Hot Drinks

Hot Drinks: Consumption Habits and Ingredients

Coffee & Tea Consumption

A significant portion of hot drink consumption is driven by habit. This has led to a lack of change in consumption for staple categories such as hot black tea and coffee. However, a more apparent trend is the growing percentage of individuals consuming hot coffee specialties and hot tea weekly. For instance, FMCG Gurus’ consumer insights reveal that 32% of global consumers say they drink hot speciality coffee weekly. In addition, our findings indicate that 30% of global consumers drink hot black tea weekly. This shift can be attributed to consumers seeking affordable indulgence as escapism during uncertain times. This is also accompanied by visiting food service outlets more often compared to the pandemic period.

Additionally, there has been a rise in the percentage of consumers regularly turning to green tea. This suggests a preference for better-for-you options among certain consumer segments. 

Consumers Have Conflicting Behaviors During Today's Recessionary Period

Even before the current economic challenges, a considerable number of consumers were managing their finances on a month-to-month basis and felt they lacked substantial finances. The escalation of price inflation has only enhanced these concerns, resulting in opposing attitudes among consumers toward product categories associated with indulgence. On one hand, there is a desire to limit spending on non-essential product categories or those linked to premium pricing.

Conversely, individuals continue to pursue indulgences as a means of escapism and compensation for reduced spending on larger-ticket items. These conflicting attitudes and behaviors are directly influencing the hot chocolate and hot coffee specialties categories. As a result, consumers demonstrate both a reduction and an increase in consumption simultaneously. This underscores the consumer focus on cost consciousness. As a result, brands should emphasize affordable indulgence and promote hot drinks as a means of escapism and self-care. 

Botanicals are Highly Appealing

Authenticity and genuineness hold significant importance for consumers, particularly when selecting hot beverages. Consequently, it's unsurprising that 42% of global consumers indicate that botanicals make them want to increase their consumption of such beverages. This influence stems from two primary reasons. Firstly, consumers link these ingredients with environmental friendliness and purity. Secondly, with the promotion of various aspects of health during a time when proactive health approaches are prioritized (even as spending on health and wellness products is considered less essential compared to the pandemic period).

On a global scale, consumers mainly associate botanicals with contributing to sleep health. For example, FMCG Gurus’ market research indicates that 63% of consumers who are likely to purchase beverages with botanicals/botanical flavors believe they help to improve sleep health. The association with supporting physical and emotional well-being will resonate with consumers and shape their perceptions of value. This is important during a time when they strive to maintain fitness levels for as long as possible. This is especially pertinent as consumers express concerns about the impact of elevated stress and anxiety on their mood, sleep patterns, and long-term health. 

Consumers are Seeking Ingredients That They Deem 'Better For You'

In addition to steering clear of what consumers consider dietary drawbacks, they actively seek ingredients perceived as beneficial for themselves and the environment when selecting hot beverages. Through a better-for-you lens, consumers emphasize the importance of sustainably sourced ingredients. This indicates their increased attention to the supply chains of particular beverages. Consumers express a desire for ingredients to be produced in an equitable and responsible manner.

Health-related claims hold significant appeal. This is particularly true as certain hot drinks have long been associated with supporting both physical and cognitive well-being. However, in a climate where concerns about illness have lessened, it is paramount that product claims are viewed as trustworthy. In addition, health benefits should not be excessively highlighted to the detriment of sensory enjoyment. 

This article is based on FMCG Gurus: Hot Drinks Trends – Country Reports 2024. For more information, please click here.

Hot Drinks: Ingredients and Consumption Patterns

Introduction

Consumption patterns in the hot beverages sector are long-established and are usually driven by habit. As a result, it is not a surprise that the proportion of consumers who drink these products on a weekly basis has shown minimal change over the past few years. While there has also been only a slight shift in the frequency of hot green tea and hot chocolate consumption, there has been a noticeable increase in the number of consumers who drink specialty coffees on at least a weekly basis.

With the challenges brought about by rising prices, many individuals have had to rethink their spending habits in order to make their money stretch further. One consequence of this is that consumers are seeking out products that they view as affordable indulgences, providing a sense of reward and escapism. This can be seen as a way of compensating for cutting back on more expensive items. This presents a significant opportunity for innovation, as it allows for the promotion of high-quality ingredients and new, unique flavors that can shape consumer perceptions of value, which is essential during a cost-of-living crisis. 

Consumers are Conscious of Sugar Content

On a global scale, consumers remain proactive about their health, recognizing the potential long-term effects of their dietary choices. They are more attentive to product ingredient lists and are mindful of dietary risks, although to a lesser extent than seen in 2021 during the heightened pandemic period.

Sugar content stands out as a primary concern for consumers. For instance, FMCG Gurus’ consumer insights reveal that 43% of global consumers say they are concerned about hot drinks containing sugar. However, this concern is relatively lower compared to the levels observed in the soft drinks sector, where consumers have more control over adding sugar themselves. While the proportion of individuals worries about sugar content has slightly decreased over the past three years, there has been a rise in individuals conscious of the use of artificial ingredients, aligning with a growing consumer emphasis on natural ingredients. 

