly miss out on the economic benefits.

As a final consumer, or as a business, it’s impossible not to feel much more connected to the process and the people behind the product when coffee, tea, or any other commodity is shipped by sail. After all, our coffee only reaches us thanks to a crew going with the wind.

• Inês Coutinho, digital editor, Tea & Coffee Trade Journal.
  Keep in touch via email: ines@bellpublishing.com Twitter: @TCTradeJournal or LinkedIn: Tea & Coffee Trade Journal

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Despite cutting back on grocery spending, Chris Costagli, vp/food insights lead, Nielsen IQ, in his “Mastering Omnichannel Sales in the Coffee Industry” webinar for the National Coffee Association (NCA), said that foodservice excluding alcohol sales are expected to approach USD $1 trillion this year, adding that foodservice and drinking places are recapturing share of U.S. food sales. “The trend change was dramatic in 2020; driven by more frequent at-home cooking and panic-induced stockpiling. Foodservice and drinking place sales are recovering and projected to recapture the lead in 2026,” he said. (Costagli noted that inflation and high menu prices have contributed to large growth in foodservice; however, these macroeconomic conditions are causing the growth rate to slow.)

It seems that in today’s stressful climate, away-from-home consumption plays an important role in consumers’ mental wellbeing. Despite inflation, Costagli said that most consumers are going out to eat/drink as least as often as usual. Only a quarter of those who eat/drink out have scaled back on the frequency of visits. There are more consumers visiting more often than usual than there are scaling back. “They are more than places to eat and drink,” he explained, “they are vital gathering spots that foster friendship and connection.”

Nielsen IQ (NIQ) found that one-in-five consumers said they would be lost without bars or restaurants. As such, going out weekly is the norm. Per NIQ’s CGA May 2024 US On Premise Impact Report:

• 63% restaurant/bar visitors make at least one trip a week
• 77% plan to go out to eat in the next month
• 47% plan to go out for a drink in the next month

According to Costagli, ‘treating’ is the main reason for going out more. Of the 29% going out more often, treating and variety seeking are leading motivators:

• I have been treating myself 44%
• There are new places that I have wanted to try 35%
• There have been more events than usual 25%
• I want to support local business 23%
• I have been able to save money recently 21%
• I am visiting while I have enough disposable income 19%

‘Away-from-home coffee’ is already considered an ‘affordable indulgence’ so these latest dining out trends bode well for coffee shops and cafés. At one of his NCA Convention presentations (it may have been the virtual convention in 2022 or the 2023 one in Tampa) Matthew Barry, senior beverages insights manager, at Euromonitor International, spoke about the emergence of two types of coffee shops following the Covid-19 pandemic: those offering convenience (speed, mobile orders, etc.) and those offering an experience.

If one of the primary reasons consumers are drinking and dining out is because these places help “foster friendship and connection,” then those coffee shops favouring ‘experience’ over ‘convenience’ have a real opportunity to solidify their establishment as a ‘go to gathering place’ and attract more consumers by elevating or enhancing their in-store experience, through ambiance, menu options, and of course, customer service.

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In a recent webinar entitled, “The Private Label Revolution: Is CPG having a Netflix Moment?”, Nik Modi, global co-head of consumer/retail equity research and HBC, beverage and packaged food analyst, RBC Capital Markets, LLC, and Hunter Thurman, founder/president, of consumer psychology and behaviour consultancy, Alpha Diver, discussed the growth of private label products within consumer packaged goods (CPG) and the impact they are having on branded CPG products.

Historically PL products have been used by lower income consumers and by higher income consumers when times were tough so they would ‘trade down’, but the latter would ‘trade up’ again when the situation improved. But, Nik Modi, said this time it’s different. “The percentage household penetration for private label products has increased over the past few quarters and has surpassed pre-Covid levels,” he said, noting that PL has experienced broad market share gains.

Modi said that a 2023 study showed that about USD $1.5 billion worth of sales shifted away from national brands and sales have also shifted from the grocery channel to the rest of food channels (discount, mass, club) where PL brands sales growth notably outpaced national brand sales growth. “The percentage price gap between PL and branded players has been volatile but is recently on a downward trend approaching the lowest levels seen since 2019,” he said, adding that while this should be good for brands, the problem is that the branded price is still really high. For consumers today, Modi explained, it’s not about trending down, about trending out.

Furthermore, the percentage of household penetration of PL CPG is correlated with age cohort, with higher penetration in households of older individuals, but currently, noted Modi, Gen X consumers have the highest buy rate. He also shared that baby boomers are also heavily involved in PL product. “Companies do not market to them anymore but baby boomers have the most disposable income because they have no one they need to spend money on but themselves. Brands tend to forget about them but baby boomers will big chunk of spending over next few years,” said Modi. (Sidenote, Modi said it is because of Japan’s large baby boomer population that the country is the biggest luxury market in the world.)

Over the long term, PL is projected to gain 5 pts of dollar share by 2030. And although beverages have historically had low PL participation, it is gaining market share as branded beverages continue to see comps loss.

Retailer initiatives are ramping up and becoming more sophisticated and AI is being overlaid to help them make better decisions. “There is a major shift happening in PL — perception changing, the market, category and industry is changing. Backward looking isn’t going to help,” said Hunter Thurman, president and founder of Alpha Diver.

Thurman said what happened with Netflix 20 years ago is happening with PL brands today. “Netflix used to offer knock DVD rentals, cheap, & convenient. Pl in the past offered knock-off products, cheaper. Then Netflix began to offer a new kind of entertainment: on-demand which elevated the frame of reference to cable TV. PL products introduced a new kind of brand: cross category and attractive prices that engaged a new kind of shopper. And while Netflix started offering original, exclusive content, PL brands are offering innovative exclusive products,” he said, adding that “no one saw the ‘Netflix disruptor’ coming when it first emerged.”

“Private label/store brands are the new disruptors—they can innovate faster than the national [multinational] brands, said Thurman. “We need to banish the ‘trade down to store brand’ mentality. Modern store brands are far from knockoffs, and it’s changing shopper psychology and decision-making. A new type of shopper is being engaged and it’s changing the marketplace. Realty is that a new type of shopper is being engaged via these store brands.”

Gone are the days of ‘national vs store brand’, today, Thurman says there are three types of brands: national, owned brands and value brands. To consumers, there is little difference between ‘national’ and ‘owned brands’.

