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"Amid rising demand for functional drinks, tea can lean into hydration and convenience, while hot chocolate can evolve through natural sweeteners and added nutrients."
Jack Friedlein, Analyst - Food & Drink
The German tea and hot chocolate market faces persistent volume declines, with price hikes boosting value sales. The matcha trend is moving from foodservice into homes, with at-home experimentation thriving as consumers recreate café experiences, partly due to lingering high prices. This spotlights speciality teas, encourages premiumisation and creates opportunities for retailers to offer unique, high-quality products that cater to this demand. Ingredients like the purple ‘ube’ yam or butterfly pea leaves add international appeal and striking visuals.
With moderation of alcohol and coffee, tea has room to grow as a part of daily rituals. 72% of tea drinkers drink tea alongside meals, compared to 50% drinking it on its own. To stand alone, tea must embrace elevated indulgence, offering more complex sensory experiences through depth in aroma and flavour profiles. For hot chocolate, evolution beyond sweetness is key, driven by sugar concerns. Brands must focus on creating better-for-you versions, with low-sugar options and functional benefits to remain a permissible indulgence.
The key opportunity for tea lies in cold brew and instant formats, which align with consumer interest in convenient hydration, driven by active lifestyles. By positioning tea as a drinkable food supplement, brands can tap into the growing demand for functional and wellness-focused beverages.
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