The Camellia sinensis plant, from which matcha originates, was first cultivated for use in tea in China in the 3rd century BCE, but it wasn’t until the 7th to 10th centuries that the practice of consuming the leaves in the form of matcha was first documented. Matcha, unlike the infusion process of its black and green tea sisters, is made by finely grinding the tea leaves into a powder that is mixed with hot water and consumed in its entirety. It is thought that a Japanese Buddhist monk brought matcha to Japan
sometime around the 12th century, where it was considered highly valuable and coveted and therefore necessitated a careful preparation method, and so its consumption and preparation developed into a spiritual practice by the 16th century, the whisking of powdered green tea into hot water a meditative ritual. Since matcha began as a rare and premium product, the ceremony of its preparation became
entrenched in its consumption. In modern day Japan, matcha tea ceremonies are still widely practiced, and while it is no longer reserved for the elite or ‘ruling class’, it is still deeply ritualistic with specific implements such as the bowl and bamboo whisk, and even particular whisking motions or patterns.
Meanwhile, elsewhere in Japan, the matcha latte has become extremely popular, commercialised
and readily available, and co-existing alongside its traditional consumption in the country.

Matcha Migrates West

Western countries have long since been discovering and adopting Japanese culture and cuisine, and matcha is no different, with it seeing a marked rise, particularly in the US. Future Market Insights (FMI) reports that the matcha market in 2023 was worth USD $2.7 billion and is expected to reach $7.1 billion by 2033 — a CAGR of 10.2 percent. FMI attributes this growth to the interest in its health benefits, use in skincare and culinary applications such as confectionery. The latter of which is driving
its popularity in the Indian market, according to Fact MR , while the health benefits are driving the market in the US.

Japanese tea company, Ippodo, was founded in 1717, “when the [matcha] tea ceremony had begun to be enjoyed by other elites like warrior families and high-class townsfolk,” said Tomoko Honda, head of global operations, Ippodo. In 2001,Ippodo began selling its matcha overseas as the number of international visitors to its Kyoto shop had begun to increase.

The growing interest in matcha was also noted by Germany-based tea supplier, Wollenhaupt, which had previously only been including matcha in its catalogue as a ‘marginal phenomenon’, said Marco Sinram, head of tea trading and sustainability, Wollenhaupt, but recognised that demand was developing ‘dynamically’, and therefore now offer three different types of matcha to its customers.

“Ten years ago, very few people had heard of matcha and now the market is absolutely exploding. So many new matcha brands have popped up in the last couple of years and you can find matcha on menus in more cafés and restaurants. The UK is now following in the steps of places like New York and Los Angeles with matcha bars popping up across the country,” said Katherine Swift, founder and CEO
of OMGTea, a UK-based specialist matcha green tea company.

One such place is Blank Street coffee chain, which began in Brooklyn, New York, in August 2020, and now has locations across New York; Boston, Massachusetts; Washington, DC; and in 2022 debuted in London. While Blank Street serves an array of café and coffee shop offerings, some of its most distinguishable and popular products are its matcha beverages.

When Blank Street launched in London in Summer 2022 ,matcha wasn’t a widely accessible drink. There were limited places to get matcha on the high street, but most of those places offered either expensive or low-quality matcha. We wanted to disrupt the market by launching exciting flavour combinations that made a niche category into one that is more fun and accessible for everyone,” explained Ignacio Llado, UK managing director at Blank Street. “In Spring of 2023 we launched our Blueberry Matcha, joining the classic Matcha Latte on our menu. This drink was the first of its kind in London, and […] immediately caused a huge buzz, with TikTok and word of mouth helping it to quickly climb to become a Blank Street best seller.”

Matcha’s vibrant green colour affords it a social-media-ready aesthetic for consumers, fuelling its popularity among influencers and the younger generation. Blank Street has recognised this in its marketing strategy, making use of clear cups and contrasting colours to bring its matcha drinks to life.

While many of the high-street iterations of matcha lattes and frappés may be heavy on sugar or cream, matcha itself is considered a remarkable health food, with this being another, perhaps the largest, draw to the product for consumers. “Matcha aligns well with overall wellness trends and appeals to those looking for more specific benefits such as a healthier alternative to coffee or energy drinks, detox,
increased antioxidant intake, weight management, etc,” said Swift.