Target Stores (favorite day) and Amazon (Aplenty) launched PL brands in spring that are on-point with current trends. Walmart launched bettergoods in April — a new PL brand focused on quality, unique, chef-inspired food items at an affordable price. “This brand does more than just compete on price. This is very different than what we’ve seen at Walmart because it is not entirely a price-based proposition,” said Modi. “bettergoods is offering trendier, unique products, not just about higher prices, different foods and flavours that even national brands are not offering.”

bettergoods is competing in categories such as coffee, dairy, non-dairy (almond milk), beverages, snacks, chocolate, etc. Interestingly, Modi noted that from an income point of view, those in the USD $125K+ income bracket are showing the highest household penetration by a wide margin thus far in the launch of bettergoods. “Walmart has recruited a lot of higher income households into their stores over the last couple of years. This is a way for them to keep these types of consumers.”

Both Modi and Thurman noted that with their unique, on-trend offerings, PL/store brands are engaging the growing, ever-important, ethnically diverse Gen Z consumer.

“Consumers today are not buying PL/’owned brands’ because they are cheaper, they are interested in them,” said Thurman. “Owned brands are creating more excitement so attracting the coveted shoppers, not about trading down on price. We must stop thinking about national vs PL/owned brand in such a binary way.”

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In his presentation, Carman Allison, NielsenIQ, said that optimism around the consumers’ personal financial situation is lagging, especially in North America and EU markets, despite the rate of inflation slowing across the globe. He explained that this has created financial polarization, noting, “it’s about the haves and the haves less.”

Allison said that in a recent consumer survey (conducted over the summer), Nielsen observed a shift from cautious to conscious consumption. “Heading into 2025, the state of consumers is determined, with three types of consumers [emerging]: resilient, vigilante and intentional. Consumers are spending in a more strategic way — they prioritize at-home, planning and waste-avoidant spending.”

This behaviour, Allison said, has ‘redefined discount’. “Consumers have embraced (and expect) a broader value from the concept of ‘discount’,” which is impacting buying behaviour across the board, not just in food, beverage (coffee and tea included) and other CPG products.

In their presentations, both Shabnam Weber, president of the Tea and Herbal Association of Canada (THAC), which organized and hosted this year’s NATC, and Peter Goggi, president of the Tea Association of the USA, discussed how health and wellness are driving components for consumers’ purchases.

“Consumers are searching for authenticity and community. People are disillusioned, particularly those ages 16-25,” said Weber, “but what’s hot is wellness and it spans all demographics.”

And while this should greatly benefit tea, it has competition from other ‘healthy beverages’. “Humans don’t ‘drink more’ during day, that is, they do not increase the number of beverages they drink in a day,” said Goggi, “they are swapping out one beverage for another, not adding.”

One strong opportunity for tea is in foodservice. “Globally, tea as an away-from-home beverage has a significant share,” said Margot Swindall of Technomic, but tea has an opportunity to further expand its share. She said cold/iced/frozen teas are growing in both Canada and US. “Hot tea is more often used as a pick-me-up while iced tea tends to serve as a meal companion and thirst-quencher (especially in the US).”

Swindall highlighted the top global foodservice consumer markets for tea for both hot and cold/iced tea in her presentation:

Hot Tea

1. Russia (47%)
2. India (43%)
3. Chile (37%)
4. Indonesia (37%)
5. Malaysia (36%)

Cold Tea

1. Philippines (52%)
2. Indonesia (45%)
3. Malaysia (44%)
4. S. (41%)
5. Thailand (39%)

Swindall said that tea meets other beverages head on in creativity and format extension on the global foodservice stage (in terms of functionality, healthy indulgence, etc.), and consumers are willing to experiment with tea (flavours and formats) — all of which enhances tea’s ability to grow its share in the foodservice channel.

“Foodservice is the playground for tea trial, experimentation and innovation,” Swindall stressed. So not taking advantage of this ‘under tapped’ market would be quite a missed opportunity.

• 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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A survey of 2,000 adults found that these stress headaches break down to three times a week and that respondents recalled having brain fog just as often. Reviewing their current stress levels, the survey found that 41% said they’re at their peak stress for the year so far. [Although the survey was among Americans, the symptoms and causes of stress are similar across many countries. For example, according to Euromonitor International’s Voice of the Consumer: Health and Nutrition Survey 2021, globally, stress and anxiety now rank as the second most common health concern. Many of the other top reported issues, including sleeping problems and headaches, tend to be closely linked to high stress levels.]

Results of the new online survey – conducted by Talker Research for Traditional Medicinals between July and August 2024 – showed that while 30% are hopeful that their stress level will go down by the end of the year, a quarter of respondents think there’s a chance it’ll go up (26%). Yet, 45% have never taken a mental health day or sick day from work solely because of stress.

Comparing their stress levels to previous years, 38% of those surveyed said that 2024 has been more stressful than 2023, but less so than 2022 and the preceding years.

What is it about this year that is exacerbating their stress levels? Respondents are worried about their finances (35%), the economy (28%) and their physical health (25%). Others are troubled by the news landscape — particularly the 2024 presidential election (20%) and other world issues (19%), both of which I’m surprised are not higher percentages. In terms of how respondents are combatting these high-intensity moments, results showed that a majority feel overwhelmed during these times (58%).

What’s Stressing Americans Out?

1. Personal finances — 35%
2. The economy — 28%
3. Physical health — 25%
4. Family — 25%
5. Mental health — 24%
6. The 2024 presidential election — 20%
7. The news/world issues — 19%
8. Work — 16%
9. An unexpected life event — 15%
10. Romantic relationship — 13%

In an exclusive article for T&CTJ, “The caffeine paradox: sleep, anxiety and the endless rise in caffeine consumption,” Matthew Barry, insight manager, food & beverage, Euromonitor International, wrote, “Although consumers’ stress and anxiety levels remain high, their desire for caffeine has not waned. In fact, the demand for higher caffeine products is actually rising.”

How can these two clear trends coexist? Why are consumers eager to increase their caffeine consumption while also being concerned with their stress levels and sleep quality? Barry posited that the explanation is found in the caffeine paradox — higher levels of stress and sleep troubles lead, paradoxically, to higher demands for caffeine. “At the core of consumer stress is the desire to accomplish more. And this desire creates more stress, which leads to more caffeine consumption for sufficient energy.”

