Future Market Insights (FMI) Archives - Tea & Coffee Trade Journal https://www.teaandcoffee.net/organisation/future-market-insights-fmi/ Tue, 29 Oct 2024 15:03:50 +0000 en-GB hourly 1 Ceremonial to TikTok Trending: The Evolution of Matcha https://www.teaandcoffee.net/feature/35258/ceremonial-to-tiktok-trending-the-evolution-of-matcha/ https://www.teaandcoffee.net/feature/35258/ceremonial-to-tiktok-trending-the-evolution-of-matcha/#respond Thu, 17 Oct 2024 10:15:47 +0000 https://www.teaandcoffee.net/?post_type=feature&p=35258 Steeped in centuries of traditions and rituals and once considered a drink only for the Japanese elite, matcha has since become a mainstream consumer product, both in its origin country of Japan and further afield to the US and UK. By Kathryn Brand

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These days, a significant proportion of Western consumers will have heard of matcha, even if they have not tried it or know exactly what it is. And for many of these consumers, they will have spotted it on the
menu of a local café or coffee shop chain, or as the listed flavour in baked goods, ice cream or perhaps even in the tea aisle. While some may posit that the Westernisation of matcha is a blight on the  traditions and rituals entwined in the beverage, most welcome the growth in its popularity, the expansion of its market and the sharing of a culture.

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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The balance of organic https://www.teaandcoffee.net/feature/33025/the-balance-of-organic/ https://www.teaandcoffee.net/feature/33025/the-balance-of-organic/#respond Thu, 12 Oct 2023 16:40:32 +0000 https://www.teaandcoffee.net/?post_type=feature&p=33025 The growth of the organic tea and coffee market is accelerating, but is the cost to the producers and consumers justified by the environmental benefits? By Kathryn Brand

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The growth of the organic tea and coffee market is accelerating, but is the cost to the producers and consumers justified by the environmental benefits? By Kathryn Brand

While organic tea and coffee has been readily available on the market for some time, the category has seen, and is expected to see, continued growth as more consumers opt for products, they believe to be more sustainable and even healthier for them, and producers seek to improve their sustainability credentials and market positioning.

Nandini Roy Choudhury, client partner of food & beverages at global market research firm, Future Market Insights, writes in a report that the organic tea market holds a value of USD $1.24 billion in 2023, and is expected to reach a value of USD $2.69 billion by 2033, at a CAGR of 8 percent during the forecast period. Meanwhile, the organic coffee market has a projected CAGR even higher, at 12.5 cent for the forecast period 2023 to 2028, according to a report by Mordor Intelligence.

Consumer interest in organic tea and coffee has been gaining especial traction since the pandemic, when wellness became a priority, and organic is often believed to be a cleaner and healthier option over regular products, due to the lack of chemical fertilisers and pesticides. The sustainability benefits are also undeniable and consumers are seeking to make more mindful and conscious purchasing decision. Meanwhile, producers are heeding to this consumer pressure, and wanting to offer tangible sustainability claims to differentiate themselves from their competitors, and perhaps even justify a higher price point of their product.

Image: Equator Coffee

In terms of consumer demand and purchasing of organic tea and coffee, the geographical distribution is similar, with Europe dominating, particularly Germany, France, and the UK, according to FMI, and North America seeing similar figures in both organic tea and coffee. In organic tea specifically, parts of Asia, including China, are witnessing significant growth in consumption, said a spokesperson from Hälssen & Lyon. Whereas in organic coffee, global insights firm, Mordor Intelligence revealed Latin America is seeing the fastest growth.

Notably, the biggest producers of organic tea are similar to the biggest global producers of tea in general, countries such as China and India, however, the case is not the same for organic coffee. Samuel Klein, green coffee buyer, Partners Coffee, explained that, while Brazil produces a third of the world’s coffee, “Only a handful of Brazilian exporters are offering certified organic coffees.”

Ted Stachura, director of coffees, Equator Coffees, concurs; “Although there is some organic coffee cultivation in Brazil, Vietnam, and Colombia, the world’s largest coffee-producing countries are not typically associated with organic production.” This is largely due to growers in such countries producing coffee on a mass scale, and the farming methods necessary to do so. Smallholder farms using semi-forested coffee cultivation, are often organic by default, in countries such as Ethiopia, Peru and Mexico, said Stachura, as well as Honduras, Guatemala, Rwanda, Burundi, and Uganda, added Klein.

Organic farming is broader and more thorough than a lot of consumers realise; it is about more than just limiting or eliminating chemical fertilisers, herbicides and pesticides. “Consumers who support organic farming practices are voting to not support the petrochemical industry. Producing chemical-based fertiliser has a negative environmental impact,” detailed Stachura. “Shipping these fertilisers internationally, as coffee producing countries typically do not produce this kind of fertiliser, incurs added environmental costs. Handling chemicals poses potential health risks to farmers and, in situations where producers lack training, application of too much fertilisation may result in runoff of these chemicals making its way to water sources.” The soil itself benefits from the lack of chemicals in the long term, increasing its biodiversity, structure, fertility, and resilience to environmental influences, leading to healthier eco systems.

“Organic farming also has the potential to sequester carbon dioxide in the soil,” noted Hälssen & Lyon’s spokesperson, “This can contribute to mitigating climate change by reducing greenhouse gas emissions.”

Organic’s financial & health benefits

Choudhury stated that consumption of organic beverages can help to support farmers on a smaller scale, in addition, “Sales of organic tea are projected to have a higher price realisation thereby improving the socio-economic situation of tea producers.” The organic certification encourages and even necessitates fairer, safer and more equitable trading for the producer that supports the tea or coffee growing community.

Further, there are evolving beliefs, especially among consumers, that the lack of chemical agents in the process results in a healthier product. “The reduction in chemical residues in organic food may result on long-term health benefits by lowering the potential risks associated with pesticide exposure,” explained Hälssen & Lyon’s spokesperson.