A Healthy Shade of Green

The way in which the Camellia sinensis plant is grown in order to produce matcha, allows for the accumulation of catechins, (−)-epigallocatechin-3 -gallate (EGCG) in particular is most abundant in matcha. It is these catechins that provide high antioxidant properties and give matcha its reputation as a health drink. It has been found that “regular consumption of matcha may have a positive effect on both physical and mental health,” according to the report Health Benefits and Chemical Composition of Matcha and Green Tea: A Review by Joanna Kochman, Karolina Jakubczyk, Justyna Antoniewicz, Honorata Mruk, and Katarzyna Janda, published on PubMed Central.

It is the health benefits of these antioxidants found in matcha that encouraged Swift to establish OMGTea. She began researching its benefits after her mother was diagnosed with breast cancer, then both she and her mother began routinely drinking matcha green tea. Five years later, Swift launched OMGTea, and a year after that she founded The Healthy Life Foundation, a charity that funds research into age-related diseases, including cancer.

Swift emphasised, however, that the quality of the matcha consumed is essential to reaping its health
benefits. While matcha is generally considered a premium product, there are more affordable blends
available; these are the kind often used as ingredients in confectionery or desserts where the matcha taste need not be so refined. Matcha can be tested for its quality by examining the colour and texture, as well as the taste. She explained that they quality check their matcha regularly using the ‘finger/stroke test’, whereby matcha powder is placed on a white piece of paper and, using a finger, is pulled across the page to observe its colour and texture alongside others. The brighter the green colour, the higher quality the matcha, also the particle size of high-grade matcha ought to be between five and ten microns, as fine as baby powder, said Swift.

This essential colour and texture gauge all comes from the farming process, which has specific methods to ensure these attributes. “For around three weeks before harvest, shades are put over the tea fields to block out the sunlight, which increases the amount of flavourful, umami-rich components in the tea leaves. After the leaves are harvested in the beginning of May, the leaves are steamed, cooled and dried, baked, and sorted. […] The leaves are then ground with stone mills to produce the fine powder called matcha,” explained Honda. Shading the tea leaves is a traditional characteristic of matcha production, and is a method invented centuries ago in Kyoto, Uji, Japan, and is now widespread, she noted.

It is the shading that boosts the leaves nutrient levels, causing an overproduction of chlorophyll, contributing to its bright green colour, added Swift. The stone mills are also what produce the silky, fine texture of quality matcha, whereas lower grades are cut and blended using steel, which, she noted, reduces the flavour and bio availability of the matcha’s nutrients.

The location where the matcha is grown is also crucial to its quality and flavour. There are specific areas that are known for their matcha production, such Uji, Japan, “one of the most renowned regions for matcha growing in the world,” said Llado, and it is around this area that Wollenhaupt, Blank Street and Ippodo source their matcha. The region of Kagoshima, Japan, is also particularly suited to matcha production, benefitting from its volcanic soil and climate, commented Swift, and is where OMGTea sources its products.

Sustaining Production

With such specific regions and fastidious productions techniques, are matcha’s producers prepared to meet the surging global demand from the product, not just domestically in Japan, but as far away as the US and UK? Sinram explained that, while Wollenhaupt believes that the highest and most authentic quality of matcha can be found only in Japan, it is possible to source it from other producing countries,
depending on the requirements of the customer.

Meanwhile, Swift noted that in the Kagoshima region, practices are being undertaken to increase production in order to meet demand, “Farmers in Kagoshima have been adopting advanced agricultural techniques to enhance matcha. These innovations help increase yield and improve the quality of the tea leaves. Some tea farms are converting or expanding their fields specifically for the cultivation of tencha, the raw material used to make matcha. Local government initiatives and support for the tea industry have also played a role in encouraging the growth of matcha production in the region.”

Honda added that as global climates change, areas that are suitable for production are shifting and will continue to shift. “Areas where tea can be grown will likely change or expand as well, whether inside or outside of Japan. We are not sure what the future will bring, but it is key to plan for and adapt to changes.”

This growth in demand has created a broad market for matcha with varying requirements and uses. Where it has historically and traditionally been an exceptionally premium and ceremony-bound product, it is now a commercialised and accessible product for many consumers, posing the question of how far it can be removed from its origins and cultural significance? “While it’s great that matcha is going more mainstream, we want to make sure that it still feels special and comes with the holistic experience that has been central to Blank Street since we first launched,” noted Llado.

