EU and UK Experience Botanical and Herbal Tea Boom

The popularity of botanical and herbal teas across Europe and the United Kingdom is steadily growing due to their high functionality and a stable demand for healthy lifestyle among local customers, according to representatives for producers and independent analysts.

The Covid-19 pandemic has led to a significant growth in demand for functional beverages in the ‘Old World’, particularly those which can ensure a positive response to immunity, stress, sleep management, vitality, and cognitive function. Some of the most popular functional beverages are botanical and herbal teas. Most of analysts expect the demand for them in the EU and the UK will be steadily growing in years to come ,which will provide additional opportunities for growth for the majority of industry’s players.

As the demand for botanical/herbal teas is rapidly increasing in most EU countries and the UK, many of herbal tea producers and suppliers are considering a further expansion of their portfolios and increase of their output this year.

Steve Scott, general manager of Finlay Botanicals, a global botanical and herbal extracts supplier, informed T&CTJ about the company’s plans for its further development and expansion of its range for the coming months, as the demand for the company’s range rises.

“Launched in 2020, Finlay Botanicals, part of the Finlays group, aims to help brand owners tap into the rising global demand for traceable, sustainably sourced botanicals. Situated next to our tea farms in Kenya, Finlay Botanicals offers a range of botanical products, all of which are 100 percent traceable back to origin, and sustainably produced,” said Scott. In 2022, we launched four new products: chamomile and fermented blackberry leaf in our conventional range, and in our organic range, peppermint and lemongrass. We have also started producing a dark red hibiscus product which we plan to launch early in 2023.”

Image: Finlays

In terms of market prospects, Scott expects the fruit and herbal infusion market in Europe is forecast high growth of +9 percent between now and 2025 tapping into consumer demands for good-tasting, healthy and functional beverages. Scott said that having been accelerated by the pandemic, “we anticipate these trends remaining a major driver for consumers through 2023 and beyond, with botanicals such as chamomile and mint appealing to over half (56 percent) of European consumers who believe that botanical and plant extracts have a positive impact on their health.”

Expansion plans have also been recently announced by US-based Harney & Sons, a leading American tea company that specialises in high-quality loose teas and herbal teas.

“We’ve launched quite a few new herbals and wellness teas, especially during the COVID pandemic,” shared Emeric Harney, an official spokesman for Harney & Sons. “We will continue to observe the market and stay tuned to it as there has been some consumer retrenching.”

Other interviewed analysts and producers expect the UK will be at the forefront of the demand for herbal and botanical teas in the whole Europe in years to come.

Andy Byron, trade marketing and training manager of UK-based teapigs, said that in the UK, English Breakfast Tea is a must as this will be most people’s ‘go to’ tea. “But more and more people, however, are drinking green and herbal teas and there is a definite shift towards people choosing functional drinks throughout the day particularly among younger consumers–things like our feel good range or kombucha drinks are ideal for this.”

Byron added that many people are swapping a morning coffee for drinks which are naturally caffeine free, like herbal infusions, or lower in caffeine such as the popular matcha green tea powder so it’s important to offer these types of products. “People also want ways to top up their water levels during the day, making items like our cold brews perfect items to stock. What started as a health and wellness trend is now a full blown movement and will certainly continue for years to come.”

Botanical Tea Sales Blossom

According to analysts at US-based consulting agency, Future Market Insights, Inc(FMI), this year the global herbal (botanical) tea market is expected to reach USD$3.7 billion in value terms, with the EU and the UK accounting for a significant share of the market.

Per their forecasts, within the next nine years the annual growth rates of the market will reach 7.1 percent (compared to 5.5 percent during the period of 2016-2021). While the Asian region and other developing nations will demonstrate the biggest growth rates, the growth of the market will be also observed in developed European nations although at lower rates. One of the major drivers for growth will be the ongoing rapid aging of population in the Europe, which will contribute to escalating cases of arthritis, cardiovascular, osteoporosis and other diseases.

In this regard, FMI analysts, and other interviewed experts, believe the popularity of botanical and herbal teas will be growing, which will be mainly due to its healthy properties, will enable them to replace traditional teas in the market. Additionally, the rise in consumption of instant tea is also driving the growth of the botanical and herbal tea industry.

Image: teapigs

In terms of market growth, the biggest growth rates are expected to be observed in green tea market, as it is perceived that green herbal tea is healthier and more suitable for young adults in the market which is why market demand for green herbal tea is growing.

FMI analysts also note that during the assessment period of 2022-2032, demand for ginger herbal tea is expected to grow substantially. Over the forecast period, ginger herbal tea is projected to account for the majority share of the revenue generated by the tea market.

Experts also note that the level of competition in the EU and the UK botanical and herbal teas market will be intensifying in years to come. The list of leading players will include such companies as AB Food and Beverages, Tata Global Beverages, Martin Bauer Group, Nestea, Unilever, Buddha’s Herbs, Green Earth Products Pvt Ltd, Mothers Parkers Tea and Coffee Inc, Global Herbitech, Typhoo India, Rooibos, The Feel Good Tea, Ashford Tea, Silver Leaf Tea, Waku, Opteamal, and others.