Image: Partners Coffee

The health claims for organic produce are still evolving, especially within the tea segment, with Choudhury stating that “compared to traditional black tea, organically cultivated tea contains more catechins such as epicatechin gallate, epigallocatechin gallate, and epicatechin.”

Roadblocks to organic production

So, if there are all these benefits to the environment, to the producer, the consumer, then why aren’t more tea and coffee companies producing organic? As with such things, the reason is multifaceted. Broadly, it is more expensive, both for the producer and consequently the consumer. The requirements and inspections for the certification are demanding, and costly, and it is by no means a quick or simple switch.

Partners Coffee’s Klein explained, “It begins with a multiyear period where no prohibited fertilisers, fungicides, or pesticides may be used. During that time the farm must develop and implement a documented plan to fertilise and treat the plants with organic inputs.” Throughout this conversion phase, any coffee (or tea) that is grown and produced must still be sold without the organic title, as the transition is not fully complete, with no compensation for the expense of the process or of lost yields.

Spencer Turer, vice president, Coffee Enterprises, added, “when organically grown coffees are not able receive the premium prices for the certification and are sold as non-organic coffee due to quality issues or reduced demand, the expense of producing the organic certified coffee is changed from an actual return on investment ratio to an outright business expense for meeting the social, environmental, and ethical standards of the producer.”

Lower yields are a common side effect of organic farming, especially in the short term, “as organic practices may not provide the same level of nutrient supply or pest control,” said the spokesperson from Hälssen & Lyon, resulting in additional unit costs of production. However, she also suggested that there have been successes where organic sections of farms have outperformed conventional sections, four-to-one, because the soil was more nutrient-rich and microbiologically diverse. But this is a long-term result that doesn’t offer immediate help to farmers in the short-term making the switch.

The added expense of the initial reduced yield is only the beginning, revealed Klein, “After coffee is picked there are strict handling requirements at virtually every stage of production. Different milling and eventually roasting equipment, or costly purge batches, must be used, followed by meticulous cleaning practices. Coffee must be carefully separated and documented with every movement, then production records must be audited frequently to identify accidental contaminations.

“The outcome of all of this is that, in most situations, producing an organic-certified coffee requires more labour and greater expenses while introducing new risk in terms of yields and pest management.”

The higher risk and expense for the producers, translate to higher prices for the consumer, which serve as a barrier for many, especially the price conscientious, and especially when inflation and the cost of living is soaring in many parts of the world.

“Many consumers and businesses demanding certified organic coffees expect them to be price competitive with the cheapest conventional coffees, which is unrealistic. I think for some customers it’s easy to justify a higher price because the value add is more obvious, but unfortunately, I think it means the quality of organic coffees on the market generally tend to be lower to compensate for price sensitive customers,” argued Klein.

Image: Equator Coffee

However, despite organic teas and coffees generally having a higher price point, they are both growing markets with burgeoning consumer interest. Even if consumers do not fully understand the complexities of the organic certification undertaking, they know it is better environmentally, often in quality, and possibly for their health too, so they know there is additional benefits that they are paying that bit extra for. In Turer’s judgement, “the price barrier [only] exists when the quality of the organically certified coffee, specifically the flavour, does not meet the value expectations of the consumer.” In other words, if a consumer purchases organic coffee or tea, and they experience good quality and taste, as well as the moral and environmental associations, then there is value for the money.

Do the benefits outweigh the challenges?

It could be argued that governing bodies ought to be doing more to support organic farming, to take some of the risk and cost off of producers and subsidise the products for consumers. Stachura believes that “governments in affluent coffee-consuming nations have the capacity to play a significant role in supporting and advancing regenerative organic farming practices,” and, perhaps, have the responsibility to do so if their country is the big consumer of that product in particular.

Klein feels, however, the argument that “economic stability and mobility for smallholder farmers is more urgent. I would like to see the two things promoted and supported in tandem.” He continued, “If organic production can support and increase farmers’ livelihoods, it’s absolutely a win. But if it reinforces an exploitative price structure, or expects farmers to bear unsustainable levels of risk, I think that’s a problem that needs to be confronted.”

While there is no doubt that organic farming is beneficial in so many ways, there must be support and incentives for tea and coffee farmers to make that switch for it to be viable to more than just the larger, commercial producers. But there are ways in which this can be mitigated. “Collaboration and innovation in the entire supply chain is key for helping to make organic tea more accessible and affordable for everyone involved,” explained the spokesperson from Hälssen & Lyon.

Not only can farms share knowledge and best practices, but share the costs of certification, particularly for smaller coffee or tea producers, among nearby farms. Klein also added that this challenge presents the opportunity for agricultural innovations. “People [are] learning new techniques of soil management or crop diversification specific to their farms which can improve yields with no or few synthetic inputs. If that innovation continues and expands, we might see significant improvements in the quality of organically produced coffees.”

There may still be challenges for organic farming, but they are seemingly worth confronting as the market reports demonstrate there is clear consumer demand for organic tea and coffee. Consumers may even be willing to pay that bit more for the certified products as it allows them to have a small part of environmental agency and responsibility over the way in which the products they buy are grown and produced. Stachura concluded, “As the world’s population grows, and the demand for food, including coffee, embracing organic and regenerative farming practices becomes imperative for human survival.” Therefore, we must continue to look for ways in which it can be remunerative, accessible, and equitable.

  • Kathryn Brand is an associate editor on T&CTJ, while still writing for several of Bell’s other magazines. She joined Bell Publishing as an editorial assistant at the beginning of 2022 after graduating from the University of East Anglia with a degree in English Literature and Creative Writing. She may be reached at: kathryn@bellpublishing.com.

