Coffee & Tea

The retail market for coffee is divided into four primary product types: ground regular; instant (soluble); commercial-grade whole bean; and specialty coffee. Each type is further divided into two general subtypes—caffeinated/decaffeinated and nonflavored/flavored—and various type-specific product niches. Ready-to-drink (RTD) coffee in blended beverage form; powdered mixes in cappuccino/latte form; and liquid coffee concentrates round out the market.

The retail market for tea is divided into five major product segments: regular, instant/mix, RTD, specialty, and herbal. As with coffee, each tea segment is further divided into two general subsegments—caffeinated/decaffeinated and nonflavored/flavored—and various segment-specific product niches. Natural and organic teas, health teas, alternative tea/juice blends, powdered mixes based on chai varieties, and liquid tea concentrates have gained a solid presence in the market.

Coffee and tea share many fundamental similarities that justify their grouping into one overall market. In terms of the actual natural plants, both contain significant amounts of caffeine, and both tend to taste bitter rather than sweet (in their natural, non-flavor enhanced states). Moreover, both together form the core of the hot beverage market.

These similarities duly noted, there are several striking differences between coffee and tea. In terms of the actual natural plants, three basic dissimilarities are apparent. First, coffee is much stronger than tea in caffeine content, with tea containing one-half to one-third the caffeine of coffee. This has ramifications in terms of stimulative and diuretic appeal—the fundamental allures of caffeinated beverages.

Second, coffee plants are much more sensitive than tea plants. Coffee plants are difficult to grow and harvest, requiring an abundance of nutrient resources, intensive maintenance and labor, and extremely specific ecological conditions (geography, climate, environment) in order to thrive. Tea plants, on the other hand, are easier to grow, produce frequent yields that are easier to harvest, and are more ecologically flexible. All these differences have ramifications in contrasting price structures and price consistency.

Finally, a difference between coffee and tea is beginning to loom large in terms of health properties. For while coffee has some proven health benefits, tea far outranks it in benefits bestowed—primarily because of tea’s antioxidant attributes.