The Start of a Brew-tiful Friendship

Coffee and Tea sales in Canada have been undergoing volatility but Remain Strong

By: Brennah Doyle

If you didn’t already know, coffee is the number one beverage in Canada by sales and consumption. Consider these statistics: On average, Canadians consume 5.03 million 60 kg bags of coffee per year and is more popular than tap water in Canada with 71% of Canadians drinking coffee regularly compared to 67% for tap water. Canadians spend on average $35.21 per month on coffee and drink 2.8 cups of coffee per day. The coffee market in Canada is expected to reach $6.2 billion by 2030.

While tea is nowhere as popular, Canadians also are still big consumers. The value of tea sales in Canada is US $ 271 million and is expected to reach a projected revenue of US$ 403.9 million by 2030-a compound annual growth rate of 6.9% and projected revenue of US$ 403.9 million.

While sales are increasing, challenges remain.

Trade Disputes Complicate the Picture

Ground coffee prices in Canada have surged by 19% since the start of 2025, according to Statistics Canada—making it one of the fastest-rising food items on grocery store shelves this year. Part of the problem is that since March Canadian importers have been paying an additional 25% tariff on coffee imported from the US- a counter-tariff, introduced as part of Ottawa’s retaliatory measures even though Canada doesn’t even grow coffee. This has lead many industry analysts saying they are punishing Canadian consumers and businesses.

The same 25% tariff remains on tea imports routed through the U.S., even when the product originates from the Global South. For example, tea grown in Malawi but warehoused or processed in the U.S. is still hit with the full tariff—penalizing African producers rather than American exporters.

Green coffee beans imported directly into Canada from origin countries—including Brazil, Colombia, and Vietnam— remain subject to a 0% duty on importation into Canada.  In North America and specifically in Canada coffee is imported through specialized US or International based importers who integrate highly complex supply chains. Green Coffee is generally contracted / bought through a US based importing company.

It is thus very hard to avoid importation from the US and until the trade disputes are resolved retailers can continue to expect a volatile market.

Coffee Sales Still Strong

This year, Level Ground Coffee Roasters based in Victoria B.C. saw an increase in sales and brand loyalty. The company was started in 1997 with a mission to trade fairly and directly with
small-scale farmers in developing countries and has grown to import the annual
harvest of 5,000 farmers from 10 countries in South America, East Africa and South
Asia.

Since the company sources directly from small scale farmer cooperatives, they have been largely unaffected by trade issues as none of their incoming shipments travels through the USA.

Stacey Toews, co-founder, says the company experienced a significant lift in sales from existing accounts resulting in the hiring of multiple staff to assist with the increased sales. Much of the increase can be attributed to a boost in local consumerism.

“Being a 100% Canadian owned and operated business has attracted consumer’s attention, especially in BC where we are supporting the local economy with jobs and many contracts as we source our operational supplies.” says Toews. “It seems more people are wanting to support Canadian brands, and I sense we may be feeling ‘extra love’ from consumers because Level Ground has always been known for championing small-scale coffee cooperatives.”

Meanwhile Level Ground Coffee Roasters continues to run strong with one of their most sought-after products, the Swiss Water decaf, processed in Canada without chemicals. The dark roast coffee includes hints of dried fruit, dark chocolate and baking spice. Products like Level Ground’s Swiss Water decaf and medium roasts have been gaining momentum and are in strong double-digit growth in 2025. The company continues to succeed despite the challenges of rising cost.

“During recent unprecedented global coffee prices, our sourcing and quality assurance teams have been working especially hard, to source premium beans for our single origins & blends that deliver ongoing value to our customers while keeping the price within reach.” says Toews.

A variety of medium roasts are available like Andes, Peru, and Ethiopia blends. A fair-trade certified company with unique roast flavours it is no wonder that Level Ground continues to thrive in the hot beverage market.

Tea Sales Also on the Rise

Rod Sinclair, managing director at Traditional Medicinals considers wellness teas as a way to influence the growth of tea sales in Canada.

“The Tea category has been relatively flat to low single digit growth over the past several years. Wellness teas are sparking some growth as consumers seek out the many different health benefits of teas,” notes Sinclair.

Health and wellness have become important components for shoppers choosing their beverages — and not only for tea products. Functional beverages and ready to drink beverages are trending too. Shabnam Weber, president of the Tea & Herbal Association of Canada shares that consumers are looking for a versatile ­­­beverage that does more than just one thing.

Weber highlights the importance of innovation, encouraging retailers to think outside the box – tea is more than just a traditional hot beverage.

“I always recommend cross-promotion – placing tea products with cookies for example or doing a cheese pairing with the cheese aisle. Think of ways people can think of tea outside of their habitual use and you can get them to purchase when they weren’t expecting to. Tastings in store are also truly important – get a customer to taste a product, and I guarantee they will make the purchase.”

“Tea sales are somewhat seasonal, with a slight uptick over the winter months as consumers seek the comfort of a warm tea or to help relieve symptoms of the cough & cold season. This is the ideal time to promote & display!” adds Sinclair.

For independent wellness companies like Traditional Medicinals, social media can make all of the difference.

“The impact of social media can be very positive and very disruptive. A major Tik-Tok trend can easily wipe out our supply, especially when you source herbs from Europe or Asia.” says Sinclair. “These trends are almost always related to sharing the health benefits, last year Spearmint took off, this year it’s Dandelion.” states Sinclair.

Hot Chocolate Heats Up Too

Often overlooked in the hot beverage category, hot chocolate is a perennial favourite with consumers. For 2024, Chocolate Drink Consumption per Capita in Canada slightly declined to 4.14 Liters from 4.2 Liters-effectively a stable market. However, by 2028, it is projected to be 3.92 Liters. This represents a year-on-year decrease starting from 1.69% in 2025, tapering to 1.01% by 2028. The five-year CAGR indicates an average annual decrease of approximately 1.38%.

Maheep Bedi product development and QA assistant at Medallion Milk, who produce powdered milk products, says they have noticed a few new customers due to their company being 100% Canadian.

“We source all parts and anything else needed for the business from Canadian companies” Bedi adds.

With the success of their premium chocolate milk powder, Medallion Milk is looking onwards to new products that provide shoppers with more options. For instance, the brand-new banana milk from Medallion Milk is coming soon, along with other fruit milks and unique flavour combinations.

In addition to new milk flavours, the company is introducing many new Medallion Milk coffee creamer flavours, including the iconic pumpkin spice flavour making its’ debut this fall. French vanilla and caramel flavours are set to release after the pumpkin spice launch. The development of a new high protein and enhanced powder milk is also in the works. The powder milk contains 18g of protein per 250mL serving and catch the eyes of buyers due to its longer shelf life, lower cost, and no need for refrigeration.

“We are producing many desirable products that are niche but innovative in the shelf-stable with clean and minimal ingredients market. It tastes great while only having 3 ingredients. No gums, no emulsifiers or stabilizers, no sugar, no stevia.” Bedi shares.

Bedi advises that grouping products that go well with coffee together in the same line of sight helps sales. “For example, our coffee creamer will be coming in a few different flavours. Grouping these with coffee beans or coffee machines, tools, etc., will help the consumer see the connection that a new flavour of coffee creamer will have.” says Bedi.