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Tea-bagging tech answers the call of the modern era https://www.teaandcoffee.net/feature/32392/tea-bagging-tech-answers-the-call-of-the-modern-era/ https://www.teaandcoffee.net/feature/32392/tea-bagging-tech-answers-the-call-of-the-modern-era/#respond Fri, 14 Jul 2023 14:31:41 +0000 https://www.teaandcoffee.net/?post_type=feature&p=32392 The tea-bagging machinery sector had been slow to innovate but this is changing as manufacturers are stepping up to meet customer demands. By Vladislav Vorotnikov

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The tea-bagging machinery sector had been slow to innovate but this is changing as manufacturers are stepping up to meet customer demands for more sustainable, flexible, efficient, and automated equipment. By Vladislav Vorotnikov

As the global tea market continually becomes more sophisticated, tea-packaging tech is following the same path. Helping tea manufacturers meet the demand for more sustainable, environmental-friendly packaging is one of the critical challenges in the present time, and yet there are several other vital goals that must be chased.

The global automatic tea bag packaging market is expected to see a 4.9 percent average growth through 2026, owing to surging tea production and consumption in the coming years, primarily in the emerging economies of India and China, forecasted Mordor Intelligence (MI), an Indian think tank.

Packaging has a significant role to play in the expanding tea market as it not only protects and preserves the product within but also enables brand communication. It is perceived to be almost as crucial as the selection of the tea product itself and is a driving factor for the increasing versatility of tea packaging, with luxury aesthetics and smart carton design at the forefront of consumer attraction, MI analysts stated.

“Consequently, the packaging equipment manufacturer must explore long-term investment opportunities in versatile and adaptable packaging equipment to increase output, reduce labour costs, and maintain a foothold in the market,” per MI.

Among the key vendors in the tea packaging market, the MI study lists Teepack Spezialmaschinen GmbH & Company KG, Selo Group, Xiamen Sengong Packing Equipment Co Ltd, Liaoyang Conoval Machinery Co Ltd, ACMA SpA, FUSO International, IMA Group and Sammi Packing Machine Co Ltd.

All tech suppliers tend to shape up their offer in their own way, but there are some common trends everyone in the industry clings to.

Individually tailored solutions

Teepack recently presented a new model of the Constanta machine family – a highly popular tea-bagging line. Mario Kuhn, Teepack’s sales and marketing manager, disclosed that the company kept the characteristics of the old Constanta by being a rugged, reliable machine that does what it is supposed to do: producing good tea bags around the clock.

In addition, Teepack added flexibility by implementing a platform approach using standardised modules and connecting points. “If the machine is delivered in a certain configuration, it is easily upgradable and amendable in the field. For example, the version with a speed of 180 bags per minute (BPM) can be rebuilt in the field into the 250 BPM version,” Kuhn said.

“The same goes for envelopes: if your machine is equipped to produce heat-sealed envelopes, the machine can be upgraded in the field to produce also crimped paper enveloped bags. This benefits a customer in that the machine can grow with their requirements and allows them to react flexibly to new market developments, without having to buy completely new machinery,” he explained.

This approach also allows Teepack customers to use a multitude of consumables. The customer can decide which modules fit into the slots for consumables, so that they can produce with their current supply. The customer can choose from a total of 1320 possible configurations: two bag sizes, two types of envelopes plus naked bags, two speed versions and three types of removal options are just a few of the options available.

“We are especially proud of our newly developed pre-grouping system for the Constanta. The ejection chute is formed in a way, that an empty box can be put in front of the opening and the pusher pushes the stack into the box. With that innovation, the speed of 250 bags per minute can be operationally used without having to acquire additional staff. For the mature markets, a box erector with filler and lid closer is available, further automating the process if so desired,” Kuhn said.

With Industry 4.0 pushing network-centric connectivity, Teepack is currently looking into how to best apply these new and exciting opportunities for the benefit of its customers. Integrating the machines into a network and presenting the machine’s data in an easy-to-understand way helps to further improve reliability and profitability. Virtual reality is also a field in which there is a lot of potential. This technology enables customers to train personnel while being able to continuously produce with their machines, Kuhn explained.

Sustainability seems paramount

The desire to be more sustainable has become a primary concern in the tea bag packaging industry, the MI study has shown. Packaging equipment manufacturers are increasingly adopting automation in their production lines and adhering to sustainable trade initiatives throughout the world.

Nandini Roy Choudhury, client partner of Future Market Insights (FMI), an Indian consulting agency that recently conducted a comprehensive study of the global pyramid tea-bagging market said that the switch towards pyramid-shaped tea bags itself is one of the key consumer trends tech vendors need to address. The growth in this segment in the coming years is expected to outpace the rise in demand in the global tea market.

“Pyramid tea bags have gained popularity as premium tea products for several reasons. First, pyramid tea bags offer a higher quality tea experience compared to traditional flat tea bags. The pyramid shape allows for more space for the tea leaves to expand and infuse, resulting in a better flavour and aroma,” Choudhury said, agreeing that sustainability plays a particularly important role in the tea bagging industry now.

“Consumers are becoming more environmentally conscious and are looking for products that are packaged in a way that minimises their impact on the environment,” Choudhury explained, adding that customers globally are becoming increasingly aware of the impact of packaging waste on the environment. A particularly important factor is that consumers are willing to pay more for products that are packaged sustainably. “Pyramid tea bags that are packaged using sustainable materials and practices are becoming more popular as consumers look for ways to reduce their environmental footprint.”

When it comes to the growing popularity of sustainable solutions, there are several factors in play. Many governments around the world are introducing regulations to reduce packaging waste and promote sustainable packaging practices. This means that tea bag brands that adopt sustainable packaging practices can avoid regulatory penalties and maintain their market share, Choudhury said.

“Sustainable packaging practices can also create opportunities for innovation and differentiation. Brands that use innovative sustainable materials and packaging designs can differentiate themselves in a crowded market and appeal to consumers looking for new and sustainable packaging solutions,” she added.

Different tastes

The MI study disclosed that when choosing tea-bagging equipment not all tea manufacturers seek the same features. For instance, larger manufacturers in developing nations are anticipated to increase their use of tea packaging materials and adopt new packaging technologies to address issues such as contamination, extend the shelf lives of their products, and make them more aesthetically appealing.

Smaller firms in these countries are expected to mechanise tea-packaging processes to expand output and increase efficiency, further boosting tea bag-packaging machinery demand.

