The Forgotten Nutraceutical

Why tea is a natural choice for tapping into high-growth functional beverages

By Rachel Jones, Group Head of Business Development at Finlays, a leading global supplier of tea, coffee and botanicals.

?Of all the trends in the beverage space at the moment, health and wellbeing is one of the most exciting. This global megatrend has seen the ‘wellness economy’ grow twice as quickly as the global economy to be worth $4.2 trillion[1] . Within that, healthy and functional products are now worth $700 billion a year[2] .

At a time when our lives have become more hectic than ever, it’s perhaps no surprise that humans crave wellness. Wellness is the aspirational lifestyle which acts, for many, as the counterbalance to life in the modern age. The impact of COVID also can’t be underestimated in driving attitudes towards healthy living. It is this gap between the reality of modern day living and the aspiration for wellness, which is driving the growth of “functional” food and beverages.

Functional beverages can be described as those which allude to, or claim to, have a positive impact on the body or mind. At Finlays, we’re seeing that consumers are increasingly seeking products which – whether physically or psychologically – make us feel good about ourselves. In short, consumers want products that offer a taste of a wellness lifestyle, if only for a moment.

So functional beverages can help consumers tap into their desire to live a more healthy, balanced and energetic lifestyle. But critically, they want it in a natural and sustainable way. In a recent study conducted by GlobalData, 90% of global consumers said that they actively look for natural ingredients when choosing a beverage.

This desire for naturally functional products, which fit easily in our day-to-day life, has given rise to the trend of ‘plant power’ and ‘prevention not cure’. Both terms refer to plant compounds being harnessed in a format for consumers to enjoy daily, while positively contributing to their wellness goals. Those goals could be increasing energy levels, better sleep, more brainpower, a faster metabolism, the ability to relax or the benefits brought by antioxidants. To meet these needs, the beverage industry is rapidly looking to natural plant-based ingredients.

One of these ingredients is the noble tea leaf. Consumed in China as a medicine for thousands of years, the nutraceutical properties of tea are also increasingly being realised in western markets. That’s why at Finlays, we refer to tea as the “forgotten nutraceutical”.

The growth opportunities for tea in this space are exciting. Over the last five years the functional beverage market, with tea as a base, has grown with 8% CAGR[3] . This is compared to category growth of RTD/Iced Tea, at 1.5% CAGR[4] .

The future growth of tea as a functional ingredient, forecast at 10% CAGR between 2020 and 2025, will be driven by our ever-evolving understanding of this wonderful plant and the bioactive and antioxidant compounds – such as catechins – it harnesses.

But truly, not all tea is created equal. When brands are considering tea as a wellness or functional ingredient, they should consider natural and sustainability credentials just as carefully. After all, nearly seven in 10 global consumers equate the concept of “natural” with the concept of “health”[5] .

As we expand our agricultural research to grow tea for maximum functional benefits, and importantly, then extract those compounds for human benefit, the growth of tea as a category is set to expand into ever more exciting new spaces.

And if tea ingredients can be sourced that are rich in bioactive compounds, naturally produced without pesticide or chemical and done in a sustainable way so that you have a positive impact in the world on purchase, you will be a step closer to living a life of wellbeing.

[1] Global Wellness Institute, 2018

[2] Global Wellness Institute, 2018

[3] GlobalData Plc, 2020

[4] GlobalData Plc, 2020

[5] GlobalData Plc, 2017