In the Traditional Medicinals survey, respondents shared that they know they’re stressed when they have trouble sleeping (42%), feel irritable (37%), fatigued (34%), have headaches (33%) or feel worried or paranoid (31%). Other respondents said their stress manifests through an inability to focus (30%), restlessness (29%), racing thoughts (27%), brain fog/mental unclarity (23%), or panic attacks (23%).

“With cold and flu season approaching, self-care and stress management are more important than ever,” said Kristel Corson, chief marketing officer at Traditional Medicinals. “Half of those surveyed believe that stress is often the main cause of them getting sick, and when asked what season is most stressful, the highest percentage of respondents (26%) said winter given seasonal changes and the holidays.”

To combat stress, 47% of respondents turn on some music, while another 39% look for comfort in their favourite TV shows and movies.

Food has its own calming effect, with nearly a fifth of respondents sharing that they have a snack (17%) or drink a cup of tea (14%) when they need to bring their stress down.

Seven in 10 agree that their overall mental health would be better if they were able to reduce their stress (71%), highlighting a need for self-care routines to be an important part of the stress solution.

However, incorporating self-care strategies into their daily life is a hurdle for one in seven Americans, leaving nearly half wishing for simple options that fit into their busy schedule (47%) as opposed to elaborate routines. When thinking about a “de-stressing regimen,” an equal percentage of respondents want long-term overall wellness and the ability to alleviate stress quickly (23% each).

“We believe in integrating ancient herbal wisdom with modern scientific advancements for a holistic approach to wellness,” said Corson. “Just 37% of survey respondents think that trendy stress relief options are successful, while nearly half felt confident in more traditional methods like yoga, meditation, or a calming tea.”

Given the conflict in the Middle East, the Russian/Ukraine war, inflation, high costs of goods, and in the US, back-to-back devasting hurricanes along with a contentious presidential election,

consumers’ stress will not likely abate anytime soon. Furthermore, high-caffeine product launches have not tempered while decaf sales remain sluggish, suggesting that the caffeine paradox, Barry highlighted in the April 2022 article will hold true for the foreseeable future.

Barry concluded the article, noting, “That leaves coffee and tea where they have always been — powerful tools in coping with the larger challenges of life. The underlying stressors of the modern world are beyond the power of the industry to solve. But manufacturers can offer a range of products to help alleviate possible burdens, from those who want as much caffeine as they can consume to those prioritising mindfulness and looking to cut back.”

Tea and coffee manufacturers have done just that. So go ahead and grab that 300+ caffeine RTD coffee, that iced ginseng wild apple mint tea, that lavender coffee latte, or chamomile lavender tea — whatever you fancy, as there’s really no choice.

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

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The NOLA (New Orleans, Louisiana) Coffee Festival launched in 2023 to offer small, independent coffee shop owners in the Gulf States (of which there are approximately 3500) an opportunity – and one they might not otherwise have – to advance their coffee and business operator knowledge and skillsets through educational lectures and to network with other coffee professionals. The first show enjoyed participation from 50 industry exhibitors and 2,000 attending coffee professionals and the 2024 show expanded upon that number, despite the impact of Hurricane Helene, which hit the Gulf Coast the day before the NCF began.

Although the NOLA Coffee Festival (NCF) targets smaller independent coffee shop owners/operators, many of the large Louisiana-based nationals and multinationals such as Community Coffee, Folgers (1850, Café Bustelo), PJ’s Coffee and Reilly Foods (French Market Coffee, New England Coffee, Luzianne Tea) all supported the show with booths. New England Coffee even exhibited and sampled its recently released compostable K-Cup coffee line. Locally-based green coffee importer Westfeldt Coffee, storage and warehousing company, Dupuy, the Port of New Orleans, and Community Coffee sponsored a series of educational posters in the hall.

NCF, however, is for the smaller players, of which there were many including Onyx Coffee, Evolve Coffee & Matcha, French Truck Coffee, Congregation Coffee, Orleans Coffee, Cherry Street Coffee, Cultiva Coffee Importers, Current Crop Roasting Shop, ICC Coffee Merchants, and Café de Mi Pueblo, a Honduras-based, female-owned and operated farm and exporter. There were also allied service companies exhibiting such as AW Vanguard, an accounting firm.

Following last year’s show, attendees were surveyed about how the NCF could improve, co-founder Jim Currie said two suggestions topped the feedback list:

• add more education around green coffee buying;
• add more education and access to artesian tea products.

Currie said that the 2024 NOLA event featured more than 60 hours of professional classroom presentations, as well as tea exhibitors and educational sessions. One tea exhibitor was female-owned and operated Tea Please, from Houston, Texas, which offered a selection of unique loose-leaf tea blends with fun names such as Peach Cobbler, Strawberry Shortcake, Vanilla Horchata, and Breathe EZ.

I moderated the new tea panel session, which was designed for coffee shop owners who wanted to improve their tea sales as well as tea shop owners. However, after taking a quick survey to see who exactly was in audience, surprisingly, an overwhelming number of attendees were not professionals, rather, they were tea enthusiasts who came to the show (NCF opens attendance to non-professionals on the second day) to simply learn more about tea. Given that, the panellists and I had to pivot our planned talking points and focus, and what resulted was a lively and engaging Q&A and conversation.

Currie that said the trade show plans to expand its tea focus next year, and although consumers will always be welcome, NOLA Coffee Festival will not become a ‘consumer festival’ — it is primarily a B2B show. The 2025 NCF will take place 3-4 October at the Pontchartrain Convention Center in Kenner, Louisiana, a suburb of New Orleans, located a short distance from downtown.

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

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The past few years have been challenging for the tea industry, and 2023/24 is no exception. Producers discussed the continuing impact of climate change on production (extreme heat in some areas versus excessive rains and flooding in others), and of course, the rising costs of production (labour, fertiliser, fuel, electricity, etc.) – up double and even triple percentages in some countries – which is making it nearly impossible for producers to generate viable incomes to support their families. And yet, despite the production challenges, there is still an overproduction of tea, which leads to lower quality tea flooding the market, a primary concern, which attendees agreed must be addressed.

Vijay Jagannath of McLeod Russell India said while production has fallen, exports in 2023 increased double digits over 2022. He shared that India made the decision to not produce tea in December to help reduce the amount of poor quality tea being brought into the market. NATC participants agreed this is a “bold step” and a strategic one that other producing-countries need to consider to halt the over-production of tea globally, which results in lower quality teas and in turn, lower prices.