Laura Maria, sales area manager with Italy-based IMA Maisa said that the company primarily focuses on providing customers with easy-to-use solutions. “Our machines are very simple to operate with high performance, extreme simplicity, and mechanical sturdiness which are the most outstanding advantages we offer,” she said, adding that customers are also looking for better automation of their packaging lines.

The FMI study further disclosed that sealing is an important field in which a growing number of companies see room for improvement. “Traditionally, heat-sealing has been the most common method for sealing tea bags, but there is growing interest in alternative methods such as ultrasonic sealing, which can offer faster production speeds and reduce the need for adhesives,” Choudhury shared.

MI also said that the demand not just for an individual tea bag but also overwrapping for a tea bag is gaining popularity to preserve freshness, and for those consumers wanting hygienic and premium design. “Thus, packaging manufacturers are [developing] machinery that not only forms the bag but will also wrap the product,” MI analysts disclosed.

Streamlining operations

Manufacturers are designing solutions to make tea-bagging lines more effective. New Jersey-based Munson Machinery does not manufacture tea-bagging equipment, but its mixers are typically positioned upstream of tea bagging and packaging lines, which as explained by Susan Schaaf, office manager of Munson, require totally uniform blends to maintain consistent flavour.

“Because Rotary Batch Mixers continue to rotate during discharge, they prevent stratification and segregation of the batch regardless of disparities in the size, shape or bulk density of ingredients. This is especially critical when filling individual tea bags, since variations in blend ratios are likely to increase as the size of a given sample decreases,” Schaaf said.

While Munson Machinery offers eight types of mixers and blenders, the company’s Rotary Batch mixer design remains the clear preference among tea processors worldwide remains due to its tea-specific performance advantages including: rapid, gentle blending, fast cleaning, and equal efficiency, Schaaf added.

New form, new meaning

Sustainability has truly taken center stage across all sectors, and tea bagging is not an exception, said Viju Vasishta, sustainable materials expert at PA Consulting, which has recently rolled out an innovative product — tea sheets, designed to be an alternative to conventional tea bags. Vasishta said that the product is currently in the prototyping phase, though the company has already demonstrated the proof of principle in terms of performance compared to standard tea bags.

Brand owners will have to make their packaging sustainable, especially for end-of-life purposes such as recyclable and plastic-free, due to both consumer and regulatory pressures, Vasishta claimed. “Currently, some branded tea bags are packaged in foil wrap and other flexible plastic packaging, and the sector needs to be innovative to either fully eliminate the wrap or use alternative sustainable materials which can be recycled,” he explained, adding that paper and pulp are emerging as key substrates across many food and FMCG packaging and a similar movement regarding these materials is seen for the tea sector.

Generally speaking, the tea-bagging sector lacked groundbreaking innovations in the past few decades, Vasishta shared. “Consuming tea should be a moment of joy for the consumer, and we haven’t seen much innovation in the tea-bag market over the last few decades. We see the same format of tea bags with slightly varying shapes, and the consumer experience feels pretty flat,” Vasishta admitted.

“The [coffee sector], for example, has made the concept of coffee into a premium product. The tea sector has not yet reached that level of innovation. There is an appetite for the tea sector to transform itself, but brand owners are risk averse, and therefore, we are seeing low levels of innovation,” he said.

Digitalisation on the horizon

Automation and robotics are already being used in tea-bagging production to some extent, but the industry may see further advancements in this area, particularly in terms of the use of artificial intelligence and machine learning to optimise production processes.

Choudhury assumes that integration with technologies is not limited to automation. “There is already some integration between tea bagging and technology, such as the use of smart labels or QR codes to provide consumers with more information about the tea they are consuming. We may see further integration in the future, such as the use of augmented reality or virtual reality to enhance the tea-drinking experience.”

“Overall, as consumer preferences and technological capabilities evolve, the tea-bagging industry will likely continue to see innovation and advancements in production processes,” Choudhury added.

  • Vladislav Vorotnikov is a Batumi, Georgia-based multimedia B2B freelance journalist writing about the tea and coffee industry since 2012.

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A growing trend: plantable packaging https://www.teaandcoffee.net/blog/32033/a-growing-trend-plantable-packaging/ https://www.teaandcoffee.net/blog/32033/a-growing-trend-plantable-packaging/#respond Thu, 25 May 2023 14:33:01 +0000 https://www.teaandcoffee.net/?post_type=blog&p=32033 Plantable packaging is an emerging market that has the potential to grow quickly in the coming years due to its sustainable and eco-friendly nature.

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Spring is in full bloom, and apparently, so is the plantable packaging market. A new report from global market research firm, Future Market Insights (FMI), projects the plantable packaging market size to be valued at USS $120 million in 2023 and to rise to USD $340 million by 2033. Sales of plantable packaging, per FMI, are expected to grow at a CAGR of 11% during the forecast period.

Plantable packaging, that is, packaging created from natural and biodegradable materials, is an emerging market – still small within the coffee and industries but expanding – that FMI believes has the potential to grow rapidly in the coming years due to its sustainable and environmentally friendly qualities.

As people become more aware of the environmental impact of plastic waste, there is a greater demand for sustainable packaging alternatives. Plantable packaging is not just a sustainable solution, but it also has other advantages in addition to biodegradability, such as durability and moisture resistance.

Although, the amount of coffee and tea packaging that is ‘plantable’ is relatively small, we are seeing more compostable and biodegradable packaging and single serve capsules/pods enter the market each year. Some companies are fully committing to the ‘plantable’ aspect, such as Four Stages Tea and Herbals, a company that offers all organic and fair-trade loose-leaf functional tea blends and which proceeds go to saving the monarch butterfly, which is on the verge of extinction. Four Stages has announced that it is launching plantable packaging that has milkweed seeds and nectar plants infused inside (see T&CTJ’s July/August 2023 issue for a story on Four Stages Tea and Herbals).

