The Shifting Landscape of Premium Tea

The way consumers are engaging with beverages is changing. In the U.S. market, the macro trend of premiumization continues to drive growth, and tea is no exception. From RTDs, through Foodservice and into home brewing techniques, the category dynamics are shifting. We can expect to see more products and ingredients that are trusted and clean, yet exciting with a whole lot of added value.

In tea this means consumers are being drawn to new products that claim better, more authentic tea brewing techniques and a truer tea experience where the tea itself is the hero. As consumers seek a greater understanding of supply chains and manufacturing processes, more education and storytelling around the origins of tea is needed.

In a recent survey of US Millennials consumers, 86% of those polled always or sometimes purchase premium or luxury soft drinks, and 28% are specifically looking for a unique story and willing to pay a premium for it. Finlays is the most uniquely positioned company in the tea market to service these shifting market trends. With a vertically integrated supply chain that assures full transparency and traceability back to the tea field, combined with a focus on innovation and technology within our new Global R&D center for tea in Rhode Island, Finlays is pioneering the future of tea.

Beyond the tea supply and processing changes, consumers are becoming more aware of the wide world of tea varieties and health values. While black tea has traditionally dominated the market and continues to do so, higher growth is being seen in other varieties of teas like green (up over 2% and continuing to grow) and other more niche varieties like white, oolong and even purple (albeit a very small piece of the total tea space, growth is projected to maintain at over 2% through 2021). Products like Purple tea offer not only health value, but also a rich color experience that is high on consumer interest.

Tea has traditionally enjoyed a general ‘health halo’ with consumers, promoting antioxidants and improved immunity, but as health and wellness become more important, new emerging health trends like probiotics, protein, detox and recovery are creating new opportunities for tea within non-traditional beverage segments. As concerns over caffeine grow, tea is well positioned to offer a healthier alternative, providing a caffeine impact that is more sustained in contrast to energy drinks and even coffee beverages that can be known for a quick boost and fast crash. Functional teas in the ready to drink space are up 36% vs YAGO, and Kombucha is driving the majority of this growth, up 77%.

Finlays’ global operations and supply chain makes it the perfect partner for companies through its varied offerings of different tea types, formats, certifications and blends, as well as our experience and focus on innovation and beverage formulation ideas. Most recently our team was inspired by the growing water category, developing the idea for a sparkling energy water that is enhanced with Finlays own natural caffeine and tea essence, for a healthy, clean and exciting new play on water. Contact Finlays today to learn more about how our team is innovating tea technology and ideas for tomorrow’s beverage consumer.