Trend: Hard Tea & Coffee

Offering natural energy and a healthier substitute for sugary carbonated soft drinks (or ‘CSD’), coffee and tea are on the rise. Globally, coffee culture is growing, with on-premise innovations, RTD (or ‘ready to drink’) launches and hybrids all pushing the category forward in many directions. The US has been particularly fertile for RTD coffee innovations, especially in the form of cold brew. Tea is similarly seeing an innovation boom, with many RTD tea brands jumping into the market in competition with CSD and flavoured waters.

Launched nearly 20 years ago, Boston Beer Co Twisted Tea (+6.5%) dominates the hard tea category with robust sales reaching 1.2m HLs in 2018 in the US. The hard tea has become one of the most important brands within the company’s portfolio and has released a series of products tapping into millennials love of flavour and variety.

Simultaneously, the alcoholic RTD category is seeing its own boom. Malt-based cocktails are having a resurgence and spirits-based RTDs are bringing a craft edge to the space. In the US, IWSR estimates the Hard Seltzer category will have increased over 200% by the end of 2019 reaching 7.4m HLs, representing 46% of all Flavoured Malt Beverages. And much as tea has an opportunity to compete with flavoured water in the non-alcoholic segment, hard tea could be a contender against spiked seltzers. With innovation brewing in this area, it makes sense that RTDs should collide with coffee and tea.

While Twisted Tea is currently dominating the category, Boston Beer knows the high sugar product does not align with some of the major consumer desires in picking a RTD. This is why the company launched Wild Leaf Craft Hard Tea in 2019. The new addition to the Boston Beer portfolio contains 130 calories and 11g of sugar per drink, compared to Twisted Tea’s 204 calories and 25g of sugar.

AB InBev launched its own craft hard tea brand in 2019. Wandering Whistler Brewed Alcohol Teas are “slightly sweet” teas that contain 120 calories per serving. The company launched two flavour variants, Earl Grey & Elderflower and Jasmine, both made with natural flavours and inspired by global locations.

Even lower in calories, US-based Loverboy Sparkling Hard Tea is a craft brand sweetened by monk fruit. The brand offers three flavours made with organic tea, including Hibiscus Pom, White tea Peach and Black Tea Lemon. The drinks contain 90 calories per can, and zero sugar.

While hard green teas do not overtly claim to offer health benefits, they surely gain from the ‘healthy’ reputation of green tea.

Green tea is widely considered to be a wellness beverage containing heart-healthy polyphenols and antioxidants. And while hard green teas do not overtly claim to offer health benefits, they surely gain from the ‘healthy’ reputation of green tea and its restorative properties. RTD cocktail brand Vrai offers a green tea variant. Described as “sort of earthy, sort of fruity and totally portable”, the 5.5% ABV drink is made with vodka and natural flavors.

On the coffee front, many brands are tapping into the popularity of cold brew coffee. Cold brew coffee has seen US sales and new product developments surge. And while the nascent hard cold brew category is much smaller, many brands are throwing their hat in the ring.

Cold brew is also making an appearance in a number of hybrid beverages that fall under the umbrella of hard cold brew. Hard kombucha brand Kyla offers a Cold Brew Coffee variant, described as “a blend of roasty cold brew with creamy, light sweet vanilla undertones” – this product is one of many following the hard kombucha trend flagged by IWSR.

KEY TAKEAWAYS

• With both the RTD coffee and tea categories growing, as well as the flavoured malt beverage category, it is logical that the hard coffee and tea segments are now also on the rise. These products are mostly launching in the US, with some also appearing in Canada and the EU.
• Hard tea is not entirely new – with some notable brands launched nearly 20 years ago – but the category is currently becoming revitalized as brands create new options that address the desire for lower sugar, natural ingredients, clean labels and sophisticated flavours.
• Hard coffee falls into two camps: cold brew hard coffee and the more indulgent creamy hard coffee. These RTDs offer caffeine plus alcohol, a combo that so far has skirted the criticism that products such as Four Loko have faced, perhaps due to their craft identities.

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Radius, the IWSR’s innovation tracker, brings you the latest product launches and new consumer trends driving the market. Available online or as quarterly trend reports.

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