Many of our workdays have looked a little different over the past year. But one thing has remained constant for a lot of us: starting the morning with a coffee- or tea-based beverage.

“While [the] past year in the pandemic has been tumultuous, many consumers have counted on coffee and tea as constants in their routine,” notes Philip Caputo, marketing and consumer insights manager for Virginia Dare, New York.

Ready-to-drink (RTD) coffee was on a huge growth trajectory even before the COVID-19 pandemic. According to a report from Pune, India-based Fortune Business Insights titled “Ready to Drink (RTD) Coffee Market Size, Share & Industry Analysis, By Packaging Material, Distribution Channel, and Regional Forecast, 2020-2027,” the RTD coffee industry is projected to have a compound annual growth rate of 8.3% over the 2020-2027 time period.

Tea is also experiencing a growth spurt, notes Pam Stauffer, global marketing programs manager, Cargill, Minneapolis.

“According to Euromonitor International, among the nonwater beverage categories, tea is seeing the most growth in North America,” she says. “Kombucha is certainly a big driver, but fruit and herbal teas are also doing well.”

Sheri O’Brien, vice president, sales and marketing for Edmonton, Alberta-based BioNeutra North America Inc., says the health halo of RTD coffee and tea has contributed to category growth. And this wellness reputation has led many processors to choose coffee/tea flavors and extracts to pair with their dairy offerings.

“Coffee and dairy are a match made in heaven,” says Susan Maiocchi, director, advanced development for S&D Coffee Inc., Concord, N.C. “They are inseparable.”


Add functionality

While coffee and tea already have a healthy reputation, some consumers are looking for “new, stimulating ingredients” to add even more functionality to these beverages, says Casey McCormick, director of product development for Sweegen, Rancho Santa Margarita, Calif.

“In the U.S., RTD coffee innovations have started to focus on ‘slow-release’ energy,” he adds. “While in Europe, a ready-to-drink coffee with added protein, fiber or vitamins for a longer-lasting boost is popular among young adults.”

RTD coffee and tea beverages fortified with additional ingredients can “add value” for consumers; they see these offerings as contributing to their health and wellness goals, McCormick explains.

“Fortifying beverages with adaptogens and nootropics and other nutritional ingredients, vitamins and botanicals [is] very appealing to health-conscious consumers because they want to indulge in better-for-you great-tasting RTD beverages,” he adds.

Sweegen works with its specialty ingredients affiliate — Blue California Ingredients, Rancho Santa Margarita, Calif. — to provide its customers with functional ingredient solutions. According to McCormick, Blue California is seeing “a surge in adaptogens such as L-TeaActive [and] L-Theanine that can help the body adjust when under stress and bring back physiological balance.”

Blue California has also observed increased interest in such offerings as the company’s ErgoActive ergothioneine, explains McCormick.

“Rich in mushrooms and not found in the body naturally, ergothioneine has been shown to support potential cognitive benefits,” he adds. “Renowned scientist Bruce Aames has called it a ‘longevity vitamin.’”  

RTD coffee and tea manufacturers also could tap into the immunity trend when considering functional ingredients to add to their beverages, Stauffer says.

“Immunity is an area of concern for many consumers, suggesting opportunities to infuse beverages with immune-supporting ingredients like postbiotics,” she points out.

For its part, Cargill manufactures the EpiCor postbiotic. Cashtyn Lovan, senior marketing associate, Cargill Health Technologies, Ankeny, Iowa, says the ingredient “has been clinically shown” to offer immune support, as well as “positively modulate the gut microbiota.” The postbiotic is produced through a proprietary natural fermentation process.

“Cargill has already successfully formulated [the] EpiCor postbiotic, which has a savory umami flavor, into RTD teas and dry tea mixes,” Lovan adds. “And we see opportunities in a range of beverage applications, including functional coffee drinks.”


Reduce sugar

Sugar reduction is certain to become more of a concern for RTD coffee and tea formulators. While the top-selling items in this space are made with high amounts of added sugar, the top-growing product lines have greatly reduced sugar, McCormick explains.

“Sugar reduction is very important in this space because there is great opportunity for brands to capture more market share in the RTD coffee/tea space,” he adds.

Stauffer says that the new “added sugar” callouts on Nutritional Facts labels are also driving consumer concern around sugar consumption.

“As a result, reduced-sugar RTD teas and coffees have benefited as consumers have moved away from full-sugar soft drinks and similar sugary beverages,” she notes.

While consumers say they want to reduce their sugar consumption, many still want to consume sweet drinks, especially when it comes to their coffee and tea, says Catherine Barry, director of marketing for the Frederick, Colo.-based National Honey Board. To create sweet products with less sugar, one solution is to opt for natural sweeteners such as honey.

“Honey has always played a starring role in lightly sweetened RTD teas, and this success has transferred over to RTD coffees, where many of the leading brands, including Starbucks, are using honey to sweeten and flavor their products,” she explains.

Using stevia as a sugar substitute is another possible solution for RTD coffee/tea manufacturers.

“Sweegen’s Bestevia Taste Solutions platform offers customers sweet taste solutions, along with an advanced application technology, and the most expansive next-generation rebaudioside portfolio in the industry,” notes McCormick. “We have the solutions ready to help solve the bitterness challenges coffee and tea can impart, as well as [to overcome] the hurdle of building back mouthfeel, bulk and texture for a sugar-like experience with less calories.”

Andrew Ohmes, global director – high-intensity sweeteners for Cargill, says consumers have a positive perception of stevia as a sugar substitute.

“When compared to 12 of the leading low- and no-calorie sweeteners, consumers consistently rank stevia leaf extract the most healthful, as well as having the most positive perception on the label,” he continues.