The regulatory push for sustainable packaging enhances plantable packaging’s appeal. As the report notes, governments around the world are implementing measures to decrease plastic waste and encourage sustainable packaging. The European Union (EU), for example, has set ambitious targets to eliminate plastic waste and promote the use of environmentally friendly packaging materials. The EU Circular Economy Action Plan, which aims to make the European economy more sustainable and circular, is one method Europe uses to promote plantable packaging options. Furthermore, several EU countries have enacted legislation and measures to limit plastic waste and encourage sustainable packaging options.

As part of its efforts towards sustainable development, India is actively promoting plantable packaging options. FMI reports that the government has implemented several initiatives and legislation to encourage the use of environmentally friendly packaging materials.

Within North America, several programs have been implemented to encourage the usage and adoption of plantable packaging solutions, such as the Sustainable Packaging Coalition (SPC), a membership-based collaborative that strives to create a more sustainable packaging sector. The SPC has created a set of sustainable packaging guidelines, which include the use of plant-based materials and compostable packaging. It also provides companies with tools and resources to help them implement sustainable packaging solutions, such as plantable packaging.

Plantable packaging also provides a unique value proposition to clients because it not only functions as a packaging material but also doubles as a way to produce plants. This packaging technology can help businesses stand out in a congested market and attract customers who want something different. As with all packaging, plantable varieties can be customized with various forms, colours, and designs.

While there are many upsides to plantable packaging, FMI’s report reveals some current disadvantages that must be considered before any investments are made. For example, the limited market size — while the plantable packaging market is expanding, it remains modest in comparison to other packaging materials. In the short term, this may limit the potential for high returns on investment. Additionally, plantable packaging is currently more expensive than standard packaging materials, making it less competitive in price-sensitive applications. Furthermore, scalability might be a challenging aspect for businesses that rely on natural materials as they can be altered by weather or other external factors.

Investment in the plantable packaging industry can provide significant opportunities for growth and sustainability. However, as FMI’s report advises, comprehensive study and due diligence are required to examine the product’s market potential, competitive landscape, and environmental impact, among other things. Yet, as governments ramp up their efforts to reduce packaging waste and consumers demand more sustainable options, plantable packaging is one to strongly consider.

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Kombucha eyes growth in new markets https://www.teaandcoffee.net/feature/32192/kombucha-eyes-growth-in-new-markets/ https://www.teaandcoffee.net/feature/32192/kombucha-eyes-growth-in-new-markets/#respond Tue, 09 May 2023 16:08:55 +0000 https://www.teaandcoffee.net/?post_type=feature&p=32192 Touted as the ultimate functional beverage, kombucha is a well known, strong performer in the US market with a rabid fan base, while in the UK and Europe, kombucha is still working to establish itself, but its popularity is growing. By Kathryn Brand

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Touted as the ultimate functional beverage, kombucha is a well known, strong performer in the US market with a rabid fan base, while in the UK and Europe, kombucha is still working to establish itself, but its popularity is growing. By Kathryn Brand

Depending who and where you ask, kombucha ranges from a niche beverage that people have heard of but do not know what it is, to a beverage and lifestyle staple. However, there is no argument that, globally, it is a growing category, situated in the ready-to-drink (RTD) tea market, which is also growing. This growth is driven by four macro trends, according to London-based Momo Kombucha’s co-founder, Josh Puddle, which are “gut health, low sugar, alcohol alternatives and vegetarianism/veganism.”

Consisting of fermented tea, using a live culture of bacteria, known as a SCOBY (symbiotic culture of bacteria and yeast), fruit flavours are often then added to create a naturally low-sugar, lightly sparkling probiotic drink, sometimes with a naturally occurring ABV of around 0.5 per cent, however many manufacturers remove this alcohol content to bypass possible restrictions.

Thought to originate in China, one of the largest markets for kombucha is currently the United States. A 2015 Mintel report found that nearly one quarter of US consumers were drinking kombucha, half of which were aged 25-34. However, the market has grown significantly since then so the figures are now likely higher — and it is still growing. Future Market Insights Kombucha Market Outlook report forecasts kombucha to globally experience a CAGR of 17.4 percent from 2022 to 2033, or a rise from USD $3.4 billion to $17.1 billion.

The US is one of the most developed kombucha markets, and therefore is experiencing innovation in the category, such as Caffe Luxxe’s coffee kombucha, brewed from the company’s own coffee as a base rather than tea, to “provide the energising effects of coffee in combination with the probiotic benefit of kombucha,” said Gary Chau, co-founder of south California-based Caffe Luxxe. Kombucha is highly popular among Californians, which Chau credits to the regional trend of lifestyle wellness and holistic health.

California was also the host state of Kombucha Kon, which saw its third annual installment in April. This conference and expo is targeted specifically at the kombucha industry, offering networking across the kombucha supply chain. “Medium-large and better-distributed US brands were represented, including Brew Dr., Bambucha, Flying Embers and Local Roots,” commented Jason Walker, marketing director of Firsd Tea North America, who attended the conference.

Where the US market is reaching maturity, in Europe, in particular the UK, whilst showing strength, the category is still establishing itself and growing its popularity base, with companies mostly trying to make themselves known and educate consumers on what kombucha is and the health benefits it offers, since this is what draws most consumers to the products, and then draws them back. One company already has an advantage in this respect; Yorkshire Tea, a household name in the UK for everyday black tea, is launching a line of kombucha in collaboration with kombucha brand, HOLOS Kombucha, brewed from its own tea. It is still in its trial phase and not yet available to consumers, however, attendees  at the London Coffee Festival, which took place in April, were able to sample the new line. Several other kombucha companies also exhibited at the annual event.

Millennials drive category growth

Kombucha is heralded as the ultimate functional beverage, serving as a probiotic, which contains live microorganisms intended to contribute to healthy levels of good bacteria in the gut, supporting digestion and boosting immunity. Kombucha companies are tapping into the wellness trend that strengthened during the Covid-19 pandemic, and offering a healthy, alcohol-free beverage that also tastes good.

