US beverage development company Imbibe helps put the spotlight on some of the top trends and innovations in the market.
RTD coffee: plant-based milk, CBD and floral flavors
In 2017, 19% of new coffee launches around the world were iced, ready-to-drink products: illustrating demand for refreshing, indulgent products, according to Mintel.
In the US chilled coffee is thriving, growing at least 10% annually between 2013-17. Cold brew is helping premiumize the RTD category and is growing quickly in the US: 56% of new RTD coffee launches in the US were cold brew in 2017, up from 38% the previous year.
“Consumers want better-for-you beverages that are convenient and functional and RTD coffee checks all the boxes,” says Imbibe. “Coffee is also a very versatile ingredient that can be enhanced with flavor, dairy or non-dairy milk, and additional functional ingredients which adds to its appeal.
“Cold brew is still dominating the coffee category, but brands are differentiating their products by incorporating functional ingredients, plant-based milks, and exciting flavors.”
Innovation watch: The next generation of RTD coffees are expected to increasingly turn to plant-based milks as well as floral flavor profiles.
“Protein, probiotics, and MCT oil are popular functional ingredients being used in cold brew coffee RTDs, but CBD and adaptogens are emerging ingredients that you can expect to see in product launches next year and beyond,” says Imbibe.
“Oat milk experienced rapid growth on menus of third-wave coffee shops over the last year so expect it to be incorporated in the next generation of RTD coffee products.
“Floral flavors in coffee have been gradually growing on menus at third wave coffee shops and major players like Starbucks, who launched a Juniper latte at their Roastery and Reserve stores. Black medicine recently launched the first lavender latte RTD and more brands will incorporate floral flavor profiles in coffee RTDS over the next few years.”
Trends spotting: Trends in the $45.5bn coffee shop market can transition into the RTD category, so looking at coffee shop culture can help identify future trends.
“Innovative coffee products often start in third wave cafés. If they gain traction with consumers, and they’re technically feasible, RTDs will follow. For example, cold brew became popular in third wave coffee shops around 2014 and has become standard for RTDs over the last couple of years. More recently, novel ingredients like ayurvedic mushrooms and flavors such as lavender appeared on menus at third wave coffee shops like Limitless and are starting to be used in RTDs.”
RTD tea: taking a leaf out of the cold brew coffee book
With something of a health halo, RTD tea has a chance to tap into consumer health and wellness trends. Building on this comes an increasing number of functional teas.
Trend spotting: “Consumers are limiting their intake of traditional CSDs and are turning to beverages like tea as a better-for-you alternative," says Imbibe. "Teas with benefit claims like immunity, stress relief, and beauty enhance are very popular right now. Brands are incorporating ingredients that are inherently functional and high in antioxidants.
“Because of the holistic health and wellness movement there’s been a shift in the energy drinks category towards using naturally stimulating ingredients like coffee and tea. Coffee and tea fortified with other functional ingredients like protein, probiotics and CBD is a growing trend.”
Innovation watch: Innovations in the RTD tea sector include cold brew, new tea varieties, and a new approach to texture.
“Brands are starting to introduce cold brew teas because of the success of cold brew products in the coffee category.
“Adding carbonation or nitrogen-infusions to tea is an emerging trend because they add textural complexity without the sugar and calories of traditional CSDs.
“Purple tea from Kenya is a relatively new ingredient that is suggested to have more antioxidants than green tea. The tea’s functional properties and visually striking purple color make it very appealing, so expect to see it in more RTDs once the supply chain matures.”