Exports for China in 2023 slipped 2% from 2022, but it is still the second largest tea exporter behind Kenya, and remains the largest producer, with production (mainly green tea) hitting 3.3 million metric tonnes last year, a 5% increase over 2022 (global tea production is about 6.6 million metric tonnes). John Callaghan of Firsd Tea, noted that the reason for the decline in exporters is that “China is absorbing what it is producing” as consumption remains strong.

David Muriyuki of the Tea Board of Kenya concurred with other producers that tea production remains challenging but reported that consumption is increasing and exports are also expected to rise this year. Pakistan is Kenya’s main export market followed by countries such as Egypt, Russia, the United Arab Emirates and the UK. He happily added that Kenya is celebrating 100 years of tea production in 2024 so many festivities are being planned around the anniversary later this year.

Anil Cook of the Colombo Tea Traders Association said one of the many challenges Sri Lanka is facing – aside from the standard ones [rising costs production, labour, climate change] – is that everyone is switching to orthodox tea. However, he said production picked up in August almost on par with 2023, noting, “we are on our way back despite high cost of fertiliser.”

And while the herbal/botanicals market is booming, it’s also not without its challenges at production.

Richard Enticott of Meridian Trading Company said there are approximately 150 plants commonly used in herbals/botanicals. As with tea, climate change the biggest threat to the herbal/botanical industry.

He noted that in India, where many herbals/botanicals are sourced, the summers getting hotter in so labour costs increasing. In other countries, many botanicals are collected in the wild so finding people to pick them are difficult, he shared. Suitable land is also a challenge, and he added that there an increasing number of governments offering subsidies to plant other food, not herbals/botanicals. Compounding this, Enticott said “government regulations making it harder to produce herbals/botanicals.” He explained that herbals/botanicals consumption surged during Covid – up 25% – (primarily immune boosting), but demand dropped in Europe and US after Covid because ‘cupboards were filled’. The good news, Enticott shared, is that the demand for herbals/botanicals is stabilizing.

There are also challenges on the consuming/manufacturing side of tea, but that’s for another blog!

• 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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Sound familiar? It may if you are standing behind a Gen Z or younger millennial consumer in a coffee shop on any given day. New research by conducted by UK-based coffee roaster Lincoln & York finds that nearly 40% of those aged 18 to 34 are drinking more coffee out of home than in previous years and are also more likely to customise their drinks to suit their tastes.

Lincoln & York surveyed more than 1,000 consumers in the UK between the ages of 18 and 65+, and almost a quarter of the respondents said they are drinking more coffee today than they were five years ago — a trend predominantly driven by younger consumers. Approximately 40% of those aged 18-34 report increased out-of-home coffee consumption. In contrast, almost 45% of consumers aged 55+ are drinking less coffee away from home than they were previously.

Lincoln & York’s research further revealed that 75% of consumers in the 18 to 34 group ‘always’ or ‘occasionally’ opt for a flavoured syrup in their coffee. The report published to mark the company’s 30^th anniversary, also finds that consumers still favour traditional sweet flavours, with caramel ranking as the top syrup choice, followed by vanilla and then hazelnut (and then chocolate and cinnamon, respectively).

The research also found that whether through flavour preference or dietary requirements, 37% of those aged 18 to 34 now choose alternative milks, such as oat, almond, soy, or coconut, in their coffee. This preference for alternative milks also extends to iced coffee options with the younger age bracket twice as likely to choose alternative milk in their iced coffee than those aged 55+.

Additionally, according to the report, iced coffee ranks as the third favourite coffee option among younger consumers, ahead of the ever-popular flat white and cappuccino. Conversely, iced coffee is one of the least popular drinks amongst those aged 55+-with less than 3% stating this was their drink of choice away from home. [Among all survey participants, the most popular coffee by type is latte, cappuccino, flat white, filter coffee and black Americano.]

Lincoln & York’s research also found several significant changes in coffee preferences over its three decades in the industry.

When the business first started roasting coffee back in 1994, a dark roasted blend of Arabica and Robusta beans was the core offering. Today, changing consumer tastes mean the business sees a much bigger demand for 100% Arabica blends, and for medium-lighter roasts, which allow the individual flavours of the coffee to stand out.

Over the past decade specifically, Lincoln & York has also seen a major uptake in demand for speciality coffee. Almost half of those surveyed in the independent research have said they would ‘always’ or ‘occasionally’ pay more to try a special blend or single origin coffee, demonstrating this demand for new and increasingly higher quality coffee options in recent years.

“During our 30 years in the industry, we’ve experienced the rise of UK coffee culture and have played a key role as menus have evolved from white or black coffee to the ultra-customisable and even experimental coffee offerings we see today,” said Ian Bryson, managing director at Lincoln & York, adding, “with younger consumers more likely to customise their drink or opt for speciality coffee, this trend is set to continue.”

To meet these evolving needs, Bryson noted that “operators need to embrace customisation and signpost the options they have available for consumers to make their drink their own. Customisation also presents an opportunity for operators to demonstrate their expertise, for example by recommending a blend or roast profile to best suit a certain milk alternative.

From how often consumers go out for coffee to the drinks they are choosing and how they are choosing to drink them, it’s evident from the research that coffee drinking habits in the UK are evolving. Per Lincoln & York’s report, “younger consumers are going out more, and opting for iced coffees, alternative milks and flavoured syrups. Whereas older consumers are choosing to stay in and are opting for hot, milky coffees. These trends may indicate the future direction for the UK coffee market, with a growing emphasis on diversity and customisation in coffee offerings.”

Download Lincoln & York’s full consumer coffee trends report here.

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Global ingredient supplier Prinova surveyed over 1500 adult consumers in France, Germany, Italy, Spain, the UK and the US (conducted online in June 2024) and found that 72% percent said they were more likely to buy a food or beverage product if the packaging mentioned a health benefit. This number rose to 87% among those aged 18 to 24, and to 80% among those aged 25 to 34.

Overall, the claims most likely to influence purchasing decisions were low-sugar or sugar-free, weight management and energy support. The ingredients most likely to influence purchasing decisions were probiotics, vitamins, minerals, and fibre, while the concerns most likely to affect food and beverage purchases were gut health, healthy aging and fatigue.

Commenting on the findings, James Street, global marketing director at Prinova, said, “There’s a long-term trend towards more proactive approaches to wellbeing, with dietary changes a key element of consumers’ strategies for living better. As a result, they’re increasingly seeking out food and beverage products with health benefits. Our research demonstrates the value of well communicated health claims, especially in key areas like gut health and energy support. While they resonate powerfully across all demographics, our research provides new evidence that ‘zoomers’ [Gen Z] and millennials are particularly likely to focus on wellness when choosing between products.”

