Tea and coffee Tea and coffee are the third-biggest selling beverage category in Europe, following alcohol and soft drinks, accounting for USD71 billion in sales in 2019.24 Both coffee and tea are widely consumed, but coffee is preferred in most European countries.25 Although coffee consumption is high, it is not a dynamic market for innovation.26
Beverages expenditure by category Western Europe, 2019 $bm $303
Alcohol
$119
Soft drinks
$71
Hot beverages
$50
Nutritional beverages Ready to drink Milk shakes Dairy alternatives
$8,4 $4,1 $2,9
Source: Foodtrending, presentation at Fi Europe CONNECT 2020, “Which ingredients are trending in beverages?”27
However, the market for ready-to-drink tea and coffee is another story, as consumers increasingly seek premium products.28 Despite much lower sales, ready-to-drink tea and coffee products are booming, with 3.9% growth in 2019, well ahead of the 1.3% beverage industry average.29 The use of botanical ingredients is also expanding in ready-to-drink teas, as in soft drinks more broadly, and the Healthy Marketing Team also highlighted adaptogens as being promising ingredients for mental wellbeing, particularly in tea.30 These refer mainly to botanicals and fungi that are thought to help the body adapt to demands placed on it by internal and external stressors.31 Aurore de Monclin, Managing Partner, Healthy Marketing Team said that;
“We see that adaptogens are here to stay. A couple of years ago we would have talked about nootropics, but now we are talking about adaptogens because there is a strong tradition behind adaptogens, and now they are moving to the west.”32 Proponents suggest certain adaptogens for particular desired effects such as Asian ginseng,33 holy basil 34 and ashwagandha35 for long-term stress, while small studies have linked speciality mushrooms to immune response.36 Such ingredients are emerging as an important area for premium teas, often alongside other botanicals and in adaptogenic blends, or with CBD oil and ayurvedic ingredients.37 De Monclin added that:
“Credible ingredients with strong links to traditional herbal remedies, such as adaptogens, will have more mainstream appeal.”38 According to Transparency Market Research, adaptogens could reach a market value of about USD23.4 billion by the end of 2030.39
Beverages in Europe 2021 | 7
