Tea and Ready-to-Drink Tea in the U.S., 4th Edition

Oct 1, 2011
192 Pages - Pub ID: LA6210935
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Tea continues to be a shining star in the U.S. beverage market. Bolstered by consumers’ unquenchable thirst for tea’s variety of flavors and healthy qualities, tea has shown resilience in the economic downturn. The category has experienced solid growth in the last year, with double digit gains from refrigerated tea. Ready-to-drink tea has been especially strong as well, particularly in natural food stores and convenience stores. And all teas are hot in foodservice. This report takes a comprehensive look at the market for tea in the U.S., whether a hot or iced tea drink ordered at a restaurant or a CPG marketer’s offering at the supermarket. The report examines the factors driving growth in the category. Readers will learn about critical mergers and acquisitions activity that is changing the distribution landscape for niche organic brands; the diverse range of tea offerings; teas’ functional benefits and the challenge in promoting them; the embrace of tea by fast food giants, coffeehouses, specialty retailers and tea rooms; trends in new product claims; demographics and psychographics of the tea consumer, and information on consumption habits; and the new, engaging ways in which tea marketers are connecting with customers.

This report examines the U.S. market for tea across the retail and foodservice spectrum, including ready-to-drink (RTD) tea, leaf (bagged and loose) tea, refrigerated tea and instant tea. The report segments and quantifies the market by channel and product type, providing historical sales figures and projections through 2016. The report examines market drivers and trends, retail sales-tracking data from SymphonyIRI and SPINSscan, new product trends based on data from Datamonitor’s Product Launch Analytics, and national consumer survey data, both from an extensive analysis of Experian Simmons data as well as proprietary online surveys conducted by Packaged Facts. The report also thoroughly maps out the competitive situation at the marketer and brand levels, with detailed profiles of AriZona, Bigelow, Celestial Seasonings, Coca-Cola (Gold Peak, Honest Tea and Nestea), Lipton (from Unilever and the Pepsi Lipton Partnership), McDonald’s sweet tea, Nestea, Snapple, Starbuck’s Tazo, Teavana, Turkey Hill and others.

Scope of Report

This report examines the U.S. market for tea including ready-to-drink (RTD) tea and leaf (bagged and loose) tea across the retail and foodservice spectrum. Retail channels include supermarkets and grocery stores, convenience stores, supercenters/mass merchandisers, warehouse clubs, drugstores, gourmet/specialty food stores, supplement chains, direct-sales channels including catalogs and Internet, and alternative channels such as department stores, kitchenware stores and bookstores. Foodservice channels include restaurants, coffeehouses, tea rooms and tea retailers, cafés and bars, and other foodservice establishments. For the purposes of this report, foodservice sales refer to prepared tea intended for immediate consumption, such as a cup of brewed tea, a dispensed glass of iced tea, or a single RTD container. Any packaged tea—such as a tin of leaves or a multi-pack of RTD bottles—sold through a foodservice establishment is considered a retail sale for market sizing purposes.

Excluded from the scope of this report are RTD products flavored with natural or artificial tea flavors unless they are specifically marketed as tea beverages, nor does it cover foods made with tea ingredients, such as tea-infused cookies and green tea ice cream.

Report Methodology

The information contained in this report was obtained from primary and secondary research. Primary research entailed consultations with beverage market sources, on-site examination of retail venues, and fielding a proprietary Packaged Facts online consumer survey focusing on beverage product shopper insights. Secondary research included extensive Internet canvassing and research- and data-gathering from relevant consumer business and trade publications; company reports including annual reports, press releases, and investor conference calls; company profiles in trade and consumer publications; government reports; and other food and beverage market reports by Packaged Facts.

Sales estimates are based on data from the above sources as well as SymphonyIRI data for mass-market channels (supermarkets, drugstores and mass merchandisers other than Walmart); SPINSscan data for natural supermarkets; published and estimated sales of major market participants; market size estimates from other sources, including those appearing in the trade press; the performance of relevant retail venues; consumer usage rates for beverage products; and new product introduction activity in the market. Data on new product introductions are based on Product Launch Analytics, a Datamonitor service.