So where perhaps the ceremonial aspect of matcha may no longer be a necessity, it still can add something to the experience of consumers, if they engage with it, encouraging more mindful consumption, said Swift.

Honda added that, while consumers may not know of its ceremonial or spiritual origins, “during the tea ceremony and in Japanese society in general, when drinking matcha it is considered important to feel gratitude for the person who made the matcha for you and for those who produced it. We think it would be wonderful if that sentiment grew alongside the increasing popularity of matcha worldwide.” Therefore, its marketing is crucial, to not only offer consumers a brightly coloured health drink, but also a moment of reflection on both the beverage and the process that went into every sip.

• Kathryn Brand is an associate editor with T&CTJ, while still writing for several of Bell’s
  other magazines. She joined Bell Publishing at the beginning of 2022 after graduating from
  the University of East Anglia with a degree in English Literature and Creative Writing.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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All tea leaves are green on the bush, except for rare purple and white leaf varieties. It is the tea-manufacturing process that divides the made teas into the two main families: the black teas, which are fully oxidised and the green teas that preserve their green colour through a heat shock, which halts further enzymatic development, be it with dry heat through panning/frying or by steaming.

These two different ways of processing are neatly divided out between the Asia-based tea-producing countries, where green tea is the ancestral cup, and the former colonial tea growing areas, where black teas are commercially produced for export to the European consumer markets. The cup profiles are contrasting and completely different, which can make it truly uncomfortable to switch from black tea to green tea, unless there are powerful incentives such as highly favourable health benefit announcements or the expectation of discovering highly attractive new flavours and tastes.

There are many traditional local varieties of green teas in China, the world’s biggest green tea exporter with over 300,000 metric tonnes in 2019; followed by Vietnam with green tea exports around 96,000mt, and Japan around 76,000mt. Japanese green teas are usually made with the steaming process, which makes the leaves needle shaped and the premium quality mainly goes to export. Most green teas are marketed as loose leaf and are rarely blended and the CTC process does not apply to them.

The catechin buzz

When green teas started to tip toe into the European markets, it was under the premises of tea and health research, carefully monitored by Unilever for the start, out of their Tea Research Center in Colworth, England, with its carefully tendered tea bushes, well shielded against Britain’s cold winters.

Green tea from Paris, France-based premium tea purveyor, Palais des Thes. Image: Barbara Dufrene

In these early times, mainstream green tea, mostly gunpowder from China, was introduced with messages that made it a remedy cup against aging, strokes and cardiovascular disease, promoting the antioxidant power of the green tea polyphenols, i.e., the various catechins. Doctors were contacted and informed about the benefits of green tea and many then advised their senior patients to drink green tea instead of coffee. This very rapidly rang alarm bells for the coffee companies and generated an important campaign of funding scientific academic research, with the purpose to underlining the health effects of both cups, by elaborating research on the physiological effects of the tea and coffee polyphenols. These compounds all belong to the same big family of natural plant chemicals, but they have many different names and structures etc.

With green tea on the verge of becoming a medicinal cup, as many swallowed the astringent drink for better health, but without any pleasure, new input was required. At that time the European labelling provisions were drafted and hence ISO methods were being developed to allow the measuring of the various cup’s catechin contents, to attract more consumer interest and foster consumption. However, the finalised EU health claim regulations did not include any such health benefit claims for tea, neither green nor black, considering that the science was not sufficiently sustained, which was a blow to mainstream green teas. A new strategy was the switch to flavoured green teas, blending them with attractive plants, such as mint and lemon, to appeal to new target groups, namely younger consumers who had no previous black tea experience and were keen to discover these easy to brew, flavourful, untraditional novelty cups.

Exotic premium terroir green teas

Following the promotion of green tea as a healthy beverage to attract European tea drinkers was the introduction of premium green teas. First came China’s famous Longjing tea, with its lovely flat pan-fried leaf and nutty buttery flavour notes. Originating from Zhejiang’s beautiful and famous West Lake area, the high yield cultivar Longjing number 43 had been fostered in the heart of China’s Tea Science and Research capital, Hangzhou, with its mythical origin story carefully spinning all over the Western tea drinking world.

