Hot beverage trends 2024: How the wellness ‘mega-trend’ hit UK cuppas

Where there’s health, there’s wealth. That much is proven by the value of the global wellbeing market – from ice baths and infrared saunas to ayurvedic tea and adaptogenic mushrooms – reaching $1.8 trillion. What’s more, 73% of Brits say wellness is an everyday priority [McKinsey].

Hot drinks are increasingly providing those everyday health boosts. Fruit & herbal infusions, long consumed for their perceived health benefits, have seen the strongest unit growth in a stagnant tea category [Kantar 52 w/e 12 May 2024]. Meanwhile, several brands have launched hot drinks infused with vitamins and adaptogens. Even coffee is getting the wellness treatment.

“Wellness is one of the mega-trends driving consumer choices across grocery, and it’s starting to have a significant impact on coffee,” confirms Roberto De Felice, marketing director at Jacobs Douwe Egberts (JDE). “There’s been a marked shift in recent years in how and when Brits enjoy their coffee, with growing interest in wellness a key factor.”

So, which brands are driving this? What are their chances of success in a market dominated by giants and beset with mounting pressures? And how will the health kick in hot beverages affect the future of the category?

“Wellness is one of the mega-trends driving consumer choices across grocery”

Roberto De Felice, marketing director at Jacobs Douwe Egberts (JDE)

For Kantar, the interest in wellness is far more than a passing fad. “The growing interest in health and wellness will continue to influence the hot beverages market in the coming year,” predicts client executive Joe Speller. “We’ve already seen a number of plant-based options enter the market, as well as vitamin-infused coffees.”

The idea of vitamin-infused coffees might just be a savvy one. Because in the £2.5bn hot beverages market, traditional wellness-led brews remain relatively small fry. Fruit & herbal infusions are worth a relatively modest £101.9m, having grown value 12.5%. Green tea has hit £15.6m thanks to a 1.8% value gain.

Coffee, on the other hand, is a dominant force. It’s grown value 4.4% to more than £1.6bn – while tea is worth £767.2m, after a 9.3% gain. Crucially, unit sales of tea are down 0.8% while coffee is up 0.9%, driven by demand for instant, speciality instant and decaf. So if brands can add health benefits to a cup of coffee, there is a sizeable market opportunity.

One brand betting on that opportunity is Rokit, which launched a range of vitamin-enriched Nespresso-compatible coffee pods in February 2023. The lineup – which includes Immunity Boost with vitamins, B12, B6 and D & zinc and Total Glow with biotin, zinc & selenium – has since landed in Tesco, Waitrose and Ocado.

Another is DTC brand Dirtea, whose range of “super mushroom-infused” products includes 100% arabica coffee blended with lion’s mane, chaga and tremella mushrooms. It promises to boost energy levels, immunity and focus. Dirtea’s hot drinks offer also includes mushroom-infused cacao and matcha products.

DTC rival No Ordinary Moments has also turned to mushrooms. It produces a Superlattes range, which the brand claims can benefit gut health, sleep and relaxation. Lines include decaf coffee alternative Mokshu with “18 anti-inflammatory adaptogens and superfoods” and instant mushroom coffee Javasu for “energy, focus and flow”.

Both are very much on-trend, suggests Helena Hills, co-founder of Truestart Coffee, which happens to supply No Ordinary Moments with coffee. “Consumers are increasingly aware of how their daily habits, like coffee consumption, impact their overall health,” she says.

“The rise of plant-based, decaffeinated, mushroom-based and vitamin-infused drinks reflects this shift. What was once a specialised understanding is now mainstream, with people seeking coffee that supports their wellness goals while still delivering an exceptional taste experience,” she adds.

In response to this, Truestart – which promises a “naturally consistent” level of caffeine for “no crash or jitters” from its branded lines – teamed up with health food and supplements brand Hunter & Gather in March. Together, they launched Thrive Instant Butter Coffee, a blend of arabica coffee, grass-fed EU butter, vanilla & organic medium chain triglycerides from coconut. The line is “designed to improve cognitive performance and reduce cravings,” says Hill.

Whether Brits will give up their morning mug of Nescafé or Yorkshire Tea in droves for butter coffee or chaga mushroom brew remains doubtful. But what is clear is that as people consume hot drinks on a wider variety of occasions, they’re looking for more from those beverages. Or less, in the case of caffeine content.

