Original functional beverages coffee and tea keep getting better

Old standbyes coffee and tea may be the original functional beverages, but even these timeless beverages are getting a 21st century makeover.

Alex Smolokoff, Editorial coordinator

November 24, 2020

8 Min Read
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It’s easy to think of functional beverages as a 21st century craze. And it’s certainly true that over the last decade or so, beverages that promise something beyond hydration have proliferated the market. But functional beverages aren’t a new craze at all; humans have been drinking them for thousands of years in the form of coffee and tea, and these two stalwart brews are still going strong in 2020 and beyond.

Tea is known to have been consumed for its natural functional attributes since as far back as 1500 BC; coffee dates back hundreds of years to the 15th century. The functional attributes of these beverages were apparent immediately; as one legend has it, Moroccan Sufi mystic Ghothul Akbar Nooruddin Abu al-Hasan al-Shadhili discovered coffee after noticing unusual vitality in birds eating the berries of a coffee plant. After eating some himself, he experienced the same. A similar tale exists about the discovery of tea; one legend states Chinese Emperor Shennong drank from a bowl of boiled water into which leaves from a nearby tree had blown and found himself to enjoy both the taste and restorative properties of his new creation.

Legends are, of course, just that, but within any legend is a kernel of truth. The kernel here is clear: The natural functionality of coffee and tea has always been appreciated by those who drink it. Whether it be a kick of energy, some relaxation before sleep or something to settle an uneasy stomach, coffee and tea can provide those benefits. And, a few centuries later, the list of functional attributes in the coffee and tea we drink is only getting longer thanks to advancements in innovation and technology, not to mention a consumer base growing ever more demanding as well as cognizant of everything from where their favorite brew is grown and harvested to how it’s packaged and served. Nowadays, with the help of ingredients like protein, pre- and probiotics, plant-based creamers and more—plus advancements in textures and preparations—coffee and tea can do more for us than ever before.

Old standbys stay popular

They may be the oldest functional beverages, but coffee and tea aren’t going anywhere any time soon. If anything, the demands of daily life—combined with the still-developing effects of the COVID-19 pandemic—are leading to even more demand for these favorite brews. According to Research and Markets, the global coffee market is anticipated to reach US$134.25 billion in 2024 with a compound annual growth rate (CAGR) of 5.3%. That growth is even greater in the U.S., where Mintel reports the coffee market is worth $15.1 billion and expected to grow 22.7% through 2024. Though slowed by the decrease in on-the-go occasions in the current COVID world, ready-to-drink (RTD) has, to this point, been the fastest-growing segment—a reflection of the way today’s busy consumers take in their brew.

Tea is also getting in on the growth; Grand View Research found the global tea market was worth $12.63 billion in 2018 and expected to expand at a CAGR of 5.5% through 2025. In the Asia-Pacific market especially, trendy and Instagram-able tea drinks have exploded in popularity over the last few years. According to Euromonitor International, two upscale café chains in China— HeyTea and Nayuki—experienced a CAGR of 53% and 358%, respectively, from 2015 to 2019.

What’s old is new again

While coffee and tea remain global favorites, we’ve also come a long way from bitter, black, boring morning brews. Consumers want function, but they also want flavor, texture, color and everything else about their beverages to be an experience. Even in the birthplace of tea, the centuries-old drink is getting a makeover. Brewed from high-quality tea leaves mixed with other ingredients and toppings, such as fruit and whipped cheese, new-style tea drinks are popping up throughout the Asia-Pacific region. In the U.S. and elsewhere, consumers are experimenting with texture as well; Starbucks can serve up a cloud macchiato or a nitrogen-infused cold brew. Or, consumers can skip the line and grab any of several “nitro” brews available on store shelves and ready for consumption.

“Nitrogen infusions are popular in RTD coffee and tea because they add a creamy, velvety mouthfeel that can enhance the perception of sweetness and add textural complexity without adding calories,” said Holly McHugh, marketing associate at Imbibe.

And, if creamy isn’t one’s style, perhaps sparkling is. “The sparkling water boom that we’ve seen over the past three years was driven by consumers seeking less sugary versions of carbonated soft drinks [CSDs],” said KC Kuder, marketing communications specialist for Synergy Flavors Inc. “This trend naturally shifted into other beverage segments, innovating juice and alcohol categories, and is now hitting coffee and tea products.”

Innovation is also launching off solid trends within coffee and tea. Grand View Research reported the global cold brew market was worth $33.97 billion in 2018 and is expected to have a CAGR of 25.1% from 2019 to 2025. Flash and snap brews—similar in concept to cold brew, with the coffee quickly cooled after brewing—are now gaining traction, McHugh noted on page XX. She also pointed to the growing popularity of coffee concentrates for homemade lattes, cappuccinos and more.

