Aside from water, coffee and tea are the most-consumed beverages in Canada. With the market constantly changing and today’s consumers looking for certain things when selecting a beverage, a new report has assessed ongoing tea and coffee trends across the country.
A collaboration between Technomic, Restaurants Canada, the Coffee & Tea Association of Canada, and the Tea & Herbal Association of Canada, the report notes that despite the pandemic, the global coffee and tea industry is expected to grow nine per cent annually, from about $150 billion to a staggering $191 billion in 2023.
These projections are partly driven by a foundational change in consumer culture spurred by a radical shift in the lifestyle priorities and spending habits of Millennial and Gen Z consumers. Analyzing tea and coffee trends, the report found these two beverages are uniquely positioned to benefit from all three high-level value points: integrity, wellness, and discovery.
Coffee remains the most-consumed beverage in Canada, with 71 per cent of Canadians enjoying it daily according to Technomic data, and not just as one cup in the morning.
On-premises coffee sales declined during the pandemic with many facilities shut, but Technomic is confident of a favourable return in the near future.
The report outlined some key trends that are defining the coffee market right now:
Factors such as bean transparency and ethical sourcing are no longer just ideals but core brand selection criteria for these consumers.
As more consumers demand socially and ecologically ethical products and
services, traceability technologies for coffee beans are being used by both
quick-service restaurants and consumer packaged goods brands to offer more transparency about the sourcing of their products. The report cites as example Starbucks’ ‘Trace Your Coffee’ feature, where consumers can
scan the brand’s coffee products’ batch codes to learn about the item’s
Ethical sourcing practices and bean transparency can often result in higher price points, but consumers—particularly younger coffee enthusiasts—are willing to pay more in return for confidence in their purchase.
Though consumers still turn to caffeine for an energy boost, they’re also more aware of how it might negatively affect them when consumed in high doses. This has brought on a slew of beverages that promise caffeinated boosts and ingredients that advertise stress-reduction, allowing consumers the best of both worlds when it comes to consuming coffee and other caffeinated beverages.
Data from the report shows that consumers are looking for new ways to make their coffee more health- and sustainability-focused, too. The fastest-growing coffee ingredients are plant-based dairy (+300 per cent), oat (+250 per cent), and maple syrup (+150 per cent). Natural sweeteners, coffee cocktails and blended, shaken, and stirred iced drinks have also grown in popularity.
Technomic survey data shows that younger demographics consume
elevated hot coffee beverages, including cappuccinos and lattes, more frequently than consumers aged 35+, a trend mirrored in the less-popular cold coffee segment.
An experiential offering
The report notes that coffee shops offer distinctive customer experiences geared around convenience, culture, and community. Establishments are increasingly inviting guests, particularly younger demographics, in for a full experience. This includes a closer connection to coffee, driven by a growing demand for product knowledge.
Meanwhile, following online trends and customizing recipes on-premises is a great way to refresh offerings and draw in new customers. And, with many consumers having become more accustomed to preparing coffee at home and experimenting, innovating in flavours and beverages that are more difficult to replicate at home will be critical for operators.
Tea is having a moment.
It is the third-most-popular beverage in Canada, with 48 per cent consuming it daily, according to Technomic’s data. 55 per cent of Canadians says they drank more tea for its feelgood, comfort, and relaxation qualities.
With consumer demand for healthier, low-calorie, and wellness-enhancing beverages increasing and showing real staying power, and people beginning to venture outside to reconnect, it may finally be tea time.
Health, comfort, and versatility
Most consumers look for the type of tea, the flavour, and the presence of natural ingredients when deciding upon a tea to drink. Earl Grey, chamomile, and peppermint are the flavour leaders, with chai and apple cinnamon not far behind.
Part of tea’s strong appeal is that not only are its health benefits well-documented, but it is a comforting beverage that is so versatile. While black tea is most popular among older Canadians, consumers enjoy everything from summery citrus tea to herbal tea to wintry hearty tea. Plus, tea also lends itself very well to use in cocktails.
Bubble tea’s popularity in North America and Asia has grown in
recent years, and now fans of this popular and flexible drink are increasingly testing at-home recipes with the help of brands. The report cites Tru Bubble Tea in Toronto as one company that is helping customers enjoy bubble tea in the comfort of their own homes by selling various flavours in bulk.
The health benefits of steeped teas are already known by people worldwide and some brands are now elevating their offerings in the midst of excessive competition in this industry. Steeped teas that are infused with additional nutrients are becoming increasingly common as consumers seek out unique products in this space. Canadian brand Everie is one example, offering various steeped teas infused with CBD.
Overall, whether we’re talking tea or coffee, key for foodservice operators will be to be bold with innovations and experiments in the beverages they offer, all while creating an inviting and lasting in-person consumer experience as well as offering convenience for off-premise consumption.
Read the full report here.