A Quality Cuppa

By Valerie Ward

Canadians love their coffee — and increasingly, their tea as well. Our per capita consumption of coffee is among the highest in the world, and our climbing tea consumption is forecast to jump 40 per cent by 2020, says a trends report commissioned by Agriculture and Agri-Food Canada.

Collectively, we drink billions of cups of these beverages each year, purchasing them from grocery stores and foodserviceoutlets or sipping them at the office. A majority still buys traditional processed coffee and tea blends, but product expectationsare shifting as consumers become more health-conscious andfood-savvy. In addition to good taste, consumers are demanding the quality, sustainability and unique flavours often associated with specialty coffees and teas. They’re also experimenting with brewing technologies and formats that deliver a convenient, customized product experience.

The end result is that the specialty niche is reshaping the entire sector. “It’s a case of the tail wagging the dog,” says Adam Pesce, director of coffee at Reunion Island Coffee and a spokesperson for the Canadian Coffee Association.

Hyper focus on quality and taste

Driven by small, independent roasters, today’s specialty mindset is hyper-focused on quality and taste. “It used to be all about flavours like Irish coffee or salted caramel,” Pesce says. “Today, it’s more about the coffee itself — respecting the bean, the roasting process and the work of the farmer.”

Current trends include a shift to single-origin coffees rather than blends, and a preference for lighter roasts that better express a variety’s characteristics. They also include organic and ethical certifications that tell consumers where and how the products have been grown, processed and traded. “Consumers really value that transparency,” Pesce notes.

Large providers of good everyday coffee are paying attention to these developments. For example, Tim Hortons now offers a direct trade coffee, Starbucks has introduced a blond roast, and Van Houtte sells single-origin coffees in K-cup format.

Fresh, premium, small-batch

At the same time, the market is creating opportunities for small independents, such as B.C.-based Kicking Horse Coffee. Launched in 1996 from the owners’ garage, by 2012 it was ranked among Canada’s top 10 commercial brands. Kicking Horse sells in every major grocery store nationwide and is making inroads in the U.S.

CEO and co-founder Elana Rosenfeld attributes this success to Kicking Horse’s long-time focus on quality and freshness, along with its snappy branding. “From the beginning, we focused on blends of small-batch, premium coffee, roasted to a specific flavour profile, and packaged the same day to maximize freshness,” Rosenfeld says. “We were also the first in Canada to offer whole bean, shade-grown, 100% organic and fair trade coffee. I think we played a part in raising consumer awareness of those values.”

In the near future, Kicking Horse plans to reach still more consumers by offering ground coffee. “Research shows that 50 per cent of the market buys ground coffee, and 70 per cent of specialty coffee drinkers are willing to try ground,” Rosenfeld says. “It’s a market with big potential for us.”

Single-serve and cold brew

Perhaps the biggest growth driver for retail coffee is consumer demand for personalized single-serve beverages, says Stéphane Glorieux, Keurig Canada’s president.

Keurig’s high-tech brewing machines and lines of pod coffees from multiple providers not only offer convenience, consistency and choice, they make it possible for people to individualize their beverage experience, he says. “The machines are engineered so that, at the touch of a button, I can make myself a cup of espresso and my wife can prepare her light roast one after the other and with no migration of taste.”

Keurig’s newest K2.0 brewer will be able to customize beverages even further, sensing whether a cup or a carafe is being used and adjusting the preparation accordingly. Before long, consumers will be able to prepare cold beverages using their Keurig machines, including carbonated and ice teas.

Adam Pesce appreciates single-serve’s value-add, especially on the foodservice side. “Whether the coffee is made manually or with a machine, you can bring customers an individual experience by selecting a certain bean, for example, and brewing the coffee to the strength the customer wants.”

Another emerging trend is cold-brewed coffee, in which the beans are brewed with cold water to make a concentrate. “It’s ideal for summer and popular in West Coast cafés this year,” Rosenfeld says. “It’s delicious served on ice with a bit of cream or maple syrup.”

Tea’s functional benefits

As with coffee, the tea market is shifting in response to specialty values such as premium quality, more diverse flavours and product certifications. Black blends still predominate, but there’s increased demand for country-of-origin, herbal, green and premium black teas, says Louise Roberge, president of the Tea Association of Canada.

The revival of interest in tea stems from factors such as increased global travel and rising immigration from Southeast Asia, where tea is the beverage of choice. But most of all, Roberge says, health-conscious consumers are attracted by tea’s functional benefits, especially the high levels of antioxidants that help protect against cancer and heart disease. As a result, not only are people drinking more tea, they’re able to consume it in new ways, in everything from juices and chocolate bars to pharmaceutical supplements and extracts.

“People are looking for healthy alternatives to sugar-laden RTD pro-ducts,” says David Segal, founder of the DAVIDsTEA chain that retails loose tea and tea accessories. “We’re able to bring them 150 unique-tasting teas from around the world, all without sugar or calories.”

In addition to organic and straight black teas, DAVIDsTEA sells white, green, oolong, rooibos and maté collections, all with different oxidization levels. Its herbal and fruit blends often feature ingredients with health properties, like cinnamon, ginger and pomegranate.

New experiences, formats

This health-oriented, artisanal approach has struck a chord with consumers. Six years after opening its first outlet, the chain operates 115 stores across Canada and 21 in the U.S. “We’re changing the way people shop for tea,” Segal says. “We’ve created a fun, upbeat atmosphere where people can engage their senses and learn how easy and enjoyable it is to make and drink tea.”

Tea drinkers are also opting for new formats, using fewer tea bags, and trying loose leaf or pods instead. Mainstream tea-makers are diversifying in response. For example, Unilever, which owns the Lipton, Salada and Red Rose brands, launched K-cups in 2013 and is adding new flavours such as Enlighten Green, Indulge Flavoured Black, Chai Delight and Refresh Iced Sweet Tea. What’s more, the company is ramping up commitments to sustainability and social responsibility, pledging that 100% of its tea sold in Canada will be Rainforest Alliance Certified by the end of 2014.

According to Unilever spokespersons, in such a competitive market, it’s essential to evolve and provide consumers with the variety they need and expect.