Healthy Beverages

Perceptions regarding the healthiness of hot drinks vary significantly between different categories. Generally, consumers are more inclined to view hot green tea as healthy, and there has been a noticeable rise in the proportion of individuals expressing this view over the past three years. For instance, FMCG Gurus’ market research highlights that in 2021, 58% of global consumers who purchase hot green tea feel that it is healthy. Additionally, in 2024, 68% of global consumers who purchase hot green tea deem it to be healthy. Hot green tea has long been labeled as a superfood due to its antioxidant properties and its association with promoting various aspects of physical and cognitive health. The increased emphasis on the health benefits of hot green tea aligns with consumers adopting a more basic approach to nutrition and seeking everyday products to maximize their intake of health-boosting ingredients, especially as functional products are often associated with a premium price.

Conversely, there has been a decrease in the proportion of consumers who consider hot coffee specialties and hot chocolate to be healthy compared to three years ago. This shift could be attributed to some consumers prioritizing escapism and indulgence when turning to these products, rather than seeking out healthier options within the categories. Additionally, in the case of hot coffee specialties, increased consumption rates may lead individuals to perceive their intake as incompatible with maintaining an overall healthy diet and lifestyle. 

This article is based on FMCG Gurus: Hot Drinks – Global Report 2024. For more information, please click here.

Coffee Trends: Speciality Coffees and Sustainability

Introduction

In the beverage industry, coffee trends have seen a rise in unique flavors and blends. There is an increased demand for specialty and artisanal coffees, as consumers are becoming more interested in the origin and quality of their coffee. Sustainability is also playing a big role, with consumers seeking out brands that prioritize ethical sourcing and environmentally friendly practices. Additionally, ready-to-drink coffee products have become increasingly popular, offering convenience and on-the-go options. Coffee innovations such as cold brew and iced coffee are also gaining traction.

Coffee Consumption

Drinking coffee is a daily occurrence for a large proportion of consumers. For instance, FMCG Gurus’ consumer insights reveal that 47% of global consumers drink hot coffee daily. In comparison, only 5% of global consumers drink specialty coffee daily, such as a latte or americano. This highlights how specialty coffees are seen as more of a treat rather than a daily necessity. It is important to note that of hot coffee drinkers, a majority purchase coffee in the supermarket. This suggests that regular coffee drinkers pick up coffee as part of their food shop, as opposed to those who consume specialty coffees as a treat or when they are on the go outside of the home.

Speciality Coffee

Coffee consumption has been steadily growing as more people appreciate the rich flavors and unique profiles of specialty coffees. The demand for premium and artisanal coffee is driving innovation in the industry, with companies offering unique blends and limited-edition releases.

However, it is important to consider the impact of rising costs on the specialty coffee market. FMCG Gurus’ market research has revealed that 77% of global consumers are looking to reduce spending in coffee shops and cafes over the next month. This highlights the impact of the cost of living crisis on out-of-home purchases. To respond to this, brands in the coffee market should offer premium at-home coffees during this recessionary period.

Sustainability

Sustainability and ethical practices in the coffee market are becoming increasingly important. Consumers are looking for brands that prioritize ethical sourcing, fair trade practices, and environmental conservation. Many companies are implementing initiatives to support farmers, promote biodiversity, and reduce their carbon footprint. FMCG Gurus’ consumer insights reveal that 70% of global consumers look for environmentally friendly claims in hot coffee. Additionally, 47% of global consumers seek fair-trade certified claims in hot coffee. This highlights that a significant proportion of consumers are placing a greater emphasis on the environmental and social impact of their coffee choices.

As a result, coffee brands are increasingly focusing on ethical sourcing practices, fair trade certifications, and supporting local coffee farmers. Additionally, there is a growing trend towards eco-friendly packaging and promoting recycling initiatives. Our findings reveal that 41% of consumers seek out hot coffee with recyclable packaging. As a result, the coffee market must continue to work towards more sustainable initiatives to meet the evolving demands and values of environmentally-conscious consumers.

Sugar Content

With a greater focus on long-term health, consumers are seeking out healthier alternatives and reducing their sugar intake. FMCG Gurus’ market research shows of the consumers who check nutritional labeling on coffee, 60% check for sugar content. In response to this demand, coffee brands must offer low-sugar or sugar-free options, as well as natural sweeteners or flavored syrups with reduced sugar content. This allows consumers to personalize their coffee experience while also aligning with their health-conscious choices.

However, it is important to note that taste and sensory appeal is a priority for many consumers when it comes to coffee, so brands must make sure they do not overpromote health and compromise on taste.

The article is based on FMCG Gurus: Coffee Trends – Global Report 2023. For more information, please click here.