While many love a cup of joe, not everyone wants the accompanying caffeine wallop. That means demand for a milder buzz.

“As we drink more coffee, the need for caffeine alternatives will grow,” says James Hagerty, MD & founder of premium startup Presto. Last year, it launched Instant Half Caffeine Coffee into Booths and roast & ground Half Caf Espresso into Ocado.

“The coffee industry is witnessing a significant shift towards wellness-focused products,” Hagerty adds. “Consumers increasingly seek healthier alternatives, resulting in the rise of plant-based, decaffeinated and vitamin-infused coffee.

“The future of coffee has functional benefits, but as the nation’s number one drink, coffee will have to take baby steps to get there. In our opinion, half-caf is the first logical step.”

Cutting back on caffeine

Others agree that lowering caffeine levels in coffee, or cutting it out entirely, will play a key role in the category’s future.

“In line with a focus on wellness among shoppers, much of our innovation has been centred on our decaf range,” says Taylors of Harrogate brand manager Jack Scott-Paul. He points to the extension of the brand’s Decaffé range into beans and the launch of a decaffeinated version of its bestselling Italian Blend earlier this year.

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Research carried out for JDE in partnership with The Grocer adds further weight to the belief there’s more growth to be had from decaf. While 87% of coffee drinkers say they drink the stuff in the morning, surprisingly high numbers consume it later in the day. That’s 51% in the afternoon, 30% in the evening and 7% before bed [Toluna/Harris Interactive poll of 1,105 coffee drinkers].

“Coffee used to be regarded largely as a simple morning beverage, but now consumers see it as a lifestyle product that can be tailored to their preferences and enjoyed in a variety of contexts throughout the day,” confirms De Felice. He cites our finding that 44% of coffee drinkers use it to relax and 38% see it as a treat. “Younger coffee drinkers in particular want choice and the ability to personalise their drinks to their exact tastes and preferences.”

“Consumers are increasingly aware of how their daily habits impact their health”

Helena Hills, co-founder, Truestart Coffee

Take-up among shoppers is even more impressive given many are also drinking more coffee outdoors. The out-of-home market is up in value 17.4% to just shy of £7.7bn, with units up 9.9%.

Despite an average price hike of 6.8% per cup – driven by the cost of arabica and robusta beans hitting record highs because of poor weather, shipping disruption and market speculation – penetration is up 1.3%, frequency by 7.7% [Kantar 52 w/e 9 June]. It’s clear Brits are happy to fork out for their daily coffee no matter the location – or the price.

“Coffee has done a fantastic job at premiumisation over the past 15 to 20 years,” says Ian Bryson, MD at own label coffee supplier Lincoln & York. “While some tea brands have played around with quality and lost out as a result, no one’s doing cheap coffee because people are discerning and they know what they like.” Plus, he adds, the coffee sector is becoming more innovative. “As younger people come through into coffee, the market is diversifying into different flavours and iced coffee to satisfy different needs. That makes this a very exciting market to be in.”

Indulgent launches

That excitement in the market is reflected by the launch of several super-indulgent products in recent months. In June, Nescafé added Aero Peppermint and Quality Street Green Triangle Mocha instant lines, followed in July by Vanilla Cookie Dough Latte.

Also in June, JDE unveiled Kenco Millicano premium barista-style drinks Smooth Latte, Creamy Cappuccino and Cadbury Mocha.

Such products might at first seem counter to the health and wellness trends shaping grocery at present, but Kantar’s Speller suggests otherwise. “Consumers may also look to switch from higher calorie deserts or treats to an indulgent coffee, such as Nescafé’s Aero Mocha or Green Triangle Quality Street Mocha, which only has 78 calories per mug but will still satisfy an indulgent sweet craving,” he says.

“The coffee industry is witnessing a significant shift towards wellness-focused products”

James Hagerty, MD & founder, Presto

Yorkshire Tea is taking a similar tack with its Caramelised Biscuit Brew. “It’s amazing how many flavours taste delicious when they’re stirred into a cup of Yorkshire Tea,” said innovation manager Kate Halloran on announcing the launch in July. “Creating our Caramelised Biscuit Brew has been a dream. The buttery, warming, biscuity flavours work perfectly with the lovely, malty richness of Yorkshire Tea.”

