Soup-To-Nuts Podcast: Reading the leaves -- how the tea and tisane categories are evolving

According to the Tea Association of the USA, proper tea – including black, green oolong, dark and white all sourced from the evergreen Camellia sinensis​ – can be found in more than 80% of all US households and on any given day roughly half of Americans enjoy it served hot or iced. According to the group, younger generations are more likely to sip tea, with more than 87% of Millennials in 2023 drinking tea and Gen Zers “making a strong move to tea.”

Likewise, recent data from Fairfield Market Research shows demand in North America is driving the global fruit and herbal tea market, which it predicts will reach a valuation of $6.5 billion by the end of 2030 – up from $3.8 billion in 2023.

In this episode of FoodNavigator-USA’s Soup-To-Nuts podcast​, insiders with British-based Certified B-Corp Clipper Tea and California-based B-Corp Guayakí Yerba Mate share how consumer interest in functional health and wellness, environmental sustainability and culturally relevant flavor profiles are driving demand for tea and tisanes in the US and how they are meeting their needs. The companies also share how they are leveraging packaging to make their products more accessible, appealing and convenient. And finally, they attempt to read the tea leaves to predict where the industry is headed.

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Flavor and functional health benefits drive demand ​

According to the Tea Association of the USA, tea consumption jumped during the pandemic when many Americans turned to it to for its diverse health and wellness benefits – which Caroline Rose, the senior marketer for Clipper Tea’s parent company Ecotone, says is still a primary sales driver for the beverage. But she also notes that flavor is just as important a function when it comes to tea meeting consumers’ health needs.

She explained during the pandemic many consumers were attracted to the immunity boosting or calming benefits of tea and herbal blends, but now they are coming to the category seeking alternatives for sugary beverages, alcohol and other high-calorie drinks, and as they do they are seeking flavor-forward options.

Clipper balances the need for functional health and flavor by blending ingredients that offer benefits and either familiar taste profiles or which can be layered to create a pleasing organoleptic experience.  

For example, Rose notes Clipper’s Organic Orange & Turmeric Herbal tea offers a sweet, robust and naturally caffeine-free blend that along with Clipper’s Organic Lemon & Ginger Herbal are made with ingredients typically associated with immunity-boosting and anti-inflammation.

Beyond immunity, she said, Clipper has crafted teas that meet other in-demand functions, including digestion and gut health and relaxation and sleep.

Clipper also offers blends that Rose says are focused on “yumminess” – or just delivering an enjoyable taste experience, such as the company’s Organic Strawberry & Elderflower Herbal Tea.

The healthy compounds naturally found in different types of tea, such as the yerba matte used as the base for Guayakí’s range of loose leaf and ready-to-drink beverages, also appeals to consumers, according to the company’s VP of Operations Janal Cruz.

She explained that yerba matte includes theobromine – which is also found in chocolate and create a “good feeling.” It also has a number of polyphenols that indicate antioxidant activity.

While the benefits of yerba matte may appeal to consumers, it’s slightly astringent bitter taste due to its high tannin content can be off-putting – which one reason why Cruz says Guayakí offers a range of ready-to-drink bottles and cans that blend the tea with fruit juice, other herbs and stevia to deliver the sweet taste many consumers crave but without the calories from sugar.

“We have seen consumers really focus more on healthier options and a lot of our customers were asking for options that did not have sugar or added sugar in them. That is something we took to heart,” and which led to the selection of stevia as a sweetener, Cruz said.

Given consumers’ insatiable desire for new flavors, companies may be tempted to launches dozens and dozens of flavors, Cruz acknowledges, but she said Guayakí balances flavor innovation with usage occasion and retailer need.

Consumers want ethical sourcing, sustainable solutions​

While flavor and functional benefits are the top sales drivers for tea, ethical sourcing and sustainability also is a top priority for many shoppers, according to Rose, who notes these are foundational values for Clipper.

With that in mind, from the outset Clipper has sourced organic, which Rose notes currently accounts for only 20% of the US tea market but is the fastest growing subsection of tea. She noted the USDA Organic seal assures consumers the product they are buying is grown with limited fertilizers and pesticides and is “squeaky clean” and “natural.”

Guayakí also opted to source more sustainably grown version of yerba matte, which Cruz explains is grown as a row crop but can also be grown in a more “natural” and “native kind of state within a managed forest.”

“We chose to work in a model of doing shade-grown yerba matte” from under a rainforest canopy so that it can better sequester carbon and serve as a catalyst for economic development in the region it is grown, she explained.

Innovative packaging with accessible messaging welcomes newcomers to the category​

Packaging is another important element to tea’s long-term success and ability to draw in new – and younger – consumers, according to both Rose and Cruz.

Clipper sets its tea bags apart by using unbleached, organic cotton and skipping the plastic and the staple that is sometimes used to fasten tea bags so that they are fully biodegradable. The brand also leans on brightly colored boxes with playful names that also clearly state the key ingredients and benefits.

As Cruz explained, Guayakí offers multiple formats – including traditional loose leaf yerba matte and the accessories needed to enjoy it in the traditional style, but also bottles and cans that consumers can enjoy on-the-go.

By continuing to innovate around function, flavor and clear and convenient packaging, both brands argue companies can drive significant growth – especially among younger consumers.