Coffee and tea have grown exponentially in recent years, and researchers expect that momentum to continue. A Markets and Markets report estimates ready-to-drink (RTD) tea and coffee market sales reached $69 billion during 2011. The firm predicts segment sales will reach $125 billion by 2017, while it grows at an estimated compound annual growth rate of 10.9% from 2012-2017. Although Asia-Pacific may be the largest market, study authors believe North American demand for RTD coffee, in particular, will rise “due to an increase in health awareness and ill effects of carbonated drinks.”
That sentiment echoed an NPD Group survey, which found 18- to 24-year-olds turning away from caffeinated sodas and turning to coffee as their energy-boost beverage of choice. In 2002, 25% of the 18-24 demographic reported drinking coffee at some point within a two-week period. In 2012, the percentage drinking coffee within that same time-frame jumped to 39%. Studies linking the beverage to a range of positive health benefits could be one of the supporting factors.
Tea sales also are rising, along with the number of studies purporting its healthy benefits. Mintel International forecasts global tea sales will grow 50% between 2011-2017, with tea experiencing 5% growth in the foodservice sector and 10% growth in retail during the next five years.
IBISWorld estimates similar tea growth in coming years but does warn that uncertainty abroad could impact sales globally. However, the “emphasis on healthy living is changing consumer dietary patterns, helping to drive the industry’s growth,” according to IBISWorld.
In addition, the tea segment has successfully diversified into many different flavors and varieties. For example, Inko’s LLC was well established in the low- and no-calorie, ready-to-drink white tea segment. Last year, the company made its first foray into non-white tea varietals with Mango Passion Fruit Rooibos Tea, Citrus Black Currant Oolong Tea and Half and Half Green Tea with Lemonade. In conjunction, Inko’s likewise broke new ground in its product packaging: Its new offerings come in 15.5oz recyclable aluminum cans.
Inko’s green tea option also could benefit from research out of Vanderbilt-Ingram Cancer Center, which found green tea can help decrease the rate of some digestive system cancers, particularly cancers of the esophagus/stomach and colorectum. The risk for all digestive system cancers combined was reduced by 27% among women who had regularly consumed green tea for at least 20 years. Similarly, long-term tea consumption patterns could help prevent ovarian cancer. A two-year study of 1,000 women and published in the journal Cancer Epidemiology discovered that the women without cancer were more likely to be tea drinkers from an earlier age than those diagnosed with the disease.
New tea introductions in 2012 included a number of varieties attempting to take health a step further with functional attributes. Zhena’s Gypsy Tea added five functional teas: Renew Me (a cranberry ginger tea for detoxification); Relieve Me (an herbal laxative tea with an apple cinnamon flavor); Calm Me (a sleep-aiding tea with a coconut vanilla); Slim Me (a raspberry mint flavored tea positioned as a diet aid); and Soothe Me (honey, lemon and ginger tea promising throat and cold relief).
Company founder Zhena Muzyka explained, “When we looked at the current medicinal tea category, we discovered a gaping hole in flavored teas with serious function. We took truly effective herbal formulas and added delectable flavor profiles to them.”
Zhena’s also added three fair trade chai concentrates: Classic Chai Tea Latte, Caramel Chai Tea Latte and Coconut Chai Tea Latte. The blends include an infusion of organic fair trade-certified black tea and water, cane sugar, honey, organic agave nectar, vanilla, spices, natural flavor and citric acid.
A new take on chai also debuted from Tea India, a consumer brand of Harris Tea Co. Tea India Chai Moments are instant tea mixes intended for on-the-go consumption. Three new flavors include Masala, Cardamom and Ginger. Found in South Asian markets in the U.S., Chai Moments promise the “authenticity of Indian chai flavors with natural spices and no preservatives.”
Juicy News
When it comes to beverages that consumers perceive as natural, few entries can match juices. Nevertheless, the juice segment has faced a challenge regarding public concerns about sugar. Combating this issue head on, Honest Tea reformulated its Honest Kids fruit-juice-sweetened line of beverages in 2012. In doing so, the company updated all five varieties, removed the organic cane sugar and increased the juice content. Line offerings now contain between 30-42% juice, an increase of 12-26%, depending on the variety. The calories remained the same: 40 per 6.75oz pouch.
In expanding its V8 line of vegetable juices, Campbell Soup Co. went for a bolder flavor approach, adding such varieties as a Hint of Lime and a Hint of Black Pepper. As with V8’s other 100% vegetable juices, each new item promises two full servings of vegetables in each 8oz glass.
Complex Beverage LLC leverages a vegetable some may not have expected. The company’s new Lettuce Tea brand features an extract of lettuce, praised by some health professionals as an outside-the-box approach to a vitamin-enhanced beverage, with research pointing to its role in metabolism reinforcement and enhanced immune system strength. The company claims the drink—available in Peach Mango, Strawberry Banana and Exotic Apricot flavors—is the only all-natural, low-sugar, low-calorie functional tea beverage endowed with lettuce extract attributes and vitamins.
Lettuce Tea is not the only product promising natural flavors, however. Coca-Cola’s Fuze brand expanded with a new line of iced teas and juice drinks. The bottled teas contain blended natural flavors, and they promise to be a good source of vitamins B6 and B12.
“Fuze taps into consumers’ desire for great-tasting refreshment, appealing to both Millennials (ages 18-34) and the fast-growing multicultural population segment,” noted Bill Medbery, director, strategy and development, Coca-Cola Refreshments. Medbery cited Harrison Group, RTD Tea Segmentation data.
Functioning Well
One of Coca-Cola’s more interesting new products debuted overseas. Coca-Cola joined French drug manufacturer Sanofi to develop and launch Beautific Oenobiol, a line of “beauty drinks” to assist with weight loss and provide other health benefits. Last October, the Wall Street Journal reported that the four Oenobiol drinks are made with mineral water, fruit juice and nutrition additives. The products carry claims that they will “help strengthen hair and nails, embellish skin, lose weight and improve vitality.”
Stateside, the company announced another foray into the mid-calorie soda segment. Testing last summer were Sprite Select and Fanta Select, each made with a blend of sugar and other sweeteners, including a stevia variety and erythritol. Each had 70 calories per 12oz can, compared with 140 and 160 calories in regular Sprite and Fanta, respectively.
