Meet the panel

• Anton Angelich, group vice president, marketing, Virginia Dare, Brooklyn, N.Y.
• John Harper Crandall, vice president, sales, Amelia Bay, John’s Creek, Ga.
• Stacy DeMars, senior marketing coordinator, Finlays, Lincoln, R.I
• Laura Ennis, senior innovation supervisor, beverage applications, David Michael & Co., Philadelphia
• Jim Hamernik, director of research and development, Flavorchem Corp., Downers Grove, Ill.
• Jodi Horon, business development manager, beverages, Synergy Flavors Inc., Wauconda, Ill.
• Tiffany Hubbard, beverage development scientist, ADM, Erlanger, Ky.
• Hilary Hursh, R&D manager, Finlays
• Lauren Lamoureaux, technical director, Finlays
• Ed McIntosh, marketing manager, Flavorchem
• Douglas Rash, group vice president, global sales, Treatt USA Inc., Lakeland, Fla.
• Bob Verdi, health & wellness business director, Virginia Dare

Scan any list of the 2015 trends to watch and you’re sure to find functional beverages at or near the top. After all, the U.S. holds the title of world’s healthiest market for functional products, and beverages take up the greatest space under that functional banner. Just how great a space? According to Nutrition Business Journal, beverage sales within the U.S. functional sector hit $27.8 billion in 2012, up 9.8% over the year before.

But as consumers’ thirst for wellness drinks grows, their appetite for “artificial” or “overly processed” ingredients shrinks proportionally. Which is why there’s no better time to explore new opportunities for two of the oldest — or shall we say, “most enduring” —  functional beverages ever: tea and coffee.

Not only do coffee and tea rank behind only water in terms of global consumption, they’ve been consumed for centuries as well, noted Jodi Horon of Synergy Flavors Inc., Wauconda, Ill. “They also have proven health benefits without the need for additional fortification.”

Of course, that doesn’t mean they aren’t great vehicles for delivering additional fortification, and many manufacturers are treating them as just that. To learn more about what makes coffee and tea so functional in the first place, we asked suppliers to share their insights.

Dairy Foods: What functional benefits are marketers looking to deliver?

Tiffany Hubbard: Functional beverage marketers want to deliver natural, great-tasting products that offer a range of benefits, from antioxidant protection to sustained energy. They want to avoid non-GRAS ingredients and those that don’t offer a natural perception.

Dairy Foods: Are these the same qualities that resonate with functional-beverage consumers?

Bob Verdi: Virginia Dare’s 2013 national survey of 600 adult consumers found a strong interest in functional foods and beverages, and the top functional benefits consumers identified were energy delivery, weight management, post-exercise rehydration, and muscle recovery and digestive health. In this same survey, we found that consumers were looking to avoid artificial sweeteners, high-fructose corn syrup, sugars in general and preservatives.

Douglas Rash: Consumers continue to pursue functional beverages that provide benefits in regards to energy and mood enhancement, as well as health-and-wellness such as antioxidants, hydration and low-sugar alternatives. “Bad” ingredients to avoid include HFCS, synthetic sweeteners, artificial flavors, GMOs and allergens, such as gluten.

Ed McIntosh: We see consumer interest growing in protein drinks — especially those containing non-traditional proteins, such as rice and pea protein. These functional beverages offer quick energy and play a central role in many diet and weight-management programs.

Dairy Foods: Do coffee and tea make it onto people’s radars as genuinely functional options in the beverage space?

John Harper Crandall: Absolutely. Tea and coffee are the original functional beverages. Tea offers consumers refreshment as well as additional health benefits. Tea and coffee are packed with antioxidants and other functional ingredients that stimulate, relax or purify.

Jodi Horon: Both coffee and tea are in high demand for their functional benefits. Examples include cold-brewed coffee, as well as green tea and green coffee extract for their natural stimulating and antioxidant properties. The functionalities of drinking coffee and tea are several: peace of mind, relaxation and hydration.

Rash: Coffee in particular, in regards to energy and mood, and as a low-sugar and non-soft-drink alternative. Cold-brewed coffee especially is growing in popularity as a cold beverage, and tea has been, and continues to be, perceived as healthy because of its antioxidants, polyphenols and overall simplicity.

Stacy DeMars: Our customers consistently look to coffee as a natural energy beverage, but have recently begun to recognize the natural antioxidant content of coffee, as well. Customers are also often interested in the caffeine content of coffee. Typically, they’re mostly interested in total polyphenols in tea. There has also been some interest in catechins, specifically EGCG.