Momo’s Puddle said that the main consumer demographic of its kombucha are millennials, primarily 25 to 45 year olds, which concurs with Fact.MR’s report detailing millennial’s rising adoption of bottled tea. However Caffe Luxxe’s Chau shared that its kombucha is sold generally to those “interested in an overall health and wellness lifestyle.”

That statement is supported by Anna Dominey, UK general manager at Remedy Drinks, an Australia-based kombucha company that dominates in its origin country as well as in the UK market, who says that it appeals to “those who are rejecting processed foods and drinks in favour of more natural alternatives and by those who are looking to cut down on alcohol or drink more mindfully.”

It is evident that the main driver of the kombucha category is its health benefits as well as the offering of an alcohol alternative. “Around 20 per cent of Remedy is consumed in the evening, suggesting consumers are enjoying it as a tasty and satisfying alternative to alcohol,” commented Dominey, further indicating the growing partnership between the low and no alcohol trend, and the functional/wellness beverage trend.

Beverage companies are tapping into this demand, according to Puddle, “more brands are creating products specifically for this segment, eg, kombucha in champagne-style and beer-style bottles.” An example of this is Mighty Brew, which, alongside its core range which retails at a price point of approximately £5.66 (USD $7.08) for 750ml, it offers a more premium ‘Heritage’ format at approximately £11.00 ($13.76) for 750ml which is housed in a champagne-style bottle, complete with cork and cage. Mighty Brew’s Heritage range is marketing itself as an alternative to alcoholic bubbly beverages at celebratory occasions.

Tapping into current trends

This functional/wellness and low and no category overlaps significantly with those incentivised by sustainability claims, therefore, most kombucha brands cite accolades accordingly, such as Momo achieving certified organic and B Corp status. Further, Remedy endeavours to source high quality, all natural ingredients; “This was the way Sarah and Emmet [Remedy’s founders] did it when they started on the kitchen counter, and they still take an active role in sourcing the best ingredients from trusted suppliers,” revealed Dominey. “We know where every single ingredient in our drinks comes from, right down to even our live culture,” she continued. Similarly, Caffe Luxxe builds sustainable relationships with its coffee farmer partners to provide consistent and fair prices.

Looking ahead, Future Market Insights (FMI) Kombucha Market Outlook report finds that it is “unlikely that consumer demand for fermented goods may decline anytime soon,” with the millennial generation’s focus on healthy eating fuelling the demand. However, to increase its consumer base, the kombucha market needs to actively promote its health benefits to attract the older consumer, as well as work on becoming more cost-effective, as it currently sits in the more premium category in most markets. FMI’s report also details that the category can take advantage of novel flavours to attract consumers and tap into the increasingly adventurous flavour palates of the consumer.

  • Kathryn Brand is an associate editor on T&CTJ, while still writing for several of Bell’s other magazines. She joined Bell Publishing as an editorial assistant at the beginning of 2022 after graduating from the University of East Anglia with a degree in English Literature and Creative Writing. She may be reached at: kathryn@bellpublishing.com.

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Sustainable packaging’s quest for greater commercial viability https://www.teaandcoffee.net/blog/31627/sustainable-packagings-quest-for-greater-commercial-viability/ https://www.teaandcoffee.net/blog/31627/sustainable-packagings-quest-for-greater-commercial-viability/#comments Thu, 30 Mar 2023 15:35:22 +0000 https://www.teaandcoffee.net/?post_type=blog&p=31627 For consumer goods producers, the benefits of adopting sustainable packaging have been widely acknowledged, but mass adoption has remained elusive to date, with a lack of scale holding back a faster transition.

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For consumer goods producers, the benefits of adopting sustainable packaging have been widely acknowledged, growing from an obscure, societally-driven niche to a leading priority across entire value chains. Seeking to reduce a company’s carbon footprint and minimising its product’s impact on the natural environment, sustainable packaging focuses on materials that are renewable, recyclable, or biodegradable, holding considerable consumer appeal and meeting ever expanding regulations and bans. But mass adoption has remained elusive to date, with a lack of scale holding back a faster transition.

According to a survey conducted by Future Market Insights (FMI), cost remains a significant hurdle preventing smaller brands from investing in sustainable packaging, while packaging suppliers and converters face eroding margins due to high material prices. That said, FMI estimates that the market for sustainable packaging will cross the US$500 billion annual mark by 2030, driven by manufacturer, consumer, and regulatory demands. Within the next decade, sustainable packaging will no longer be a choice, but a necessity says the firm.

On 28 March, FMI hosted a virtual roundtable, “Making Sustainable Packaging Commercially Viable,” with three experts weighing in on the challenges that are holding back greater adoption at a faster rate.

“Sustainability is no longer marketing jargon or a buzzword anymore,” explained Ismail Sutaria, chief research analyst at FMI, noting that “businesses are rapidly developing and using packaging materials that not only increase the life cycle inventory, but also reduce the ecological footprint.” He notes that the significant momentum gained by the concept of the circular economy has grabbed the attention of numerous packaging giants as well as governments, responding to the realities of packaging waste and its impact on the environment.

Sutaria sees successful sustainable packaging as balancing several key attributes: low carbon footprint, lightweight, environmentally friendly, fully circular, higher rates of recycling, and perhaps most importantly to packaged food and beverage producers, better shelf life for the products themselves.

Missing currently from the advances in the sector, despite continuous innovations in materials and substrates, and a growing number of consumer product rollouts, are a high degree of adoption; to achieve a successful sustainable packaging eco-system, widespread commercialisation is required. To their credit, the food and, in particular, beverage industries are the global leaders in adopting sustainable packaging.

While sustainable packaging designs for any given product can save certain costs—reduced shipping weights for example—the cost of switching from a previous format can be quite expensive. Sustainable packaging can only be commercially viable through mass scale adoption, Sutaria stresses.

An interesting wrinkle, he notes, is that consumer perception of recyclability doesn’t always align with the actual carbon impact of packaging. Production of PET beverage containers, for example, might be lower in greenhouse gas impact, but aluminium cans have the edge in recycling rates.