Cargill offers ViaTech stevia leaf extract, “which includes SKUs designed specifically for tea and coffee applications,” says Ohmes. It also produces EverSweet stevia sweetener, which he says is a significant leap forward in sweetness technology.

“It is based on two of the best-tasting components of the stevia leaf — Reb M and Reb D,” he emphasizes. “While these glycosides are rare in the stevia plant, we produce them via fermentation — creating a cost-efficient, great-tasting sweetener produced with the environment in mind.”

According to O’Brien, while sugar reduction is trendy, artificial sweeteners can negatively impact flavor.

“Sugar reduction is one way to formulate healthier RTD coffees and teas, but many artificial sweeteners compromise flavor — producing an unpleasant aftertaste due to their chemical composition,” she says.

BioNeutra’s VitaFiber IMO ingredient can be a solution here.

“To give people the refreshing flavor experience that they crave, our VitaFiber IMO replicates sugar’s properties — such as a starchy bulk for succulent mouthfeel — while reducing calories,” O’Brien notes.

BioNeutra also offers other fibers for manufacturers looking to impart varying levels of sweetness to their coffee and tea products.

“When looking for a less-sweet profile, VitaFiber PLUS is our blend of IMO and resistant dextrin that is both an alternative sweetener and dietary fiber,” O’Brien notes. “Later this year, we’re excited to launch our VitaFiber DX, which will have the highest dietary fiber and prebiotic with very little sugar composition.”


Combine it with dairy

Processors also could take advantage of the popularity of coffee and tea by incorporating them into their dairy products. After all, dairy already is a natural partner for these beverages — for example, over 60% of consumers add cream to their coffee, Maiocchi points out.

“Consumers will always have an affinity for tea and coffee,” Caputo emphasizes. “And for this reason, they’re an excellent ingredient for dairy brands to consider in formulation.”

Suzanne Collier Johnson, vice president, research and development for Greensboro, N.C.-based Mother Murphy’s Laboratories, says that coffee and tea ingredients pair very well with dairy products such as ice cream, cream and yogurt in terms of flavor. But processors might also opt to include such ingredients for their functional benefits.

“Both coffee and tea are loaded with polyphenols, which can lower the risk of type 2 diabetes, reduce chronic inflammation — which is a risk factor in heart disease — and help boost the immune system,” she says. “Coffee‘s antioxidants can neutralize free radicals in the system that can cause cell degradation, aging [and] certain cancers and may also help in treating fatty liver disease.”

And there’s evidence that coffee and tea may protect against Alzheimer’s and dementia, Collier Johnson notes.

“There are many wellness benefits of coffee and tea consumption, and many health-conscious consumers are eager to try new products containing these ingredients,” she emphasizes.

Anuhya Bhaskara, research and development manager for Amelia Bay Beverage Systems, Suwanee, Ga., also points to the myriad functional benefits that coffee and tea ingredients could bring to dairy products.

“Coffees, teas and tisanes have been heavily researched in the nutraceutical world for their cholesterol-reducing, anti-inflammatory, cognitive-boosting, cytoprotective, neuroprotective, immunoprotective, anticarcinogenic, anti-atherosclerotic, antioxidant, cardiovascular-health-promoting and sleep-inducing properties,” she explains.

In addition, coffee and tea ingredients tap into another wellness trend: sugar reduction, says Caputo. They can allow processors to create indulgent products with less sugar.

“Where standard energy drinks are typically high in sugar and other undesirable ingredients, dairy products that utilize tea and coffee ingredients can offer consumers an alternate option,” he adds.


Add flavor

Using coffee/tea ingredients can play into consumers’ desire to try new flavors and international varieties, says Brian Lippert, applications specialist, R&D for Mother Murphy’s. He’s seen milk combined with chai tea, bubble tea and English teas to add “international flair.”

“Consumers love and seek out unique taste experiences, which are extremely prevalent in the coffee, tea and dairy spaces with new, creative concepts appearing on shelves frequently,” Caputo adds. “When these categories converge, consumers tend to pay attention.”

Adding coffee or tea ingredients to dairy could also make the products carry a more “adult” flavor profile, Maiocchi points out.

“By adding coffee or tea to dairy products, it turns milk into a beverage adults want to consume,” she says.

To this end, RTD lattes are another big area of growth for both dairy and coffee.

“The dairy not only provides richness, but [it] also helps mellow out the astringency and bitterness that comes from tea and coffee,” says Julia Decruz, director of R&D and innovation for Prova Inc, Danvers, Mass.

For its part, Prova recently debuted a line of shelf-stable extracts. Decruz says the ingredients are “well-suited to fit any of product range such as RTD beverages, creamers and frozen desserts.”


Pay attention to formulation concerns

Processors that opt to include a coffee/tea extract will need to watch out for potential formulation issues resulting from the acidity of these products, however, notes Maiocchi.

The ingredients could add “extra acidity to nonacidic dairy bases,” which could cause curdling in certain products, Lippert says.

“Yogurt can handle additional acid better than ice cream can,” he adds.

And processors should take care to use flavors or extracts instead of formulating with coffee and tea beverages themselves, Decruz emphasizes. This is because coffee and tea can develop sour notes over time.

“Using flavors and extracts [with] your products not only enhances the flavor and provides better flavor impact; they will also provide much longer flavor stability and extend the shelf life of your finished product,” she notes.

Using flavors/extracts instead of actual coffee and tea is especially important when manufacturing ice cream, says Decruz. That’s because grinds “can get caught in the plate heat exchanger and/or homogenizer.”

And if processors want to use a coffee extract in their formulations, they should opt for one with a buffering agent.

“This is to prevent the dairy proteins from precipitating when adding the extracts,” Decruz explains.