Matcha tea at a tea salon in Paris. Image: Barbara Dufrene

The West Lake Longjing green tea became the first tea ever to be awarded an EU Protected Geographical Indication in 2011, followed by the same distinction given to the black teas from India’s 78 Darjeeling Tea Estates. This carefully groomed process has made green teas more conspicuous by giving them status, which attracted growing consumer interest for this elegant, tasty, expensive, and healthy premium origin cup.

It was also clear in the early years of the new millennium that consumers needed to be informed and educated, to better understand and fully appreciate the new green origin teas. Tea schools and tea training institutions sprang up, with the founding of the US Specialty Tea Institute for training the American tea professionals in 2002 and the Ecoledu Thédu Palais de Théin 1999 in Paris, France, for educating clients and consumers, as the pioneers and fore runners.

London-based Jing Tea Baojing Gold green tea. Image: Jing Tea

These developments have paved the way, not only for more premium green teas from China, but also for the premium green teas from the neighbouring producing countries, namely Japan and South Korea, with their different taste profiles, attractive stories and hefty prices. They are all riding on the wave of a recently emerged demand, issued by a target group of well educated, widely travelled and affluent tea lovers who are happy to invest in fine green teas and their brewing accessories for their own pleasure and joyful relaxation.

The new premium green teas 

China’s fine green teas are mostly rather robust and hence easy to brew, with freshly boiled water poured over the leaves, extracting the flavours through several infusions, with a great preference for the early spring picks. These cups offer a rich range of pleasant, sweet, buttery and chestnut/nutty fragrance notes, which are familiar to the Western palates. The leaf is always beautiful, after unfolding with re-hydration.

Various green teas and their resulting cups. Image: Barbara Dufrene

Following in the footsteps of China, the Japanese Ministry of Agriculture has launched an intense promotion of Japanese premium teas, which also offer longstanding cultural traditions but have a completely different taste profile and more complex brewing requirements. Attracting a growing fringe of knowledgeable consumers who are keen to explore novelty cups, these generally small volume and expensive premium cups also build on the Zen attitude and the high theanine content of the shade grown harvests, which are made into matcha, gyokuro and some premium sencha.

South Korea has picked up the thread and has also started to promote fine green teas in Europe, originating mainly from the volcanic island of Jeju, south of the peninsula. Most of these highly fragrant cups are rare, precious and expensive, but sought after for moments of relaxing and delight, individually or shared with company who also care and fully appreciate such treasured leaves.

Increased availability and further potential

Good mainstream green teas are available on all supermarket shelves, either as genuine leaf or in tea bags, there is also a wide choice of flavoured green teas provided by multinational brands like Lipton, Tetley’s and Twining’s. The premium operators and the small retailers all carry green teas from prestigious origins in their portfolios. There is a growing focus on Japanese green teas, which are being heavily promoted in France, Germany, Italy and in the UK.

Image: Clipper Tea

Statistics from the International Tea Committee’s 2021 Annual Statistics Bulletin show however, that the import share of green tea varies widely, with 3.6 per cent in the UK, 7 per cent in Ireland and 10.4 per cent in Russia – the three big markets where black tea remains the king of the cups – 12 per cent in the Netherlands,14 per cent in Poland, 24 per cent in Germany, 26 per cent in Italy and 57 per cent in France. Adding up the total tea imports of these eight markets, the overall share of green tea imports amount to 12.6 per cent, compared to 8.5 per cent in 2007, which is a moderate growth for a 17-year period.

Supply is mainly sourced from China, followed by Indonesia and Vietnam, with small volumes of premium teas imported from Japan and Korea. China’s premium green teas are hardly available for export, all gobbled up by the affluent domestic consumers who have even recently paid USD $730 for a 500g pre-Qingming Westlake Longjing lot, as reported by the China Tea Marketing Association in Beijing.

There remains a huge potential for expanding green tea consumption further in Europe with the younger generations, who have no previous black tea-drinking experience and are keen on Eastern traditions such as the Zen-attitude and mindfulness, whilst the light colour and taste of the cup continues to attract health-oriented and more senior tea lovers. The pandemic has also increased the focus on stress reduction, healthy hydration and well-being, which is expected to increase the demand for green cups.

