Coffee and tea have leading roles in 2023 beverage trends
Grand Brulot & Teatulia
As part of its annual Global Beverage Trends Report, leading B2B tea, coffee and botanical solutions provider Finlays has outlined five key trends which it believes will shape natural beverages throughout next year — and beyond:
- Selective Spending.
- Mindful Drinking
- Mood-Boosting Beverages
- Crunch-Time for Carbon
- Retail Reimagined
“The events of the last twelve months feel just as seismic as the previous twelve, with continued volatility in global economics, supply chains and politics continuing to cause major changes in how consumers purchase beverage products,” said Sian Edwards, Finlays’ group insights manager, in a statement introducing the report. “Globally, consumers are seeking to make good choices for the planet, and for themselves. While we expect to see belts tightening, we’re also already seeing the return of the beverage as an ‘affordable indulgence’, creating opportunities for innovation and value creation. Consumers’ continued interest in healthy and sustainable beverages is also an important opportunity for brand owners.”
In this blog, I will focus on just two of the trends: Mindful Drinking and Mood-Boosting Beverages.
Regarding the ‘Mindful Drinking’ trend, Finlays notes that millennials and Gen Z are drinking alcohol less – and more mindfully – than previous generations. The research finds that 25% of millennials globally find alcoholic drinks with low/no alcohol ‘very appealing, while 18% of global consumers only drink alcohol when socialising, increasing to 23% of Gen Z (per a GlobalData 2022 consumer survey). There are several interconnected factors changing the way younger consumers engage with the alcohol sector, as terms like ‘sober curious’, ‘mindful drinking’ and ‘Cali sober’ become part of the zeitgeist. The report further states that for many younger consumers, this trend is simply about making conscious and positive choices, without having to compromise on experience. There is a desire to reduce alcohol consumption and respect individual choices.
These two groups are also much more receptive to new beverage concepts, spurring the development of new niche and hybrid categories. The beverage industry has been highly responsive to changing consumer behaviour, with innovations spanning the alcohol-alternative, low -alcohol and RTD alcohol categories looking to capture share in this fast -growing market segment.
Tea and coffee ingredients are central to this trend with brands looking to create healthy/functional alcohol alternatives. Consumers are not only be avoiding alcohol, but also increasing consumption of ‘healthy’ or ‘functional’ ingredients such as CBD, l-theanine, antioxidants when they choose not to drink (T&CTJ covered the growth of functional coffee and tea beverages in multiple articles in 2022 alone and will cover them again in 2023).
We have also been seeing coffee and tea being used as the base for a growing number of cocktails or ingredients in them, most recently writing about it in our December issue in the article “The Merging of Similar Mindsets” (see: Tea And Coffee Dec 2022 (flickread.com)). “Tea and coffee both have layers of flavours which can be used to bring out notes in the alcohol or to transform the alcoholic experience,” said Jeff Cioletti, editor in chief, Crafts Spirits Magazine, in the article.
Finlays also reports that in the highly competitive hard seltzer market, brands are looking to differentiate with new hybrid products, combining the ‘health halo’ and accessibility of tea with premium branding.
In terms of the ‘Mood-Boosting Beverages’ trend, after the challenges of the Covid-19 pandemic, and with financial pressure mounting, consumers are increasingly looking to ease their stress with products that support mental wellbeing. These range from products that create a sense of treat and relaxation, to those that promise functionality — beverages can be central to this trend (all which T&CTJ has also covered extensively over the last few years). The role of hot tea and infusions in moments of relaxation is prevalent in most cultures globally, while caffeinated beverages such as iced coffee are often consumed for a different, more active, boost.
The Finlays report – along with scores of other research – finds that as consumers grapple with life in a post-pandemic world, facing a rising cost of living and environmental crisis the need to prioritise mental wellbeing has never been greater. This is driving demand for products that claim to support the full spectrum of mental wellbeing needs, from stress relief, relaxation and sleep through to energy and focus.
This need for relaxation and productivity is fueling innovation in the beverage industry. To support the rest and relaxation need, beverage brand owners are developing products that create an emotional connection with consumers. Hot tea and infusions are strongly aligned with this occasion for consumers around the world. Product functionality is a growing aspect of this trend. Since 2017, the number of beverages launched with a ‘brain or nervous system’ claim has increased +41%, versus a 1% increase in the total number of beverage launches (per Mintel GNPD, soft and hot beverages (excluding alcohol) launched globally 2017-2021). Products are claiming to support brain functionality, sleep and stress-relief through inclusion of ingredients such as green tea, matcha, coffee, l-theanine and botanicals. It is important to note that these products are ‘claiming to support…’— they do not have evidentiary support from regulatory bodies.
As the link between gut and brain health becomes increasingly established (it is believed that 95% of serotonin – the ‘good mood hormone’ – is produced by gut bacteria, per Ketchum Consumer Mental Health and Nutrition Trends Food Mood Connection 2022). According to Finlays’ report, we can expect to see products that link cognitive function with gut health enter the mainstream as consumers look for different and more effective ways to improve their mental wellbeing — and we will likely see more coffee and tea brands launching products to target this sector.
The full report is available via www.finlays.net/about-us/global-beverage-trends-report.
As we approach the end of 2022, best wishes for a happy holiday season and a healthy new year! Cheers!
- Vanessa L Facenda, editor, Tea & Coffee Trade Journal.
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