Added functionality

Of course, coffee and tea gained their initial popularity because of the functionality they provide. Both naturally contain caffeine, and certain teas can promote relaxation, digestive health and more. Today, however, consumers are even more demanding, and a simple dose of caffeine isn’t enough to stand apart in the crowded market. This has led to breakneck innovation when it comes to added functionality.

At Virginia Dare, as Melissa Kvidahl Reilly detailed on page XX, dark berries like acai, elderberry and goji are trending tea add-ins thanks to their established antioxidant content. Other trending functional ingredients finding their way into tea include CBD, matcha and added vitamins and minerals.

In the coffee realm, caffeine augmentation is gaining steam as consumers look for an even bigger morning or afternoon pick-me-up. “The average cup of coffee has only around 85 mg of caffeine,” Brian Zapp, creative director at Applied Food Sciences, stated, “while the target for most RTD [cold brew] is around 100 to 150 mg of caffeine.” Ingredients like barley are also popping up in coffee drinks as a source of added protein. In addition, for a boost of mental clarity, nootropic ingredients like omega-3 fatty acids, L-theanine (green tea is already inherently rich in this) and lion’s mane mushrooms are gaining traction.

In both coffee and tea, other functional ingredients continue to emerge. Brands like Inner Life! are adding prebiotic fiber such as arabinoxylan to tea options. As Hannah Ackermann wrote on page XX, unpublished research showed the ingredient to be well-tolerated and gentle on the stomach, even at a dose of 12 g/d, without causing the gut discomfort, excess gas and bloating associated with other fiber sources, such as inulin (FEMS Microbiol Ecol. 2009;69[2]:231-242). In addition to prebiotics, adaptogens like ashwagandha, ginseng and reishi mushroom can be found in coffee and tea drinks.

What’s next for coffee and tea?

At the current rate of innovation—and given they’ve held strong for the last handful of centuries—coffee and tea are on track to maintain their staying power. But for brands to capitalize on the inherent popularity of these beverages, knowing where the market will go is paramount.

Offering delicious and healthy beverages may no longer be enough to satisfy ever-conscious consumers. Coffee especially has a well-known and too-often-ignored history of being harvested on the backs of underpaid and mistreated farmers. Brands would be well served to ensure any coffee beans used in their products are fairly grown, either through Fair Trade certification or other programs. Additionally, conveying that message loudly and clearly on packaging will make it easy for consumers to purchase guilt-free.

It’s also important to recognize the ingredients consumers are not seeking in their beverages. Standard table sugar may once have been a go-to addition to a cup of coffee or tea, but today’s consumers are more wary of sugar than ever before. To achieve the same sweetness consumers expect from that latte or iced tea, low- and no-calories sweeteners like stevia, erythritol, monk fruit and honey are all popular choices to replace sugar and artificial sweeteners.

Another common coffee and tea add-in, creamers are also getting a makeover. Dairy-based milk and cream and often being replaced by plant-based versions, perfect for the growing number of consumers avoiding dairy for ethical, environmental or health reasons. Almond, cashew, macadamia, coconut and, increasingly, oat are all popular bases for nondairy creamers, sold both separately for at-home occasions and in RTD coffee and tea beverages.

And, of course, no discussion of any industry these days would be complete without mention of COVID-19 and the environment it has created. The days of sitting down for hours in the public space afforded by a café are, at least for the time being, over. On-the-go occasions in general have decreased with so many people now working from home and otherwise avoiding public spaces. As such, at-home preparations have increased. As Geri Berdak wrote on page XX, “Multiserve packaging, bag-in-box and cold brew concentrates are all packaging options that will encourage in-home consumption” while consumers remain more or less locked down. She also mentioned the opportunity for RTD coffee and tea brands to take advantage of the “permissive indulgence” consumers are seeking by incorporating more dessert-inspired flavors.

Whether at-home, on-the-go or—when the world returns to a sense of normalcy—in the comfy atmosphere of a neighborhood café, coffee and tea are on track for another several centuries of consumption. But it’s clear the days of forcing down bitter, boring brews are over and innovative, functional pick-me-ups are in. Even old standbys need the occasional makeover, and coffee and tea are in the middle of their most extreme one yet.

To view this digital issue in full check out A new kind of brew: Innovations in coffee and tea – digital magazine.

About the Author(s)

Alex Smolokoff

Editorial coordinator, Informa

After a career in sportswriting, Alex Smolokoff was on the editorial team at Informa Markets from December 2018 through spring of 2022, working on Food & Beverage Insider. In his free time, he enjoys watching his hometown Boston sports teams.   

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