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

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Overall growth of the bottled tea market can be attributed to:

• Increasing appetite for specialty teas and their easier availability
• Health conscious consumer’s preference for healthful tea beverages
• Younger consumers’ developing palate for different RTD bottled tea flavours
• Accessibility of bottled tea across various sales channels

“The bottled tea marketplace is heavily impacted by evolving consumer sentiments wherein vendor revenues dwindled half a decade ago on the back of a contagious low- or no-sugar beverage trend. As manufacturers ramped up the production of no-sugar tea varieties, the bottled tea market has surpassed US$ 47bn in 2017 and the status quo is highly likely to continue in 2018,” said a senior analyst at Fact.MR.

The study opines that the consumption of still bottled teas will rise to 35m litres globally in 2018. However, sparkling tea revenues are set to grow at a 6% YOY in 2018 over 2017. This rapid expansion can be attributed to growing demand among younger consumers for sparkling tea, in particular, sparkling iced tea. The bottled tea marketplace is witnessing manufacturer investments in introducing new varieties of sparkling iced tea.

Conventional bottled tea has remained the primary choice among tea lovers, accounting for around 80% of total consumption. Organic teas are growing in popularity, with consumption increasing by 4m litres in 2018 over 2017.

The study found that 30% of bottled tea is made of black tea in 2018, while a quarter is green tea. Black tea continues to remain the highly popular tea blends and is consumed for its potential health benefits.

Globally, the bottled tea consumption remains concentrated in the APEJ region. With the region’s populous nature and its significant younger population, APEJ accounted for two-fifths (40%) of the global bottled tea consumption in 2017. The report estimates that Greater China consumed nearly 43% of the APEJ bottled tea consumption. According to the study, the popularity of black tea in the region has significantly contributed to the steady rising bottled tea consumption.

The bottled tea market growth will continue its upwards steady trend on the back of increasing preference for ready-to-eat beverages and consumer-driven product innovations.

The report tracks the bottled tea market for the period 2018-2027. According to the report, the bottled tea market is projected to grow at nearly 4% CAGR through 2027.

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Consumer preference for coffee pods has been tarnished due to the high environmental footprint of used coffee pods. To alleviate the factors leading to a loss in the market, manufacturers have embraced the usage of compostable coffee pods and help alter consumer perception regarding coffee pods.

Cannabis-infused coffee pods to help in sustained growth

With the legalisation of cannabis usage in some countries, the global food and beverage industry has seen multiple new innovations, one being the introduction of cannabis-infused coffee pods. These are reported to have the same effects when brewed at home, just like café-brewed cannabis coffee, and have become popular due to the stigma involved with the public consumption of cannabis coffee.

Gourmet coffee pods to attract the attention of coffee connoisseurs

With specialty coffee becoming an affordable luxury, particularly for avid coffee aficionados, leading players in the coffee pods market are introducing products with exclusive flavours and unique origins. International coffee chains are willing to deliver innovative flavours to attract coffee lovers, and enhance coffee sales, which is instigating a new trend in the coffee pods market. Efforts in the value chain for coffee pods production to enhance the potential of gourmet coffee is likely to work in favour of the market.

Global coffee alliance to change status quo of the market

The coffee pods market has been partially fragmented for the past few years. But the possibility of growing consolidation of the coffee pods market has increased in the past year. In August 2018, the Global Coffee Alliance was formed between Nestlé and Starbucks brands, where Nestlé gained the rights to market, sell, and distribute Starbucks packaged coffee and tea in all at home and away from home channels. The partnership of the companies has changed their standing in the overall coffee pods market. One the other hand, Kraft Heinz Company has reported a decline in its sales, as it is struggling to keep up with consumer trends, reducing its position in the coffee pods market.

Dunkin’ K-Cup coffee pods are collaboration with JM Smucker Company and Dunkin’ Donuts. As announced by JM Smucker Company in November 2018, K-Cup coffee pods were recognised as one of the 25 products to receive the Nielsen Breakthrough Award, which is awarded to products based on endurance, sales, and product distinction. Working on the lines of sustainability, illycaffè launched its new line of illy-brand aluminium capsules for coffee pods in February 2019. Similar work for sustainability was carried out by Nespresso, an operating unit of the Nestlé Group, which partnered with Swedish company, Velosophy, to produce a bike made from used aluminium capsules, in an effort to motivate customers to recycle coffee pods.