Our consumer analysis draws primarily on two data sources. The first is national consumer survey data from Experian Simmons in its Fall 2010 National Consumer Study, which is based on 24,463 adult respondents surveyed from October 2009 through December 2010, as well as previous-year Experian Simmons surveys. Through an ongoing program of telephone and booklet questionnaire surveys of a large probability sample of consumers who represent a statistically accurate cross-section of the U.S. adult population, Simmons is able construct detailed demographic profiles across various consumer product and service markets, including the beverage market. The discussion of consumer patterns also draws on proprietary Packaged Facts online consumer surveys, including a May/June 2011 survey based on 2,000 U.S. adults (including 1,453 tea drinkers) who in aggregate are census representative on the primary demographic measure of age, gender, geographic region, race/ethnicity, and presence of children in the household.

Chapter 1: Executive Summary
Scope and Methodology
Scope of Report
Report Methodology
Varieties of Tea
Market Trends
Tea Grow Despite Tough Economy
Table 1-1: U.S. Retail Sales of Tea, 2007-2011 (in millions of dollars)
Supermarkets at 28% Share
Table 1-2: Share of U.S. Retail Sales of Packaged Tea by Channel, 2011 (percent)
SymphonyIRI-tracked Sales Show Solid Growth
Table 1-3: SymphonyIRI-tracked Sales of Tea: Overall and by Segment, June 2011 (dollars and volume)
RTD Tea Going Strong in Natural Foods Channel
Table 1-4: Sales of Leaf and RTD Tea Products in Natural Supermarket Channel, 2009-2011
Varieties of Tea Purchased by Type
Table 1-5: Tea Drinkers by Types of Tea Purchased, 2011
Tea Is Good For You, But Be Careful How You Say That
All’s Fair in the Tea Trade
Merger Mania
K-Cup Craze
How Sweet It Is for Foodservice
More Robust Tea Sales Growth on the Horizon
Table 1-6: Projected U.S. Retail Sales of Tea, 2011-2016 (in millions)
The Marketers
The Power of Tea Concentrated Among a Few
Table 1-7: Top Marketers of Tea at Food, Drug and Mass Merchandisers, 2010-11 (dollar sales and market share)
Many Big Players in Foodservice
Tea Retailers Take Center Stage
New Product Trends
Tea Leads All Beverages in Innovation
Tea Begins Rebound from Recessionary Lows
Table 1-8: Number of U.S. Tea Product Introductions: Reports and SKUs, 2007-2011
“Natural” the Top Claim, “Upscale” Recedes
Table 1-9: Top Marketing Claims/Package Tags for U.S. Tea Product Introductions: 10-year vs. 1-year Trend for Period Ending July 2011
Marketers Emphasize Functional Benefits
Kombucha Creates a Stir
New Products from Celebri-Teas
Foodservice Chains Bet Big on Tea
Consumer Trends
Tea Remains a Consumer Favorite
Figure 1-1: Household Purchasing of Retail Tea Products, 2010 (percent and number)
Table 1-10: U.S. Households Purchasing Retail Tea Products, 2006-2010 (number in millions and percent)
Regular vs. Decaf
Figure 1-2: Household Purchasing of Leaf Tea: Regular vs. Decaffeinated and Bagged vs. Loose, 2010 (percent)
41% of Households Buy Lipton Leaf Tea
Figure 1-3: Top Brands of Leaf Tea by Household Purchasing Levels, 2009 (percent)
Purchasing Patterns Emerge


Chapter 2: Market Trends
Retail Market Size and Composition
Retail Tea Sales Rise to $6.5 billion
Table 2-1: U.S. Retail Sales of Tea, 2007-2011 (in millions of dollars)
A Multi-Channel Champion
Table 2-2: Share of U.S. Retail Sales of Packaged Tea by Channel, 2011 (percent)
SymphonyIRI-tracked Sales Show Solid Growth
Table 2-3: SymphonyIRI-tracked Sales of Tea: Overall and by Segment, June 2011 (dollars and volume)
RTD Tea Going Strong in Natural Foods Channel
Table 2-4: Sales of Leaf and RTD Tea Products in Natural Supermarket Channel, April 2009 - April 2011
Medicinal Tea Leads the Leaf Tea Category
Table 2-5: Sales of Leaf Tea in the Natural Supermarket Channel, April 2009 - April 2011 (dollars)
Tea Remains One of the Beverage Industry’s Bright Spots
Table 2-6: Beverage Dollar Sales and Market Share by Category, June 2011
Table 2-7: Fastest-Growing Beverage Categories, June 2011
Foodservice Composition
House Wine of the South Spurs Foodservice Growth
“Money in a Cup”
Foodservice Fast Facts
Vending a Key Tea Channel
Fast-Growing Tea Companies
Tea Behaviors
Varieties of Tea Consumed and Single-Serve Purchase Behavior
Table 2-8: Tea Drinkers by Types of Tea Purchased, 2011
Market Dynamics
FDA Cracks Down
Health Studies Abound
Fair Trade Shows Big Jump
Tea Companies Marry and Divorce
Single Cup Platforms Become New Growth Drivers
Tea Marketers Get Creative
Tea 2.0
Looking Ahead
More Robust Tea Sales Growth on the Horizon
Table 2-9: Projected U.S. Retail Sales of Tea, 2011-2016 (in millions)