Hubbard: With many studies in the popular press linking tea and coffee to health benefits, consumers recognize these products as inherently functional. This helps when adding green tea catechins or green coffee extract to non-tea and coffee-based products, but it also gives consumers the go-ahead to enjoy tea and coffee drinks as “healthier” alternatives to soda, as long as they aren’t loaded up with sugar or fat.

Dairy Foods: Several of you have mentioned words like “natural,” “simplicity” and “healthier” in reference to tea and coffee. How do tea and coffee fit consumers’ shift away from “belly wash” toward “real” beverages?

Laura Ennis: Basic coffee and tea typically don’t have a large list of extra ingredients, and they’re considered pure, straight from nature and made with minimal processing.

Rash: Consumers can touch coffee beans and tea leaves. And origin identifications such as Colombian coffee or Kenyan tea also allow consumers to identify with beverages made from such, versus from “flavors,” as in the case of soft drinks and other beverages.

Crandall: Tea and coffee are all-natural, simple products that’re healthy and taste great. They offer more satisfaction than plain water, so consumers choose these beverages in place of carbonated soft drinks or sports drinks when they have the desire to grab something to drink.

Anton Angelich: Consumers are looking more for safe and familiar ingredients, and clean labels. The food press, blogs, the Internet and food TV networks promote the health benefits associated with tea, and especially green tea. Consumers are making the connection and creating marketing pull.

Dairy Foods: What evidence do we have for these functional benefits? What makes coffee and tea so good for us in the first place?

Lauren Lamoureaux: In tea, there has been much research about the benefits of polyphenols like catechins, theaflavins and thearubigins. These functional ingredients are thought to ward off free radicals and the like.

Crandall: Coffee is packed with antioxidants as well like caffeic acid and chlorogenic acid. All of these benefit the body by removing from our system free radicals that cause cell degradation over time. Think anti-aging, balance and purification.

Ennis: Teas have been recognized for their anti-inflammatory properties, lower levels of caffeine and the fact that they’re considered natural antioxidants. In most lists of anti-inflammatory foods and beverages, tea ranks between garlic and ginger.

Rash: That said, to a great extent this is a matter of perception for the U.S. consumer, as I would venture to say that most don’t know what catechins or polyphenols even are.

Dairy Foods: What concepts have you seen, either on shelves or in development, that compellingly and successfully showcase coffee and tea’s functional benefits?

DeMars: Protein-fortified beverages have been gaining popularity in the functional-beverage segment, and both coffee and tea ingredients pair well with these beverages — not only by delivering a boost of energy, but also by providing healthful antioxidants.

Coffee lattes have become very popular in recent years for showcasing the functionality of antioxidants and caffeine that comes naturally from coffee. One of the most popular uses for coffee ingredients has been ready-to-drink iced coffee. Tea lattes are also starting to show up in the marketplace and are becoming more mainstream. By offering added health benefits like polyphenols, they should have the same success as coffee in ready-to-drink lattes.

Dairy Foods: How well do coffee and tea “hold up,” so to speak, in these concepts, and which concepts best accommodate coffee or tea as a component?

DeMars: Tea and coffee ingredients can be used across the entire beverage segment, from dairy beverages to energy drinks.

Hubbard: Tea and coffee are good bases for functional beverages, as the inherent bitterness and astringency can help cover or mask some off tastes associated with functional ingredients. For example, green coffee and green tea extracts are popular for functional drinks. Both can be added back to tea and coffee formulations for enhanced functionality.

Jim Hamernik: The pairing of coffee and tea with product formulations is key. Coffee works well in sweet and creamy applications — dairy or protein-based products, for example — while it often does not work great in high-acid products. Depending on the profile, tea often does work well in high acid. The profile and character of the coffee or tea is critical to what product they’ll work best in.

Dairy Foods: That’s a great segue to talking about the nuts and bolts of formulating functional coffee and tea beverages. When starting down that path, what first principles should manufacturers map out?

Horon: Manufacturers should know the desired characteristics of the finished beverage — color, flavor, aroma — and all analytical requirements that need to be met, like Brix, pH, titratable acidity and so-on. Cost parameters, shelf life and packaging also need to be identified in advance. It’s critical to have a good understanding of the base of what you’re working with, too, and how functional components might impact long-term stability.

Dairy Foods: Let’s address some of these issues, starting with stability.