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Allegra revealed the tea segment saw revenues of £302m in 2018, an annual increase of 11.1%, and forecasts UK out-of-home tea sales will reach £329m for 2019, representing annual growth of 8.9%.

While UK industry leaders remain positive in their outlook for out-of-home tea sales, 37% of tea drinkers surveyed perceive tea out-of-home as poor value-for-money.

World of Coffee suggests introducing a premium range of loose-leaf teas can be an effective strategy to boost sales and generate value-driven narratives around provenance, preparation and appreciation. This approach can also catalyse interest from the 31% of UK consumers surveyed who prefer loose-leaf tea over tea bags.

Twenty-one percent of UK tea drinkers surveyed purchased one of either a green, herbal or fruit tea variety on their last café visit.

Forty-two percent of tea drinkers surveyed are more likely to favour tea purchased at independent coffee shops versus branded chains (22%), with a quarter making their last out-of-home tea purchase at an independent. This dynamic is sustained by a desire to support local businesses and the perception that independents offer greater attention to detail in terms of tea preparation and service.

Sixty-one percent of UK industry leaders surveyed describe the short-term sales prospects for tea out-of-home as positive, a 6% reduction on the previous year. With over 80% of UK consumers anticipating no change in the frequency of their out-of-home tea consumption over the next 12 months, operators must focus on innovation to challenge tea menu indifference. Sixty-one percent of consumers surveyed indicate better quality beverages would encourage them to drink more tea out-of-home, while an increased menu range would compel 40% to do so.

Commenting on the report findings, Allegra founder and CEO Jeffrey Young said: “Tea is yet another category of the UK hospitality that is seeing a shift toward premiumisation. Premium teas provide further opportunities for foodservice operators to increase average spend and increase the breadth of their customer base. However, they to need to communicate value-add by inspiring and educating customers on the true benefits of premium tea.”

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Analysts predict the next wave of OOH growth will be driven by innovation and expansion outside of the core offering, focusing on areas such as better food, new approaches towards coffee real estate, the growth of digital platforms and new packages and machines for coffee.

The three key drivers of the shift in the OOH coffee segment are:

Evolution of the coffee shop, which is driven by intense competition within coffee and from established foodservice operators rapidly improving their coffee offerings.

Within evolution of the coffee shop, Rabobank identified five themes:

• (Good) Food is increasingly necessary to partner the coffee
• Competition from Quick-service restaurants and C-stores e.g McDonald’s Cafe
• New coffee brands, e.g Irish Centra stores making its own coffee brand Frank & Honest
• Co-location partnerships e.g Peet’s Coffee and Capital One banks
• Coffee shops as a marketing tool and innovation lab e.g Starbucks Roastery

Convenience and technology: consumers are demanding convenience in every aspect of their lives, including how they get their coffee. While the coffee industry is developing new technologies to meet these trends, Rabobank said the rollout is still in its early stage and varies across companies and sub-segments.

• A strong digital presence such as loyalty apps, mobile ordering and handheld devices for baristas. All this data can then drive sales and loyalty offers.
• Many coffee brands are exploring delivery, with China’s Luckin Coffee turning delivery into a major area of its business.
• High quality vending is on the rise following the rising cost of labor in coffee shops. The Coke-Costa acquisition is a key example here with the company looking to expand its Costa Express business.
• Ready-to-drink coffee is booming (outside of Japan), providing on-the-go convenience with a package and product that supports near endless innovation.

Premiumization has always been a driver of change in beverages, but Rabobank has focused on emerging markets and less-developed coffee segments.

• The foodservice and office coffee markets is an area where premiumizaton is driving fundametnal change in consumer experience.
• New coffee formats are also a way to deliver premium coffee. Rabobank predicts coffee-on-draft such as illy’s Aria nitro coffee to expand rapidly.
• Premiuization is also growing in emerging markets such as Brazil, Bengal and Vietnam.

Read Rabobank’s full report here.

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Trade flows strengthen Brazil’s dominance
The international trade of green coffee saw strong growth in 2018, with 73m bags of green arabica exported (up 5% YOY) as well as 40m bags of green robusta (up 8% YOY). Virtually all of the growth came from Brazil and Vietnam, making the world more dependent on the two largest producers. Current low coffee prices are likely to prevent further growth in Central America and virtually all other countries, except low-cost producers Brazil and Vietnam.