In terms of consumer shopping behavior, Millennials are by far the most aggressive generation to date when it comes to preferring companies with “purpose,” such as reducing pollution or waste, and have the highest interest in choosing products with eco-friendly, sustainable packaging.

In short, Sutaria says that the higher perceived costs (led by the inability to pass on costs to consumer and the higher cost of sustainable materials), combined with inadequate recycling infrastructure and complex government regulations, are all deterrents to mass scale adoption of sustainable packaging. Collaboration across regions in regard to tracing, waste collection, and sorting and recycling systems is the missing key in what’s limiting the success of sustainable packaging and in achieving circularity

Robert Flores, VP of sustainability at Berry Global, Inc., an Indiana, USA-based manufacturer of plastic packaging products at over 265 regional facilities worldwide and 56 years of experience, said his firm sees the future of plastics moving to recycling and renewable. Mechanically recycled plastic can achieve significant energy use savings versus production of virgin plastics, says Flores, while the production of bio-plastics from renewable resources such as crops rather than fossil fuels could potentially move that process toward net-zero carbon emissions. Lightweighting—reducing the amount of plastic used in redesigned packaging—shrinks not only carbon footprints but also customer cost while improving circularity, he adds.

Tristan Kaye, commercial director of Notpla Limited, founded in 2014, explained that his firm focuses on single-use packaging in the consumer space, challenging long-standing conventions about packaging. The East London-based startup has rapidly developed an innovative portfolio of advanced, all-natural packaging products made from seaweed and plants that are naturally biodegradable and home-compostable. Some are entirely edible and impart no flavour, such as beverage “blobs” or dissolvable instant coffee sachets. Kaye said, however, Nopla is particularly focused on industrialising and scaling its seaweed-based coating as an alternative to plastic inner liners on fiber-based packaging, allowing the entire package to be composted. Other uses are in earlier stages of R&D.

Kaye noted that some other newer biodegradable products, such as PHA, PLA and PBAT are actually seeing prices increase due to changing EU classification standards. “In the EU, there is now a common definition around single-use plastic,” said Kaye, the two key aspects being it must be a natural polymer and not chemically modified. As such, Kaye said that PHA and similar products are now being classified as plastics in the EU. “So even though as we scale as a business and we’re trying to bring our costs down, we also see that other materials are getting more expensive through the role of regulation,” he noted.

  • E Edward ‘Ted’ Hoyt has more than two decades of experience as a trade magazine editor and freelance writer, authoring many articles in the premium coffee, spirits and cigar industries, among others.

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RTD coffee market set to grow as premiumization trend gains traction https://www.teaandcoffee.net/news/29043/rtd-coffee-market-set-to-grow-as-premiumization-trend-gains-traction/ https://www.teaandcoffee.net/news/29043/rtd-coffee-market-set-to-grow-as-premiumization-trend-gains-traction/#respond Tue, 08 Mar 2022 15:47:56 +0000 https://www.teaandcoffee.net/?post_type=news&p=29043 The global ready-to-drink coffee market is set to witness growth at a CAGR of 8.3% and is anticipated to reach a valuation of around US $42.3 billion by 2032, according to a Future Market Insights study.

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The global ready-to-drink coffee market is set to witness growth at a CAGR of 8.3% and is anticipated to reach a valuation of around US $42.3 billion by 2032, according to a Future Market Insights (FMI) study.

Premiumization is one of the most important drivers in the majority of developed markets. Almost all categories of products have two strands that serve different purposes. The rise of the middle class is reportedly driving the trend of affordable luxury.

More customers now have the means to elevate ordinary moments. Despite the uncertainty, consumer sentiment is rising, and consumers are experimenting with new flavour profiles and product categories.

The desire for knowledge and transparency about how and what we consume has also encouraged premiumization, which is driven by the value-driven millennial consumer who wishes to demonstrate their opinions through inconspicuous consumption. The second driver, absolute luxury, on the other hand, is a sign of exclusivity, says FMI.

It has evolved from overt displays of money to consumers displaying culture capital, exclusivity, and knowledge, all of which make for compelling stories. This strand represents the true ‘rich person,’ who wishes to prove wealth but in a less tangible, ‘meaningful’ way.

It manifests itself in a stronger desire to attempt to buy goods with an interesting story, craft credentials, clout, and provenance in the beverage industry. People are not overspending or recklessly spending, but their individual budgets now also include spendable money. It’s a low-cost luxury, and premiumization is on the rise.

Some key takeaways from the  FMI market study:

  • The market is segmented based on nature, wherein the conventional ready-to-drink coffee is anticipated to account for around 87% of the market share over the forecast period.
  • The North American ready-to-drink coffee market is anticipated to dominate the global market with a market share of around 29% in 2022.
  • On the basis of type, original ready-to-drink coffee is expected to hold a prominent share in 2022, but flavoured ready-to-drink coffee is expected to witness a lucrative growth rate over the forecast period.
  • Growing obesity rates among adults and children, busy lifestyles, unhealthy diets among adults and children, and tight working time are all factors driving consumers toward healthier options of convenience food. Ready-to-drink coffee is another functional drink that has been shown to have nutritional benefits. As the diabetic population and calorie-conscious consumers look for alternatives to sugar in their drinks, the rate of priority for antioxidant-enriched beverages among them is increasing.

“The key players operating in the global ready-to-drink coffee market are focusing on strengthening its distribution channel, partnership, merger & acquisition to reach larger consumer base,” says a research analyst at Future Market Insights.

Competitive Landscape

Companies are focusing on launching innovative drink blends with different flavours such as chocolate, vanilla, various milk flavours, customised sugar and ice level drinks and so on in order to attract the Gen-Z and millennial segment. Millennials are known for their eagerness to try new innovative flavours, which creates an opportunity for producers to introduce new flavoured ready-to-drink coffee to the market. The following are some noteworthy market developments:

  • As part of the global coffee alliance, Seattle-based Starbucks and Swiss food and beverage giant Nestlé will launch ready-to-drink (RTD) coffee products in Oceania, Latin America, and Southeast Asia by 2022.