The research also reveals high levels of interest in personalised approaches to nutrition. For example, 79% of respondents believed that their particular genetic make-up affected their nutritional needs either slightly or significantly, with millennials and women particularly likely to agree. Furthermore, 41% were keen to try a test that monitored how particular foods affected their bodies, while 32% were interested in tracking their diet and nutrition through an app or questionnaire. Thirty percent of respondents overall, and 37% of those aged 25-34, were interested in wearable devices to monitor their blood sugar levels.

One unusual finding relates to ‘gamers’ — 66% of the consumers surveyed played video games at least once a week, and 61% of these said they used food or nutrition products to improve their gaming performance. The ingredients most associated with superior performance were caffeine, B vitamins and ginseng.

While this survey was conducted by an ingredients supplier (Prinova offers ingredients such as amino acids, plant proteins, sweeteners and vitamins), the findings further support the continuing trend of consumers actively making healthier F&B purchases. The post-Covid surge in the popularity of functional beverages has not abated, rather, it has sparked consumer spend and interest in such products, spurring the term (and trend), ‘the wellness economy.’ For example, matcha (as well as green tea) beverages in all varieties remain popular with consumption rising. Matcha has a high level of nutrients including antioxidants, L-theanine, and catechins. (T&CTJ’s newest matcha feature will appear in our October 2024 issue.) Functional coffees (high energy, improved focus, memory, gut and/or digestive health, etc., see https://www.teaandcoffee.net/feature/31946/functional-coffees-popularity-is-surging-but-the-true-benefits-remain-questionable/) also continue to surge in popularity and sales.

And as this healthy movement has grown, it has, by extension, expanded and brought forth wellness teas catered towards women and their specific health needs such as the different stages of women’s reproductive life, from menstruation, pregnancy, nursing, and menopause. (See Gendered teas: a marketing strategy or women’s reprieve? – Tea & Coffee Trade Journal (teaandcoffee.net) and/or Women’s wellness teas: a new category or marketing ploy? – Tea & Coffee Trade Journal (teaandcoffee.net)).

According to the research, post-pandemic, global consumers are being more proactive and taking a holistic approach to their wellbeing (per FMCG Gurus, Top Ten Trends for 2023). “With dietary changes a key part of their strategy for living both longer and better, they are increasingly seeking out products with health claims and advice to target their specific concerns.”

To download the full report, click here.

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In the UK, it is estimated that consumers use between 2.5 to 5 billion disposable paper cups per year, with few of those reported as being recycled. With 76% of people who purchase hot beverages to go relying on single-use equivalents, the research reveals that more work needs to be done in order to shift consumers away from their reliance on disposable hot beverage cups.

There is a huge opportunity for takeaway hot drinks outlets to adopt simple practices to reduce the significant single-use waste produced. In the US, for example, many cafés and coffee shops offer reusable cups for sale, a discount to customers that use one, or have a cost-effective returnable cup program. Furthermore, many outlets offer seasonal reusable cups to entice consumers to buy and use them, particularly in the fourth-quarter (e.g., Starbucks signature red reusable annual holiday cup) and Earth Day (bright green cups are ubiquitous).

In 2023, to help reduce single-use waste and alter attitudes towards disposable items, more than a dozen cafés in Stirling, Scotland offer customers the option of reusable cup for to-go drinks in return for a £1 deposit. The deposit could be reclaimed at any café participating in the Ditching Disposables Stirling scheme. (Click here for the full story.)

The flexibility of returnable and reusables allow outlets to establish a concept that best suits its operations. By purchasing a given number of returnable cups, organisations can either collect a small deposit from customers, which is then refunded on return of the cup, or implement a borrow charge if the cup is not returned within a set period. According to the survey, some programs are even simpler, by trusting customers to return the cups and ensure a circular economy of reusables within the outlet.

“This survey clearly shows the opportunity on offer to forward-thinking catering outlets as they look to reduce their reliance on single-use packaging,” said Dan Dicker, CEO and founder at Circular&Co. “There’s a clear appetite for more returnable cup schemes and reusables among those buying takeaway hot drinks regularly, which gives businesses the opportunity to make significant commercial and environmental savings, all while improving their appeal to the growing number of environmentally conscious customers.”

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

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The vast majority of the world’s 12.5 million coffee farms are run by smallholder farmers; in fact, almost three-fourths of the world’s coffee comes from small farms. Yet, if nothing is done to tackle the exacerbating issues faced by these farmers – such as climate change and low and unstable incomes – 50 percent of the regions suitable for coffee farming could disappear by 2050. As a result, farmers may resort to expanding into forested areas in their struggle to sustain and increase agricultural output, leading to further deforestation.

The Rainforest Alliance strongly believes that the European Union Deforestation Regulation (EUDR), due to come into effect on 30 December 2024, is an important step forward in the global fight against deforestation and forest degradation linked to the production of several high-risk commodities, including coffee.

However, as companies race towards EUDR compliance, we are seeing the very real risk of companies only meeting the minimum requirements and neglecting their responsibility to support farmers and address systemic poverty – a major contributor to deforestation. To address this, it is crucial that more value finds its way from companies to smallholders, who are vital to global food supply chains. This is why the role of certification has never been more important for the coffee sector.

Challenges faced by smallholder coffee farmers

In our work over the last 36 years, we’ve seen that smallholder farmers often lack the financial resources and technical expertise needed for better farm management, traceability, and accountability, such as GPS mapping. This further exacerbates the challenges they face, creating a barrier for producers who lack access to such tools.

EUDR compliance requires providing GPS points or polygons, which can overwhelm smallholder farmers operating in remote or rural areas with limited infrastructure. Without the required support, they are at a disadvantage compared to larger, more resourced competitors which also risks marginalising them from lucrative European markets.

The cumulative effect of these challenges underscores the need for support mechanisms, such as financial assistance, training programmes, and infrastructure development, to help smallholder farmers align with EUDR requirements and remain competitive in the global market.