The trade of processed coffee was much more stable in 2018, remaining virtually unchanged YOY. Italy is close to becoming the largest exporter of roasted coffee, almost overtaking Germany. There was also significant growth in soluble exports from Vietnam and Indonesia in 2018, but Brazil remains the top exporter of soluble coffee. Increasing robusta production in Brazil will make its soluble industry even more competitive going forward. Brazil’s top spot will be further solidified if a free trade EU-Mercosur agreement is reached, posing immense opportunities for Brazilian soluble coffee factories.

Consumer trends shaping trade flows
Rabobank’s research identified a number of coffee consumption trends that drive coffee flows, in both quantitative and qualitative terms.

A shift towards out-of-home consumption
Almost everywhere, out-of-home coffee consumption is growing faster than at-home coffee consumption, driven by changes in lifestyle and greater innovation from out-of-home options. As consumers shift purchasing patterns, there is a greater focus on differentiated, premium, and traceable products, and trends set in out-of-home consumption are expected to eventually trickle down to at-home consumption.

Ready-to-drink coffee boosts sales
Ready-to-drink (RTD) coffee consumption is well established in Asia – Japan alone accounts for over half of the global volumes – but it is also becoming increasingly prevalent in North America and in Europe, especially given the rising popularity of cold brew coffee. This is a core growth area within coffee and a high-margin, brand-building area.

The recent partnership between PepsiCo and Lavazza, as well as the introduction of Costa’s RTD coffee, shows us that the lines between soft drinks and RTD coffee will continue to blur.

Continued growth of capsules and pods in developed markets
The key success factor of single-serve portioned coffee is its convenience, specifically its ease of use and speed of preparation. Western Europe (65%) and North America (26%) represent the lion’s share of global volumes, but demand is growing in all regions. Furthermore, their efficiency means that a shift to capsules and pods will likely have a negative impact on coffee volumes.

Premium coffee development in Brazil
At close to 21m 60kg bags of coffee per year, Brazil is the second largest coffee consumer in the world, and demand is still growing. Sales of premium products, such as specialty coffee, fresh coffee beans and coffee capsules are outperforming those of standard products, such as instant coffee and standard ground coffee. Premium coffee sales in Brazil are expected to continue to grow double-digits through 2021 and to attract new investments from global coffee players.

An extremely hot market for coffee shops in China
China’s coffee consumption is still quite low, with annual per capita consumption of only 13 cups, but major international and local coffee chains are racing to gain presence and visibility in the major cities, following the listing of Luckin Coffee in May 2019. Chinese consumers expect high levels of service, and locations are far from cheap, but a growing number of young Chinese are incorporating a cup of coffee into their daily life.

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Extracted from tea leaves, tea concentrates are a double-strength brew that dilute with boiling water or any diluents to serve as a ready-to-drink beverage. Flavored tea concentrates are made available by blending tea leaves with other spices such as cinnamon, ginger, and berries.

Favored by foodservice, they enable many different beverages to be made from one base product ensuring quality time after time with little to no effort. In a hectic lifestyle, a ready-to-serve drink with added health benefits, is extremely desirable for the consumers, especially when it requires no hot brewing. Tea concentrates also provide ease of storage, transport, and versatility.

For consumers, it is a well-known fact that tea has numerous health benefits. It is this very trait of tea concentrate that enables the product to be marketed and sold as a health beverage, and gain a wider consumer base.

Consumers also want sensorial experiences that are innovative. Tea concentrates achieve this by providing flavor fusions that they wouldn’t be able to recreate at home.

However, as tea concentrate prices are higher than traditional tea products (since qualitatively they have a much higher tea content), this puts tea concentrates in a premium price point where consumers from developing/underdeveloped countries don’t make a purchase decision based on convenience, but rather economic feasibility of the product.

Global Tea Concentrates Market: Key Insights

The growing fast food culture across the globe is influencing the tea concentrates market in a positive way. Multiple fast food giants already offer tea beverages as a part of their menu, including McDonald’s, Starbucks, and Taco Bell. This growing fast food culture directly affects the tea concentrate demand in a positive way.

Global demand for healthy food has been on the rise constantly, and that includes the increasing demand for healthy beverages. Use of tea concentrate in health drinks is preferred by consumers, which drives the market for tea concentrates.

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