However, FMI analysts point out that the existing perception of botanical herbal and tea as a high-end, premium product will be one of the major growth restraints of the industry in the coming years, as consumers search for alternative options like traditional teas or other beverages.

Dr Sharon Hall, chief executive of the UK Tea & Infusions Association said that as people returned to workplaces and social venues after the pandemic lockdowns, the share of food service spend at quick-service restaurants (QSRs) increased from 24 percent to 45 percent, whilst the supermarket share of spend dropped from 23 percent to 8 percent.

She said this also impacted in-home tea consumption, which had increased significantly during the 2020 lockdown, with the value of total tea purchased at retail (including Herbal and Fruit Infusions (HFI) decreasing by 4.4 percent (2021 versus 2020) to just under £696M. According to her data, true tea sales value fell by over 6.0 percent to £578M. However, decaffeinated tea did continue to grow in value (1.3 percent) to almost £68.5M and the HFI category, including Rooibos, also grew by 4.5percentduring the same period, to almost £118M.

“This continued growth can be attributed to the perception of the health credentials of HFI, as the self-care movement continues to grow. Consumers of HFIs tend to be younger and more affluent than the average for standard black and green tea, with similar demographics to roasted and ground coffee shoppers,” said Dr Hall. “Benefit blends are the fastest growing segment, now equating to 34percentof the HFI category. As observed in the previous year, traditional HFI flavours still dominate the category (peppermint, lemon and ginger, and chamomile). New flavours appearing are much more unique to brands with combinations chosen because of their benefits. The top performing benefit for most brands is sleep.”

When it comes to new products, specifically new herbal blends, Dr Hall said innovation may well be borne out of the very latest research. “The Tea Advisory Panel (TAP) has published several pieces of research, including a systematic review on the health benefits of hibiscus tea. This showed primarily the benefits of hibiscus tea in lowering blood pressure. Its flavour, whilst enjoyable to some consumers, also blends well with other herbs such as rosehip, so we’d expect to see more hibiscus blends.”

She shared that a TAP paper on specific herbal teas evaluated the health benefits of chamomile, rosehip, and spearmint in women. Chamomile tea is popular for reducing stress and anxiety (benefits TAP found in their review) but preliminary evidence also shows potential benefits in glucose and insulin control. “Whilst peppermint tea has long been popular, we’d expect spearmint tea products to grow too. Spearmint has a somewhat different health profile to peppermint in that TAP research found benefits in terms of pain and stiffness. TAP also found that German chamomile, rosehip, and spearmint have benefits in menstrual issues such as menstrual pain, hormonal control, and menstrual stress,” said Dr Hall, adding, “Earlier TAP research also found that lemon balm is associated with reduced oxidative stress. In fact, all herbal teas are rich in antioxidants with potential anti-inflammatory properties making them a useful drink in contributing to prevention of inflammatory conditions such as heart disease and contributing to cardiovascular and metabolic health.”

According to Hall, standard black tea still accounts for almost 60 percent of the tea category by value and the UK still ranks in the top five tea-consuming counties (per head) in the world, alongside Turkey, Libya, Morocco, and Ireland (per the International Tea Committee, 2020).The 2021 UKTIA omnibus survey, found that most people drink tea, with regular black tea being the most popular (86 percent) followed by green tea (44 percent). On average, three to four cups of tea are consumed daily, which makes the UK the biggest tea drinkers in Europe after Ireland.

Dr Hall further explained that while some people drink tea simply to quench thirst, greater numbers are recognising its effects on the brain and mood. More than a third (35 percent) say the comfort they receive from drinking tea helps combat frustration, while eight in 10 reach for tea when they get stressed. One in ten say even the action of putting on the kettle is a good way to destress, and nearly six in 10 (58 percent) say tea relaxes them.

She added, “Studies show that the ritual of making a cup of tea, combined with the biological effects of drinking tea, help to boost our mood, reduce stress and improve concentration levels. “Trends and growth in food are often borne out of the very latest health and wellness research, especially with the nation trying to get ‘health fit’ post the pandemic. TAP research as detailed above, shows health benefits of a range of herbal teas–hibiscus, chamomile, spearmint, rosehip, lemon balm, to name a few–and we’d expect these health benefits to be picked up for new products,” said Dr Hall. “Red bush (rooibos) tea consumption seems to benefit the lipid and oxidative profiles of those at risk of cardiovascular disease. It also appears to possess other promising ‘general’ effects on glycemic control, bone, liver, cognitive and respiratory health. Red bush tea has increased in popularity and we’d expect that popularity to grow, and possibly in more blends such as red bush and hibiscus.

  • Eugene Gerden is an international freelance writer, who specializes on covering of global coffee, tea and agricultural industry. He worked for several industry titles and can be reached at [email protected].

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