The brand’s focus on a “proper brew” and investment in comical ads featuring some of the Yorkshire’s best-loved stars – including Patrick Stewart and Michael Parkinson – have helped it grow its lead in the UK’s tea ranking. Value has soared 19.4% to £169.6m on volumes up 9.8% [NIQ 52 w/e 15 June 2024].

A healthier cup of tea

Still, the future of tea sales is likely to be more than fancy flavours and funny celebs. As with coffee, many experts suggest consumers’ growing health consciousness presents a key opportunity for tea.

“As health and wellbeing is returning to the forefront of consumers’ minds, tea brands should see this as a key opportunity,” says NIQ analyst Tom Oakton. “Ten per cent of UK households are currently buying tea with benefits or added minerals to help prevent future illness. With shoppers paying attention to packaging claims, brands should consider this as an opportunity to highlight the health benefits of their products.”

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Many are already doing just that. Clipper Tea, for example, launched the functional Organic Infusion lineup in August (see right), in a bid to accelerate its 17.8% value growth on volumes up 12.5%. “We’ve had a phenomenal year driven by a mix of distribution gains and rate of sale improvements,” says marketing director Adele Ward.

While black tea accounts for the bulk of Clipper’s sales, fruit & herbal infusions are driving most growth. Value sales up by 55% over the past year, says Ward. “Health is becoming more and more important to people, and [they] are increasingly looking for specific benefits from tea such as helping them unwind or helping to boost mood.”

“As younger people come through into coffee, the market is diversifying into different flavours”

Ian Bryson, MD, Lincoln & York

Hence all the fruit & herbal infusions launches from brands. Those include Superlife Infusions, which added a range using the traditional Indian herbal medicine moringa in 2022, and Yogi Tea, which will follow the 2023 launch of Mental Clarity and Ashwagandha infusions with two products in September.

“In today’s world, where consumers carry a heavy mental load, following crisis after crisis, there is an increasing search for products that offer pleasure and opportunities for self-care,” says Yogi head of sales Franck Ramonet. The brand’s new Morning Energy tea “energises both mind and spirit”, he adds, while its Berry Vanilla brew offers the antioxidant, antiseptic and anti-inflammatory properties of fruits including elderberry, juniper and aronia.

Doing some good

If this all seems too niche to have genuine mainstream appeal, think again. Some seriously big players are also getting in on the act.

Take Zetland Capital, owner of Typhoo Tea since 2021. Its betting on further growth for fruit & herbal infusions, having launched the Herbalistas brand in April, promising a “mugful of mindfulness” and a “microdose of happiness” with every brew.

The range comprises apple cider, cinnamon & ashwagandha Daily Restore; lemony ginger & schisandra berry Shine & Rise; orange & chaga Zen Time; and Bedtime Bliss, a blend of chamomile, rosehip & tulsi.

“Herbalistas stands for finding the little extra positives in every day,” says head of herbs Mike Brehme. “It’s good stuff that does good stuff.”

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Sister brand Typhoo also wants to be known for doing good stuff. “Typhoo’s commitment to producing ‘Fear Free Tea’, was sparked by a change in ownership,” says CEO Andrew Reardon. “We started by addressing our supply chain, changing our model to ensure we work closely with a handful of tea plantations, aligned with our goal of eradicating sexual violence in the tea industry.”

“It turns out there’s a wrong way to make a cup of tea and we have been doing it wrong”

Andrew Reardon, CEO, Typhoo Tea

It seems this commitment could be helping Typhoo in grocery. In stark contrast to the brand’s losses of roughly £85m from 2017 to 2023, value sales have surged 48.3% to £6.8m on volumes up 43% [NIQ[. That’s the fastest volume gain of any the top 10 brands.

Typhoo is optimistic about further growth, having added a “bold new brew” with its ‘Fear Free Tea’ pledge front of pack in June (right). A decaf variant is due in November.

“It turns out there’s a wrong way to make a cup of tea and we, like everyone else, have been doing it wrong,” says Reardon. “But now we know better. We’re taking a heritage brand and bringing it into the 2020s, overhauled top to bottom to taste good and do good.”

With talk like that, the longer-term prospects of tea are starting to look healthier.