Hilary Hursh: The main concern in formulating with coffee is for dairy-containing products. Coffee is naturally acidic, which may cause milk proteins to precipitate during high-temperature or high-pressure processing. Typically, the acidity in coffee can be neutralized with a base, such as potassium carbonate, or buffered with a common buffering salt, like dipotassium phosphate. The caffeine in coffee, though, is very stable to high-temperature processing and pH extremes.

Lamoureaux: Tea likes to be in the pH range of 3.2 to 4.0. The lower the pH, the higher the likelihood that precipitation may occur. This also depends on the amount of tea added, other possible ingredients in the formulation (such as vitamins), the quality of the ingredients, and the quality of the water used. Also, an extract with less turbidity should be used.

Hubbard: If you have tea solids in your product, you’ll have precipitation over time. The more solids, the more fallout you’ll see. So knowing whether or not the customer will accept precipitation in their products is the first step to choosing the right format. Does the customer want a “shake well” label on the container or not? Some see the fallout as meaning the product is all-natural or better-for-you, where others don’t view it as visually appealing. If your goal is no precipitate in the final product, you should use tea concentrates and essences instead of solids or powders.

Dairy Foods: How might temperature and processing affect tea quality, stability, even functional potency?

Lamoureaux: Manufacturers should process tea-containing beverages at recommended FDA parameters. If a temperature is too high, it can affect the flavor, as well as possibly brown some of the lighter-colored teas, such as white and green. The addition of ascorbic acid is recommended to help slow the browning process. The beverage can always be adjusted with tea itself for color, instead of using caramel color or natural or artificial colorings.

Hubbard: One shouldn’t add green tea to boiling water, which will degrade catechins quickly. A better water temperature is between 160F to 170F. So when hot-filling a beverage, overages of EGCG and other vitamins should be added to meet the targeted claim.

Dairy Foods: Let’s look at flavor and its influence on a functional coffee or tea’s success.

Angelich: Taste still rules! So the beverage technologist needs to ensure that the taste will be great, and that that great taste will prevail throughout the duration of the product’s shelf life.

McIntosh: Tea manufacturers must innovate around flavors, added functionalities and convenience to prevent consumers’ crossing over to other categories.

Dairy Foods: Is getting the flavor right in functional coffees and teas a particular challenge?

Hamernik: These products are especially susceptible to changes during processing, and thorough testing is needed to understand this. Every part of the finished beverage affects the profile of the coffee and tea flavor. The formula and process must be tailored to optimize the flavor notes and shelf life of the drink.

Angelich: As consumers want cleaner labels, fewer artificial colors, sweeteners and ingredients, less sugar and fewer preservatives, the product formulator has to work with a new toolbox of ingredients and preservation technologies to deliver optimum taste and shelf life.

Dairy Foods: Give me an example how we can tap this toolbox to create functional teas and coffees that bring consumers back for seconds.

Angelich: If tea-beverage ingredients are combined to create hybrid beverages with botanicals or other functional ingredients, masking flavors are generally necessary to suppress bitterness and other inherent off notes. If alternative sweeteners such as stevia are incorporated into tea beverages, the taste and sweetness balance needs adjusting to bring the sweetness flavor as close to the profile of sucrose and to minimalize any uncharacteristic off tastes. This may be accomplished with masking flavors, also.

Hubbard: Many use tea blends and herbal teas for specific markets. Reasons for blending could be for better consistency, taste or cost. Tea blends often offer the best of both worlds since they combine more than one type of tea. This is also a way to create a unique tea flavor from the same region or several different ones.

Dairy Foods: Let’s close with your picks of the exciting functional tea and coffee innovations waiting just over the horizon.

Angelich: Consumers are expanding their horizons and looking for teas from specific terroirs and gardens, green and matcha teas, and an expanding range of herbal teas.

We also see a continually growing interest in tea and coffee concentrates made with proprietary technologies based on actually brewing and steeping. This allows manufacturers the advantage of labeling their products as “made from brewed tea” or “from brewed coffee” — something highly desirable to consumers.

DeMars: Interest in coffee is also expanding into a concentrate format where consumers can customize their experience by adjusting the strength of the coffee, sweetness and level or type of milk.

Hubbard: The cold-brew trend continues to proliferate in coffee products and may step over into the tea space. RTD options with more authentic “fresh-brewed” taste, as well as tea and coffee plus juice and dairy hybrid beverages offer natural, great-tasting and yet lower-calorie and uniquely flavored options. Sparkling teas also seem to be trending, as well as products featuring fun fruit flavors targeted to younger consumers.

 DeMars: Stick packs are also an area of increased interest, as they allow a convenient format to add additional functional ingredients.