These insights are based on a report on Ready to Drink Coffee Market by Future Market Insights. Access the report here.

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Sparkling tea: promising a future of unsweetened, healthy fizz https://www.teaandcoffee.net/feature/25835/sparkling-tea-promising-a-future-of-unsweetened-healthy-fizz/ https://www.teaandcoffee.net/feature/25835/sparkling-tea-promising-a-future-of-unsweetened-healthy-fizz/#respond Mon, 17 Feb 2020 17:13:12 +0000 https://www.teaandcoffee.net/?post_type=feature&p=25835 Sparkling tea is a small sub-segment of the ready-to-drink tea category, but as it taps into new healthy lifestyle trends, offers flavourful blends, appeals to younger consumers, and as innovative new players continue to enter the marketplace, sparkling teas are grabbing more shelf space.

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Sparkling tea is a small sub-segment of the ready-to-drink tea category, but as it taps into new healthy lifestyle trends, offers flavourful blends, appeals to younger consumers, and as innovative new players continue to enter the marketplace, sparkling teas are grabbing more shelf space. By Nandini Roy Choudhury

From traditional drinks to on-the-go business, from brewing the perfect cuppa tea to rapid explosion of ready-to-drink (RTD) cold brew coffee, and from spirits and beer to zero-alcohol, zero-calorie beverages – the beverage industry no longer looks like its former self. Today, non-alcoholic beverage companies in particular are operating on a whole new level, and the industry is undergoing massive shifts.

Although the industry has reached a point of saturation, opportunities still abound for manufacturers that blend beverage products with bold innovations. With consumers moving towards nourishment and nutrient density and the anti-sugar movement continues to impact purchasing decisions, a step-change in innovation is needed if companies are to prosper.

As the war of innovation supremacy intensifies and consumer’s thirst for healthy and eco-friendly options increases, the concept of consuming tea as liquid is being challenged and the humble brew could see monumental changes in coming years. While tea is moving away from its liquid format to tea tablets, sprays and strips, sparkling tea is making waves in the industry, aligning with the better-for-you trend.

Carbonated soft drinks (CSD) have reigned supreme in the refreshment beverage market for a long time. With the appearance of automatic vending machines and the plethora of choices available to consumers, CSD became a mainstay in American culture and gradually in other parts of the world. However, sales are increasingly stagnating, as a growing number of consumers are turning to natural products to improve their health over ‘fake-tasting’ beverages. Today, sparkling tea and RTD teas with natural sweeteners are picking up the slack for traditional carbonated drinks.

Over the years, the tea industry has proven a vast catalogue for use, variations and nuances, and sparkling tea is no exception. In the marketplace that now stocks green tea and herbal tea with significant health claims, sparkling tea appears to have a head start on the future. It is riding a new crest of the wave, with consumers, in large numbers, abandoning CSD in an accelerating trend and manufacturers filling the void in demand for ‘fizz.’

Realising that merely aligning with the ‘no-sugar’ movement won’t suffice for maintaining a distinctive brand persona, manufacturers are working on novel ingredients that promote health or offer condition-specific claims.

Tapping into New Healthy Trends

Amidst the explosion of disruptive technologies in the global marketplace and worsening environmental conditions, the concept of conscious consumerism is increasingly growing in its relevance. Subsequently, growing importance of making informed consumer decisions has led to a proclivity for organic and plant-based foods and low/non-alcoholic beverages. A blend of different teas from organic tea gardens rather than grapes is currently attracting a large number of health-conscious tea aficionados. Moreover, organic, non-alcoholic sparkling tea is making waves in pairing with a breadth of dishes, from seafood to sweet desserts, against sparkling wine.

Despite subtle shifts and evolutions, alcohol remains a permissible indulgence and continues to feature in social occasions. With quality reaching an all-time high, the revival of cocktail culture, especially among millennials, is carving a new application space for sparkling tea. Key manufacturers such as Copenhagen Sparkling Tea are adding sparkling tea to gin into the bargain. Such innovations and formulations are giving the otherwise matured beverage market the buoyancy necessary to stay afloat and flourish.

Appealing to Consumers Long Term

Is the future of sparkling tea in the hands of value-driven millennial consumers? There is no doubt that consumer demands have always affected what the beverage market offers. Today, millennials’ proficiency with social media and the emergence of the Gen Z demographic as the main consumers of tomorrow’s products are prompting a strong need for manufacturers to become early adopters of trends and to stay relevant in the long term.

Riding on natural, low-to-no alcohol, no-sugar, and alternatives to soft drinks quotient, sparkling tea is bubbling as the right product for millennials and Gen Z consumers. However, winning these consumers as long-term customers requires more than offering value-added products; manufacturers will need to look at the bigger picture.

Personalised products and customised experiences are turning up as top preferences for modern-day consumers, in addition to putting more weight on value affirmation, authenticity, and connectedness. Therefore, manufacturers of sparkling tea will need to play with everything from naturalness and functional indulgence to sustainable packaging formats and distribution trends.

Winning Shelf Space and Mapping the Road Ahead

The sparkling tea category is still a very small subset of the shelf-stable tea segment. However, spadework by tea innovators is setting the stage for emergence of sparkling tea brands. Spritz Sparkling Tea, with its launch in December 2019, brought two new flavours: a green tea infused with tastes of pomegranate, peach and lemon, and a hibiscus tea with flavours of guava, mango and dragon fruit.

As sparkling tea is beginning to win more shelf space from bottled water and CSDs, brands such as Sound Tea, Minna Sparkling Tea, Sun-Rype, Sparkling ICE, and the aforementioned Copenhagen Sparkling Tea and Spritz Sparkling Tea, are striving to become million-dollar brands in this fast-growing segment.

  • Nandini Roy Choudhury is a senior research consultant working with Future Market Insights (FMI), a global market research and consulting firm. She has been serving clients across food & beverages, pharma and chemical domains. Currently leading FMI’s Food & Beverages division, Nandini handles research projects in food ingredients, food innovation and beverages.

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