Certifications: bridging regulatory requirements and sustainable agriculture

Certification acts as a bridge between regulatory demands and the transition towards more sustainable and regenerative agricultural practices. It provides a structured framework for coffee grown and harvested in ways that aim to protect forests and support local communities, through:

• Credibility and assurance: Recognised programmes (like Rainforest Alliance certification) provide a credible stamp, assuring brands, regulators and consumers that certified coffee aligns with a strict set of social, economic and environmental sustainability standards.
• Traceability: Certification processes often include robust traceability mechanisms, allowing companies to track their coffee’s journey from farm to cup. This traceability is crucial for EUDR compliance, ensuring products are deforestation-free.
• Sustainable agriculture: At the heart of certification is the promotion of sustainable farming practices beyond addressing deforestation, including climate resilience, improved livelihoods, biodiversity conservation, protection and advancement of human rights, business training, and compliance with local laws. This holistic approach aligns with the broader goals of the EUDR by addressing some of the root causes of deforestation.

For the coffee sector, embracing certification is not just a strategic move – it is an essential step towards ensuring that every cup of coffee contributes to positive change for both farmers and nature.

• Miguel Gamboa is coffee sector lead at the Rainforest Alliance and is based in Guatemala. He trained as an industrial engineer with Masters in Reengineering and International Trade. Gamboa started his professional career working in a coffee exporting company. Twenty years ago, he started working with the UTZ certification programme, learning about the different realities of coffee production throughout Latin America. After the merger of UTZ and the Rainforest Alliance, Gamboa was appointed coffee representative manager for Latin America, and assumed his current position in September 2022. With 37 years of experience in tackling deforestation in global supply chains, the Rainforest Alliance’s systems can help certified coffee supply chain partners take steps towards complying with EUDR requirements. RA is also developing a deforestation risk assessment offering for non-certified supply chains.

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The study, FMCG flexible packaging: accelerating the move from plastic to paper, based on research conducted by PureProfile this past March with 100 UK packaging experts responsible for packaging R&D, technology, design and sustainability for FMCG brands reveals that the majority (92%) plan to stop using plastic in their consumer packaging altogether. The report, which launched at the Rethinking Materials Innovation and Investment Summit in London earlier this year, shows that paper and paperboard are the replacement materials of choice, followed by new polymers, bioplastics, and multi-materials.

According to the research, the shift to paper packaging comes ahead of improving the energy efficiency of operations, biodiversity and reducing the carbon footprint of logistics and reducing water use and waste. Reducing or abolishing plastic use altogether ranked last.

Most respondents said that there is a significant threat to their business if the environmental performance of the packaging used is not improved, with two thirds describing it as high and 31% said it was ‘average’. About 3% said the threat was low. Nearly three quarters (70%) of respondents said that their business faced the risk of reputational damage if they did not improve the environmental performance of their packaging, 67% said they could miss ESG and sustainability targets, and 60% said they would see a drop in market share to competitors.

The research highlighted the risks FMCG brands businesses face if they do not move away from plastic to sustainable materials in their consumer packaging, ranked in order of importance:

The majority (87%) of respondents want the switch to alternative materials to replace conventional plastics to take place faster. However, despite the commitment to move away from plastic, the timeframe for transition is still considerable, with 27% of packaging experts expecting this to happen by 2027, 35% by 2028 and 28% by 2029. Just under one third (30%) described the move to new packaging materials in their business as too slow, 58% labelled it as ‘moderate’ and only 11% said it was fast.

The study finds that currently, the main barriers to using more environmentally friendly options are the higher cost of alternative packaging, which was cited by 53% of respondents, the availability of alternative materials (50%) and ensuring the functionality and product protection remains the same (46%).

When asked what key drivers would help the FMCG sector speed up new material development and implementation, the research showed that 70% of respondents believed that more ambitious recycling targets were key, 62% wanted to see increased investment in new materials, and 54% said greater collaboration to accelerate R&D was needed. Half said that an industry-wide commitment to move away from conventional plastic was necessary, while a further 47% cited tighter environmental regulation through taxation of materials with poor environmental performance was important.

Commenting on the results, Dr John Williams, chief technical officer at Aquapak, said, “It is really encouraging to see that moving to sustainable packaging materials such as paper is the top priority for FMCG brands and a board-level decision when it comes to improving their environmental credentials and mitigating reputational and financial risks of not doing so. Abolishing the wrong sort of plastic use is important and is a long-term target, the change must be balanced as they assess alternative materials and wait for greater clarity around targets and regulation.”

To download the report, click here.

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

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Although we are seeing declining interest rates in the US, Europe and the UK, there are still concerns around the macroeconomic backdrop as inflationary pressures remain and will continue to pose near-term challenges (even plain grocery store coffee beans cost 22% more than three years ago). Hence, consumers are still cautious with their spending, cutting back on foodservice purchases — and even reducing spend on their beloved java from their favourite coffee shops. Declining sales including same-store sales – a result of lower foot traffic – (and a sagging share price) is what led to Starbucks CEO Laxman Narasimhan being forced to step down (Brian Niccol, CEO of Chipotle was named as his successor) as the multinational coffee chain strategizes to turn things around.

Despite the economic uncertainties, consumers – both older and younger consumers – still enjoy purchasing coffee from their favourite coffee shops (some 62% of millennials will still spend up to $7 per day on coffee) because they feel it is a small indulgence, but maybe now not as frequently. Many consumers are no longer purchasing these ‘treats’ daily in efforts to control their spending.

CashNetUSA recently released study identifying the cheapest areas across the United States to buy a cup of coffee. It found the average price of a cup of coffee in local indie cafés and chains and ranked them by state and city and also compared these prices to the average local wage to determine affordability.

Quite surprisingly, Maine has the cheapest coffee while South Dakota – not New York or California – has the most expensive. CashNetUSA revealed that a cup of coffee in South Dakota costs USD $3.79, 45.76% more than in Maine ($2.60), the cheapest state. South Dakota takes over from Washington, which was the most expensive state according to its 2021 report. The cost of coffee in Washington has actually fallen on average. South Dakota’s has jumped by 63.36% from $2.32. Maine is one of 12 states where the average cup costs under $3. These states are mostly towards the Midwest or South of the country.

The study found that at an average of $2.13 per cup, Irving in Texas has the cheapest coffee of any US city. This is also $0.91 cheaper than the average cup across Texas.

The state of Oregon has the fifth-highest average coffee price, at $3.51. Two Oregon cities are the only ones in the US to offer the average coffee cup at a price north of four dollars: Eugene ($4.39) and Salem ($4.16). According to CashNetUSA, these are also two of the least affordable cities when comparing coffee prices with local wages.

