Hot Drinks Market Trends and Size – What’s “HOT” in 2021/2022

As a nation of coffee and tea drinkers, it’s not surprising that the hot beverage market is hotly contested by all the major brands and their various black coffee and tea options.

Although there are no signs of things changing in terms of traditional black coffee and black tea leading in terms of sales and popularity, there is a greater mix in variety.

In the following post, we are going to look at some of the most significant trends that are currently directing the hot beverages market or will be over the next year or so in 2021 and 2022.

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Hot Beverages Market – Where Tradition and Innovation Meet

In 2018, the global hot drinks market size topped at an amazing $250B and it is predicted by industry experts and manufacturers that it is going to continue seeing an annual growth rate of about 6% until 2025.

People drink hot beverages for a whole host of reasons and on specific occasions.

The majority of people who drink hot beverages regularly do so as part of their routine or habit as if by clockwork.

For instance, the very fact that we have a tea variety called English Breakfast that is one of the most popular in the UK and other countries too is a testimony that we are creatures of habit when it comes to hot drinks.

Then there’s the increase in coffee shops and chain store cafes. Even McDonalds provide coffee as an alternative to their carbonated drinks options.

The world’s interest in hot drinks is not slowing down. If anything, it’s increasing. Particularly, as you will see, from many of the unique options and choices people are making.

About a decade ago, something like Bubble Tea would have been considered a local delicacy, if it was that well known outside of its country of origin.

But as people look for more interesting flavours and health benefits, they are willing to push the boat out and try new things.

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Hot Drinks Market Share

As we noted at the outset and as has been the case for many decades now, coffee and tea hold their position as the most popular drinks in the hot beverage market.

Fruity infusions, herbal teas and green tea are showing signs of increasing demand and popularity, but not enough to knock off the behemoths quite yet.

Trends in the hot beverages market

Now let us take a look at some of the notable trends in the hot drinks market.

No one is really going to dispute the position of coffee and tea, but it’s what’s happening beyond those cornerstones that are fascinating, and in some ways how coffee and tea are produced, formulated and drunk that is most intriguing.

Though Black Coffee and Tea Hold Their Position – Fruity and Green Teas Are Increasing in Popularity

As noted above, coffee and tea, as they always have been for some time now, continue to dominate over all other hot drinks in the global hot beverage market.

One of the most interesting findings that would be hard to spot really without looking closely at the numbers is the popularity of black tea.

This still makes up a large majority of around 80% of the total tea market. However, there has been a noted, though very slow, decrease in its popularity.

While classics like English Breakfast, Assam and Earl Grey remain the biggest sellers, more people are turning to more herbal, fruity and green tea infusions.

Greater Variety of Coffee Options

Like with the tea market and the general hot beverage market where coffee is consistently on top, the coffee market is the same as it has been for some time and tradition is driving a lot of the numbers.

It’s no surprise that black coffee is the most popular.

However, many people now like fancy alternatives to straightforward coffee, with cappuccinos, flat whites, Americanos, lattes, and other varieties gaining in popularity.

This is likely due to the continued success of coffee shop chains like Costa Coffee and Starbucks.

Healthier Choices

That hot drinks manufacturers have been looking to produce healthier options for their customers is perhaps not new.

However, since the Covid-19 pandemic, there has been a greater emphasis by consumers looking for hot beverages that will help improve and maintain their health and wellness, and companies looking to capitalise on it.

Like mental health, in particular, has become a hot topic in recent years, more companies and brands will likely start produc9ing and selling products that are designed to help relieve stress and help customers relax.

Ingredients like l-theanine, naturally found in tea, are expected to be used and featured more and more.

Greater Emphasis on “Value for Money” and What That Means

The uncertain times we have been living through for the last 18 months and beyond has meant most people have had to make major changes to their budgets and lifestyles.

This has meant that more than ever before, people are making more considered and calculated decisions about the food and drink they buy.

It’s not so much that they are looking for “value for money” and only buying the very cheapest products.

Rather than just being about the money, it’s about choosing products that offer measurable and tangible benefits.

Recent market figures suggest that around 46% of all global consumers think of good value for money concerning high-quality products and ingredients, but products that fulfil singular or various specific needs and requirements.

That’s why we are starting to see many more hot beverages labelled as “single-origin tea” or “cold brew coffee” because consumers are becoming more educated and making informed decisions about the sourcing of these drinks, how they are made and recognise those descriptions as denoting quality.

Sustainably Sourced Ingredients

If you thought the Covid-19 pandemic would distract consumers from their growing interest and desire for more sustainably sourced ingredients in the products they buy, you were completely wrong.

If anything the pandemic intensified the importance of traceability and sustainability.

There is also a greater need for customers to feel connected to their local communities and local products.

According to the figures, around 47% of global consumers consider sustainable production methods crucial when buying products like hot beverages.

While 52% consider locally sourced ingredients and products more important than ever before.

It is getting to the stage where it is not just a “nice goal to achieve” to develop strong and trusted ethical credentials and values, it has become essential.

We expect that more locally sourced coffee and tea products will become more popular.

This means any labelling and information regarding the ingredients and where they came from, are important.

Organic food and beverages certifications along with evidence of Rainforest Alliance credentials are going to be even more commonplace in the future as a result.

Greater Interest in Small Luxuries

Having said that, there is still evidence to suggest that a trend that is not going to go away is towards luxury drinks.

Some brands, including Ferrero UK & Ireland, have found that when it comes to hot chocolate, it’s how it’s presented that can make the difference.

Although it’s towards the bottom of the hot drinks market due to lower volumes of sales compared to tea and coffee, it is still drunk by around 53% of people every week.

One of the things companies like Ferrero found is that when consumers want treats, those little special treats, they are willing to pay a bit more for something extraordinary food.

For example, companies that produce chocolate flakes for hot chocolate are starting to get more attention from the buying public.

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