The last two years have taken a severe mental toll on Americans. Euromonitor International’s most recent Voice of the Consumer: Health and Nutrition Survey shows that stress and/or anxiety are the most reported health issues among American adults today, followed by a closely related concern of sleeping problems. These restless and stressed consumers have important implications for the future of tea.
While not a cure, tea can serve as a valuable temporary oasis in a chaotic world. An opportune area in the U.S. market in the near future will be teas designed for relaxation and mindfulness. While many beverage categories are eager to address this growing consumer need, tea starts with a considerable advantage. Tea – herbal tea in particular – is already strongly associated with calming effects. Chamomile, for example, has been used as a calming ingredient in tea since the time of the ancient Egyptians, so herbal tea could be said to have been active in the calming functional space for millennia. Consumers hardly need to know this history to be familiar with the idea that chamomile, mint, valerian or other herbs promote a sense of calm – and there is a new wave of teas targeting this space.
The rise of relaxation blends is influencing the most important trend in American tea over the last decade: the continual gain of herbals at the expense of black. While tea becomes less caffeinated, other beverage categories are ramping up caffeine levels. Cold brew and nitro coffee are winning share; new energy drink brands like Bang are displacing existing market leaders; and even sparkling water brands like a-Ha and bubly are launching new caffeine-infused products. Tea is uniquely positioned for the calming space at a time when most other beverages are focusing on highly caffeinated offerings.
Tea sits at the intersection of three forces that formed the caffeine paradox (see euromonitor.com/video/the-caffeine-paradox) shaping American beverages today: strong demand for highly caffeinated products; growing concerns around the effects of excessive caffeine consumption; and a desire to find effective methods of calming. Certain teas are attempting to compete for high-caffeine occasions, but generally, tea is better positioned for relaxation benefits. As caffeine consumption grows, herbal teas will see demand grow as well to counteract and restore a sense of calm.
Other beverage manufacturers looking to appeal to mindfulness-oriented consumers are becoming more closely aligned to tea. Energy drinks, waters and coffees are formulating with additives like L-theanine, which is typically sourced from green tea, to provide a more subtle boost. L-theanine used to only be found in tea, but these new formulations could be a long-term challenge to the segment. Since L-theanine is naturally found in tea, brands and manufacturers should use this to their advantage in product marketing, especially as consumers seek natural products and clean labels.
Stress and anxiety levels continue to be at an all-time high. Tea can provide moments of quiet and calm amidst the turbulence. The American tea industry needs to prioritize products and blends that address mental health concerns. If done effectively, the mindfulness space will be the most dynamic in the U.S. tea industry for years to come.
Editor’s Note: Be sure to download the new World Tea white paper, “2022 Tea Industry Trends, Issues & Innovation.” The white paper features the article you’re reading now, as well as others like it. To download the free paper, CLICK HERE.
Hear more from Euromonitor International’s Matthew Barry at the World Tea Conference + Expo, co-located with Bar & Restaurant Expo, March 21-23. Barry will be speaking on “Changing Consumer Needs and the Opportunities for Tea.”
Matthew Barry is a senior beverages consultant with Euromonitor International. Based in Chicago, he’s the project lead for Euromonitor’s global hot beverages research and frequently writes and presents on changing demand patterns across the beverages space. Barry advises clients on how the impact of macroeconomic effects, lifestyle trends and other factors are influencing the beverage industry across the world, with a special focus on the United States. To learn more about Euromonitor International, visit Euromonitor.com.
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World Tea Conference + Expo, March 21-23, 2022
To learn about other key developments, trends, issues, hot topics and products within the global tea community, plan to attend the World Tea Conference + Expo, March 21-23, 2022. The event will be celebrating its 20th anniversary, in addition to being co-located with Bar & Restaurant Expo. Visit WorldTeaExpo.com.
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