Mississippi has the least affordable coffee compared to income. In Mississippi, a cup of coffee costs nearly one-fifth (18.28%) of the average hourly wage. The study found that this is the least affordable coffee of any state, although the average cup in Mississippi is only the 11^th most expensive ($3.30). Massachusetts (where a cup of coffee costs 10.31% of the average hourly wage) has the most affordable average coffee, closely followed by Washington (10.85%).

Olympia, WA, has the most affordable coffee; Eugene, OR, has the least — CashNetUSA reported that it costs just 8.11% of the average hourly wage in Olympia, Washington, to pay for the average cup of coffee. Olympia is followed by three California cities: Oakland (8.33%), San Francisco (8.75%) and San Jose (8.76%). A fourth – Torrance (9.51%) – also makes the top ten most affordable cities for coffee. Eugene, Oregon, is where a cup of coffee costs the biggest chunk of the local average hourly wage (19.59

While national and multinational coffee chains have launched many more promotional offerings this year, particularly this spring and summer, to date, I do not believe any have dropped their prices. But as they battle for consumers’ prized discretionary income, I wonder if they will begin engaging in QSR-like price wars?

For the full CashNetUSA report, click here.

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

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Seated on deck chairs around the back of the lively illy stand, to the backdrop of the loud music and bustling festival – and plied by illy’s zero waste soft serve ice cream and espresso martinis – I quizzed Franco on the importance and significance of regenerative agriculture and its certification.

Franco explained that illy is the first brand with the complete certification, meaning that all the steps throughout the company’s supply chain are audited and certified. Not only is illy’s Brasile Arabica Selection Coffee Regenagri certified, but so is the company itself. Therefore, any other coffee illy sells that comes from Regnagri certified farms, via a certified producer, is also covered.

When certifying farms, Regenagri looks at the full set of criteria, whether that be soil health; reduction in use of water and energy; biodiversity; use of fertilisers; intercropping; or conservation efforts. They are all measured and assessed and scored against, said Franco. Farms or businesses need a Regenagri score of 65 per cent to achieve the certification. “We look at the whole picture. Consider it like a puzzle, where each of the components has weight, and each of the components is measured and verified for improvement, and everything together gives the final result of the Regenagri certification,” said Franco. He added that, crucially, the programme requires improvement every year: “you cannot be certified Regenagri and let things stay,” he said, and this is what drives the impact of the certification.

This improvement is crucial and needs to be tangible. If a company does not improve, Regenagri requires it to submit an improvement plan to shape their strategy. Franco explains that they don’t want to immediately cut companies out that haven’t improved, because farming is more complicated than that. If improvement is not seen in the first year, they have to submit an improvement plan, which is verified the following year. If they are still not able to achieve results, they cannot stay in the programme and remain Regenagri certified. “I think it is a fair balance between helping them and giving them some urgency as well,” commented Marco.

And there is urgency for these changes, especially in coffee. “There is strong power from both sides [consumer and company] to engage with the farmers and with the suppliers, and to reward them for their efforts to do better farming, and then also the power towards consumers to convey the right message,” said Franco. He added that consumers are getting increasingly aware and knowledgeable about sustainable farming and the environment, but they need to be much more informed about regenerative farming. Brands that take on the Regenagri certification and display it on their products are part of this consumer education.

Each company that is working towards or has achieved a Regenagri certification will have entirely context specific plans. What this means, Franco explained, is that each of the criteria is assessed based on the specific context, which region, which climatic area, the type of soil where they are farming. Different areas will have different needs and priorities and the Regenagri plan can be adjusted accordingly.

I then asked about whether the new EU Deforestation Regulations (EUDR) is expected to impact Regenagri’s work in any way, or if it’s being welcomed with open arms. Franco responded that “the eligibility criteria of the Regenagri standard for farms has always included the checks to see if the applicant has been involved in deforestation or conservation; it’s been there since the beginning …, so basically the EUDR is embedded into the original standard.”

While regenerative agriculture practices are recommended to all kinds of farming, Franco explained that there is special potential in coffee. “In this case in Brazil, the reductions of carbon footprint for coffee is actually nearly double what is achieved in other arable crops.” He added that “in Brazil, I think there are approximately 50,000 hectares of farms that are certified. If you put them all together, in one year they have essentially reduced [the equivalent of] ten per cent of the carbon footprint of London.” When companies first start on their regenerative agriculture journey, there is huge room for improvement, then as they improve “the curve flattens a bit,” but the impact is great.

It is all moving in the right direction, companies and farms just need to be educated and motivated to make the change. When I asked whether Franco thought that governments should be doing more to incentivise and perhaps subsidise regenerative agriculture transitions, Franco commented, “I’m not always in favour of subsidising something; I’m more of a believer of letting the system create value by itself. Subsidising usually means creating a bubble,” he said, emphasising it is more important for a true economic system to be developed to support the regenerative supply chain, where value and impact is recognised.

Hopefully, going forward, we will see many more companies being certified by Regenagri, especially in coffee and tea where there is huge potential, as well as already existing practices that champion regenerative agriculture. Steps like this by the big coffee and tea organisations are essential at this stage to safeguard our industry.

• Kathryn Brand, associate editor, Tea & Coffee Trade Journal.
  Keep in touch via email: kathryn@bellpublishing.com Twitter: @TCTradeJournal or LinkedIn: Tea & Coffee Trade Journal

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The EUDR aims to cut greenhouse gas emissions and help limit biodiversity loss by influencing global action on climate change targeting commodities linked to deforestation. The EUDR will come into force from December 2024 to June 2025 and goes much further than previous regulation on this issue by outright banning materials linked to deforestation and applying to the entire value chain. The EUDR covers products made or derived from cattle, oil palm, rubber, soya, wood, cocoa, and coffee, if they are sold in the EU. The regulation must be followed by any company involved in the value chain of these commodities at any point, whether inside the EU or not.

Under this regulation, companies must prove that none of their product’s components, ingredients, or production processes have contributed to deforestation. The onus will be on companies to prove that not only their product, but their product’s value chain is deforestation-free.

Under the EUDR companies that trade in these commodities and their derived products in the EU market or that export them from the EU will need to follow mandatory due diligence reporting of the goods and supply chains they wish to trade in and demonstrate that their products are not linked to deforestation, or to forest degradation through, such as the expansion of agricultural land. The regulation will require companies and industries in countries that supply the EU to transition to a sustainable, deforestation-free supply chain and legal agricultural value chain if they wish to trade in the EU.

