June 5, 2025 – Innova Market Insights research analyzes product launches for the RTD (ready-to-drink) coffee and tea markets in the US and Canada. The research also dives deeper into the subcategories, positioning, and flavor trends.
RTD Coffee & Tea Launches Grow
In 2024, RTD coffee & tea product launches displayed a growth of 5.5% across the US & Canada region. The United States was the top country in the region for NPD (new product development). In both the US & Canada, iced tea is the top subcategory in RTD coffee & tea cluster launches.
A Wide Range Enhances Consumer Choice
RTD coffee & tea encompasses various bases such as frappe, mocha, earl grey, and rooibos, catering to diverse tastes, while a range of products are prepared with milk from varied sources like dairy and plants (oat, almond). Furthermore, cafe-style and barista-quality beverages enable consumers to enjoy a coffeehouse experience at home.
The fastest-growing RTD coffee bases in US & Canada are frappe coffee, mocha coffee, and espresso. For RTD tea, the fastest-growing bases are early grey, rooibos, and black tea. Consumer choice is increasing with different milk varieties being used as an ingredient alongside the traditional dairy, including oat, almond, and coconut.
Hydration Driving Purchases of RTD Coffee & Tea
Hydration is considered an essential need, with 35% of consumers in the US and Canada purchasing food and beverages for this purpose. Many consumers purchase RTD coffee and tea to meet their hydration needs. Lots of product launches display claims to highlight the hydration benefits, like “thirst quenching iced coffee” and “help quench your thirst.”
Clean Label Appeals to Health-Conscious Consumers
RTD coffee and tea products featuring clear, transparent labeling are increasingly popular, especially among health-conscious consumers who prefer unsweetened options. Claims like organic, GMO free, and no additives/preservatives help conscious consumers make purchasing decisions. For example, Pop and Bottle Organic Strawberry Matcha Milk Latte is certified USDA Organic. Between 2022 and 2024, organic claims retained a narrow lead in the positioning of RTD coffee & tea launches.
RTD Tea for Healthy Digestion
Many launches focused on gut health with the inclusion of prebiotics, probiotics, and fiber address growing consumer interest in digestive wellness. This is in line with one of Innova’s top F&B trends, “Flourish from Within”. Kombucha, a gut-healthy soft drink alternative made with fermented tea, is a natural source of probiotics, which help support a healthy digestive system. A recent example of a kombucha launch in the US is Rmbr Functional Kombucha Rose Berry, with rose, elderberry, and schisandra.
Functional Ingredients for Energy and Alertness
Offerings targeting energy/ alertness with L-theanine and caffeine, along with mood-boosting products, cater to consumers seeking enhanced mental and physical wellbeing. Coffee and tea trends reveal that 26% of consumers in the US and Canada report that energy & stamina is their primary concern related to physical health. This consumer interest is reflected in the growing number of product launches with energy/alertness claims. Furthermore, RTD coffee and tea product launches include mood-enhancing ingredients, such as yerba mate, THC, and adaptogenic mushrooms to support consumers’ mental wellness.
Handcrafted and Locally Sourced Brews
Using locally sourced ingredients such as fruits and honey from nearby farms helps support local farmers in the US and Canada. Locally sourced ingredients also drive growth by appealing to consumers’ preference for authenticity and quality, while supporting local economies. For example, Mood by Boochcraft Energizing Lemon Cherry Tea With Caffeine uses “real fruit, sourced from local farms”.
Handmade products highlight superior craftsmanship, embodying rich regional coffee & tea traditions. These authentic brews give consumers a taste of local heritage and offer an elevated beverage experience.
Diverse Fruit Options Cater to Dynamic Consumer Preferences
Diverse fruit-flavored options (e.g. berry, orchard, and citrus) offer refreshing choices that cater to various tastes and offer unique consumer experiences. In 2024, blackberry was the fastest-growing flavor in RTD coffee and tea in both the US and Canada, whereas lemon continues to be the leading flavor.
Inventive Flavor Innovations
Aligning with one of Innova’s top F&B trends for 2025, “Wildly Inventive”, flavors such as wedding cake and s’mores represent cross-category profiles, help products stand out through distinctive options and may appeal to consumers looking for indulgent options. Creating products with inventive flavors inspired by other categories, as well as flavors associated with special occasions like weddings and campfires, can drive growth by offering unique and memorable experiences.
An example is International Delight Love is Blind Wedding Cake Flavored Iced Coffee, combining a special occasion flavor and co-branding with a popular TV series. Limited edition/seasonal flavors appeal to consumers in the US & Canada, with 29% of whom saying that they influence their food and beverage choices.
What’s Next in the RTD Coffee and Tea Market in the US & Canada?
As the RTD coffee & tea market evolves, advances can be made with simple solutions. For example, coffee ice cubes are a smart alternative to regular ice, preventing dilution as they melt and preserving the rich flavor of iced coffee. This simple solution supports the iced coffee category as its innovation focuses on quality.
Elevating launches with skin-nourishing ingredients offer beneficial functional beverages for wellness-focused consumers. Rose petals, for example, were traditionally valued in Chinese medicine for skin health benefits, while lemon peel can support digestion, aid in body detoxification, and promote skin health. Ethnic flavors from diverse regions introduce unique, authentic tastes that cater to growing consumer interest in global cuisine. By expanding product offerings to include these distinctive flavors as well as other RTD coffee and tea trends, brands can attract new markets, foster cultural appreciation, and drive growth within the market.
This article is based on Innova’s Overview in RTD Coffee & Tea in the US & Canada report. This report is available to purchase or with an Innova Reports subscription. Reach out to find out more
