Sparkling tea: promising a future of unsweetened, healthy fizz

Copenhagen Sparkling Tea Company is capitalising on the revival of the cocktail culture

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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