Agribusiness consultants at GlobalData, a data and analytics company, estimate that EUDR compliance premiums for companies operating in the supply chain for just two of the targeted commodities, oil palm products and their derivatives (such as crude palm oil (CPO) and palm kernel oil (KPO)), and rubber could be in excess of $1.5 billion* alone. GlobalData analysts believe that while companies operating in these supply chains will be able to absorb some of the costs themselves a good proportion of these compliance premiums are likely to be passed onto EU consumers in the form of food and drinks and product price increases.

GlobalData’s new study, EU Sustainability Regulations: How the EUDR and other Sustainability Regulations will impact consumer markets, explores some of the EUs key sustainability regulations focusing on the aims of the EUDR and the compliance challenges ahead for farmers, companies, and manufacturers trading in the commodities targeted by the regulation. The study also looks at what the EUDR could mean for the global supply chain of the target commodities, the potential impact on consumer markets and pricing within the EU and how the EUDR could affect the EU’s future competitiveness with China.

Food and drink categories likely to be most affected include coffee, chocolate, soy-based meat alternatives, and products containing palm oil, in addition to personal care products such as shampoo. The GlobalData study finds that operational costs for coffee suppliers will increase and the risk of sanctions for importers will become real. Many coffee suppliers save money by sourcing from multiple growers. This will become more expensive under the EUDR as each one will require GPS-based tracking and traceability protocols.

According to the study, the additional administration required by producers of coffee, cocoa, soya, and other products covered in the EUDR will add significant costs to smallholder farmers. Furthermore, the study reveals that governments in producer countries will likely have to step in to support them, noting that “this is already happening for cocoa farmers in West Africa and coffee farmers in South-East Asia. The EUDR will specifically impact agricultural practices in places like South America, sub-Saharan Africa, and South-East Asia as the industry looks to avoid its impact being classed as ‘deforestation’ by the EU. This will include more ‘agroforestry’- planting crops amongst other plants and trees.”

“The aims of the EUDR are understandable and cutting greenhouse gas emissions and protecting biodiversity is essential. However, there could be some disruption ahead,” said Fred Diamond, senior food & beverages consultant and analyst at GlobalData. “The extra demands of the EUDR could lead some commodity suppliers in what the EU terms ‘third countries’ to move away from the EU and increase trade with countries that impose fewer regulatory requirements such as China.”

Diamond further noted that the gap between big and small companies could get wider as larger companies are more able to shoulder the additional regulatory burden. “The exact impact on consumers will depend on a variety of factors, including how companies choose to respond to the regulation, the extent to which the regulation is enforced, and how much assistance EU member states are willing to give to supplier countries to help them align with the new rules. However, with recent news reports confirming that the world’s top climate scientists expect global heating to go well beyond the current 1.5C target, sustainability regulation associated with cutting greenhouse gas emissions, such as the EUDR which targets deforestation, remains an urgent priority for the planet,” he said.

To read GlobalData Food & Beverages Consultant’s new study EU Sustainability Regulations: How the EUDR and other Sustainability Regulations will impact consumer markets in full, click here.

*The $1.5 billion EUDR compliance premium figure is based on GlobalData Agribusiness consultants understanding of current commodity pricing and the likely impact of increased costs of EUDR compliance on the supply chain of these commodities. However, the company recognises that EUDR compliant commodity premiums are still being agreed confidentially between buyers and sellers so some uncertainty remains over the final numbers.

• 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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A new survey reveals that the best way to encourage employees to work from the office rather than from home is to offer free beverages.

Although the survey was conducted OnePoll on behalf of multi-beverage system manufacturer Flavia, which provides machines to many offices, it does yield some interesting and valuable results for businesses. For example, the average person spends nearly 50 hours a year purchasing beverages at a café during the workday.

According to the 2023 survey of 2,000-plus employees who work onsite or in an office, it takes about 16 minutes to leave one’s desk, buy a drink and return, but with three such trips a week, employees end up losing an entire work week per year (16.4 minutes per café visit x 3.42 visits to the café per week = 56.088 minutes a week, x 52 weeks in a year = 2,916.576 minutes or 48.61 hours a year). This can impact productivity considerably, whether the company is large, medium or small-sized (in terms of the number of employees.

The survey found that to jumpstart their workday, people usually get organised (60%), sip their favourite beverage (59%) and check their emails (55%). Their first drink of the day? A hot cup of coffee (66%), followed by iced coffee (47%), water (45%), or tea (42%).

The survey also shows that there may be a link between drink preference and productivity. Approximately 77% of coffee drinkers need two or more cups of coffee to feel productive on a workday, with nearly a quarter (24%) noting Mondays were the day of the week they needed the most coffee.

Six in 10 (60%) turn to a hot cup of coffee to improve their mood at work, as well. Nearly two-thirds (64%) “always” or “often” vary the type of drink they consume as the hours go by. Aside from hot coffee (77%), employees also drink water (70%), iced coffee (64%), tea (62%), juice (55%) and flavoured water (51%) while they work, among other beverages.

“Over a third (37%) of those surveyed would like the ability to brew hot and cold beverages and more than a quarter (26%) want to be able to brew different kinds of beverages at work,” said Camille Vareille, vice president, head of marketing Americas, Lavazza Group, which owns Flavia, in a statement.

The survey revealed that nearly 87% of respondents were going into the office between two to three days a week. “Over eight in 10 employees said having free beverages as a workplace perk would make them feel valued, and offering free beverages was the most requested perk to encourage employees to work from an office,” Vareielle added. “Investing in an array of beverages on-site can not only save employees time and money but also help with bringing them back into the office.”

According to the survey, the leading “perks” to encourage employees to work from their onsite office are:

• Free beverages — 46%
• Required breaks — 45%
• Free food — 45%
• On-site gym — 43%
• Office lounge/social area — 42%
• Ability to bring pets to work — 36%
• Ability to bring kid to work — 29%
• On-site games — 22%
• In-person employee clubs — 14%

The fact that the survey may seem a bit self-serving and was conducted only in the United States, doesn’t negate the information or the value to businesses globally (replace ‘coffee break’ with ‘smoke break’, which happens multiple times per day, every day – based on a five-day work week – and the impact to productivity is even greater). And looking at the list of perks noted by the poll participants, installing a multi-beverage system (formerly ‘office coffee system’) may be the most cost-effective option (it’s certainly less than building a gym!).

• 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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