Leading post-pandemic specialty tea industry trends in 2021 — and beyond
This year, 2021, is without question the most complex time to make forecasts and predictions since the specialty tea category emerged in North America. An analysis of the groundbreaking shifts of 2020 can, however, provide some insight into what to expect regarding trends in tea in the coming years, in a post-pandemic world. Many of these trends will be discussed and analysed at the World Tea Conference & Expo, which begins Monday (28-30 June) in Las Vegas, Nevada.
According to the Tea Association of the USA, Inc, premium tea bag sales in grocery grew at an unprecedented rate of over 18 percent during 2020, fueled by tea’s reputed benefits of decreasing stress and boosting immunity, which consumers sought out for helping to ease the stress of dealing with the pandemic. New consumers turned to tea, and existing tea drinkers drank more tea. Fueled by an explosion of online sales and omni-channel acceleration in grocery, tea products still have room to grow in the grocery channel and show no signs of slowing in 2021. This bodes well for making functional teas with perceived health benefits even more accessible to the consumer.
On the flip side of the tea industry, the restaurant sector will take several more years to bounce back from declines of 40 to 70 percent in 2020, at which point we can expect to see a rebalance of that channel, resulting in higher prices. For tea, although absolute numbers may remain in decline, this represents an opportunity for premium expansion, reinvention and dramatic innovation in the restaurant and hospitality sector. It is important to note that the Kombucha category remains a strong double-digit growth segment, as do the tea-infused mocktail and low-ball cocktail market niches.
So, what do these shifts mean for tea industry trends in 2021 and beyond? Here are a few important things to consider.
1. Taking the Premium Tea Experience Home – With fewer people dining out, whether out of reluctance to frequent public establishments, or tightened budgets combined with higher prices, the food and beverage dining industry is undergoing a transition. Complete grab-and-go and semi-prepared meals are on the rise, while on-premise dining is working towards a business model of less-dense seating, with more premium, higher per customer spending. In both these cases, customers will have the opportunity for more premium tea options. As people re-discovered cooking at home and a return to comfort foods as a welcome coping mechanism in 2020, many of those patterns will persist well into the future. Many consumers had their first ever tastes of premium tea during Covid, whether they chose that tea as a healthy beverage or as an affordable luxury. Those of us in the industry know that a premium tea experience can bring a newfound appreciation for time, place, and intention – things which consumers will continue to seek in a post-pandemic world. Having discovered this and successfully steeped their own tea at home, they’re now looking to expand their understanding of the many layers of tastes and varieties available to them in the world of tea. A home tea experience is rarely price-prohibitive, when compared to other premium beverages we consume in North America.
2. Keeping Tea a Part of Everyday Wellness – As we look at tea beyond flu season, and the significant spike in tea and herbals in 2020, there’s reason to believe that consumers will continue to want to manage their health from home. Living through the Covid-19 pandemic has solidified the market for immunity-strengthening foods, and even blurred the lines between supplements and grocery items. Plant-based and functional foods are here to stay, and wellness beverages, where tea plays a central role, are a trend that will accelerate even further at in 2021. We should expect to see more positioning of tea products as superfoods, pre- and probiotics, even with added functional ingredients like vitamin C, mushrooms, adaptogens and CBD. Consumers will continue to seek to foster a calm headspace and support their immune systems. Beyond these functions, look for teas targeting muscle health and anti-inflammation, heart health, energy balance and specific functional teas for men and women. Tea for everyday wellness will even extend to healthy hydration with tea, including matcha on the go.
3. Intelligent Data in the Retail Chain – Artificial Intelligence (AI) can now play a part in customising every online and in-store purchase. We’re seeing everything from chatbots to real-time prime adjustments and cashier-free checkout processes being used to keep pace with new consumer habits and zero in on efficiency in the shopping experience. What this means for tea is that both e-merchandising and in-store merchandising are now necessary. With less enthusiasm for in-store visits by consumers, brands need to be able to communicate a tea story as effectively online as they can in real life. This holds true for new products and incumbent brands alike. During the pandemic, consumers became more attuned to product health and ingredient claims. Packaging will contain more QR codes and blockchain information that can verify these claims, making both grocery and online shopping experiences better. Blenders notes, stories from origin, even videos of the producers and region the tea comes from, can now be made available to the customer while shopping.
4. Retaining Customer Loyalty – Retaining and cultivating customer loyalty has become more critical than ever. As the pandemic jolted consumers out of routine purchase behaviors, propelling online sales, home delivery and an unprecedented surge in consumer tea purchases, many shoppers tried new products and brands in 2020. The challenge for tea companies in 2021 is to encourage repeat purchases from these same customers. Cultivating customer satisfaction, whether in the form of loyalty programs and subscriptions, free samples or other perks, is critical for tea brands in this post-Covid shakeout. A McKinsey Periscope survey from August 2020 showed that although 40 percent of consumers tried new brands during the pandemic, just 12% of those shoppers planned to buy from the same brands in the future. Loyalty incentives, a strong core purpose, and social engagement that connects a brand with the consumer, are more important than ever. The global increase in online media usage over the past year, in turn drives the importance of social media in stimulating and cementing brand loyalty.
- Maria Uspenski is the founder and CEO of The Tea Spot, where her mission is to advance and empower healthy living through premium loose-leaf tea. Uspenski is also the author of Cancer Hates Tea and was recognized as a “Top Tea Health Advocate” by the World Tea Conference + Expo, where she is a frequent presenter. She’s been featured in leading media outlets for her success as a social entrepreneur and as a certified tea and fitness nutrition expert. To learn more, visit TheTeaSpot.com.
