![]() ![]() Herbals and botanicals are on the rise as consumers’ interest in functionality continues to trend upward. ![]() ![]() Consumers are driving the premiumisation of RTDs away from highly processed powdered extract-based teas onto more real brewed teas, effectively shortening the gap between the consumer and the tea leaf. This is indicative of the strong push towards more premium RTD teas and kombuchas. Refrigerated tea volumes have driven growth of the category with shelf-stable options remaining flat. This is primarily linked to the category being considered by consumers as a healthy option. RTD tea was one of very few categories to register growth in the USA 2020 v 2021 which shows YOY growth of 4% (1). Q: What are the trends for premiumisation in tea? This has helped to evolve the category to a less commoditised and value-driven space and offered brands a platform to experiment and further advance tea research. As they enter the workforce, they’re willing to pay the premium to brands which deliver on their expectations. Millennials have been a key force behind these drivers. More recently with the cold brew coffee craze, both coffee and tea brands are being directed to offer a complimentary cold brew tea platform. Innovation: The entrance of kombucha into a more mainstream market has paved the way for how tea is used by its enhanced functional benefits, driven by fermentation techniques. This helped to guide tea into more unconventional channels as cross-category development efforts increased. Tea emerged as a perfect canvas to deliver flavour infusions with mainstream brands experimenting with traditional and exotic flavours in their tea applications. Versatility: With a wide array of various tea types and the diverse nuances offered by each, tea has gained the interest from a more adventurous and well-travelled consumer who desires more innovative flavour combinations. Millennials have led the way in prioritising their loyalty to those brands who have incorporated these principals into their products. Sustainability: Dubbed as ‘ethical consumerism’, there is a clear movement of consumers who demand that brands offer transparency and traceability of their ingredients, accredited sustainability certifications and a more visible ‘story’ behind the brand. For consumers seeking more natural and clean label ingredients, tea plays a vital role. Other functional benefits have been associated with tea such as an immune system booster, improved digestive health, and increased focus through L-theanine (an amino acid which is also said to help ease anxiety, stress, and reduce insomnia). This, together with a growing demand in sugar reduction has seen tea rise in popularity due to its natural and functional properties, such as polyphenols (which deliver a rich dose of antioxidants) and natural caffeine. ![]() The Health Halo: Ingredients with a perceived ‘health halo’ continue to perform well with those looking to improve their wellbeing in a holistic way. There are a few drivers that have sparked this renewed interest: Steeped in tradition, tea has experienced an upsurge of popularity over the last decade across most major markets as consumers’ increased interest and understanding of tea in its many formats continues to evolve. Thanks to the expansive variety of flavours, functional benefits and applications across beverage types, tea is attracting a new generation of consumers – in particular the adventurous tastes of the health and environmentally conscious millennials and Gen Zs.Īnd let’s not forget that tea is the second most consumed beverage in the world. Q: What’s fuelling the diversification and premiumisation of the tea market? We spoke to Grant Cates, Tea and Coffee Category Manager, to tell us all about what’s been driving the premiumisation of tea, current trends and reading the leaves of tea’s future. ![]()
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