Chapter 3: The Marketers
Competitive Overview - Packaged Goods
A Handful of Marketers Dominate
Table 3-1: Leading Marketers of Tea at Food, Drug and Mass Merchandisers, April 2011 (dollar sales and market share)
Lipton Has Leaf Tea in the Bag
Table 3-2: Top Marketers and Brands of Bags/Loose Tea by SymphonyIRI-tracked Sales and Volume, April 2011
RTD Marketers Forge Ahead
Table 3-3 Top Marketers and Brands of RTD Tea by SymphonyIRI-tracked Sales and Volume, April 2011
Instant Provides Little Gratification
Table 3-4: Top Marketers and Brands of Instant Tea by SymphonyIRI-tracked Sales and Volume, April 2011
Refrigerated Tea Makes a Case for Itself
Table 3-5: Top Marketers and Brands of Refrigerated Tea by SymphonyIRI-tracked Sales and Volume, April 2011
Competitive Overview - Foodservice
Many Foodservice Tea Suppliers
Competitive Overview - Tearooms and Specialty Stores
A Highly Fragmented Market
The Teavana IPO
Table 3-6: Teavana’s product mix, 2009-2011
The Marketing of Teavana


Chapter 4: Brand Profiles
AriZona (AriZona Beverage Co.)
A Leader in RTD
Growing and Sought After
Capitalizing on a Legendary Golf Drink
Caught in an Immigration Controversy
AriZona Expands Its Packaging Options
A Straightforward Strategy
Bigelow Tea (R.C. Bigelow, Inc.)
A Constant Contender
Partnering with The Great One
Healthy Introductions Abound
Celestial Seasonings (The Hain Celestial Group)
Herbal Leader Experiences Solid Growth
Celestial Seasonings and K-Cups
Couponing, In-store and Social Media
Gold Peak (The Coca-Cola Company)
Pushing for More Share
New Packaging and Delivery Systems Drive Growth
Lipton (Unilever and PepsiCo)
Despite Weak Sales, Lipton Still Dominates
How Pepsi-Lipton Segments the RTD Market
Brisk Takes on the Year’s Biggest Audience
Partnering with Green Lantern and Stickybits
New Products Make a Splash
Nestea (Coca-Cola and Nestlé)
Slipping Sales in RTD
Nestea Emphasizes Online
Red Diamond
Rising Star in Refrigerated Tea
Snapple (Dr. Pepper Snapple Group)
A Turnaround Story
The Northeast Is Snapple’s Stronghold
The Importance of Packaging
Capitalizing on TV Tie-Ins
Turkey Hill
The Big Chilled
Twinings
By Appointment to Her Majesty


Chapter 5: New Product Trends
Overview
Tea Product Launches Pace All Categories
Table 5-1: Number of U.S. Non-Alcoholic Beverage Product Reports/SKUs, July 2011
Tea Begins Rebound from Recessionary Lows
Table 5-2: Number of U.S. Tea Product Introductions: Reports and SKUs, July 2007 - July 2011
What’s in a Claim?
Table 5-3: Top Marketing Claims/Package Tags for U.S. Tea Product Introductions: 10-year vs. 1-year Trend for Period Ending July 2011
Packed Full of Flavors
Table 5-4: Top Flavors in U.S. Tea Product Introductions: 10-years vs. 1-year Trend for Period Ending July 2011
Same Players Introduce New Products
Table 5-5: Top Companies in U.S. Tea Product Introductions, July 2001 - July 2011
Table 5-6: Top Companies in U.S. Tea Product Introductions, July 2011
Packaged Goods Trends
Functional Benefits Popular in New Tea
Coca-Cola’s “Teavolution of Water”
The Curious Case of Kombucha
Bigelow’s Healthy Offerings
Could’ve Had a V8
Tulsi Touches Down
Celebrities Jump on the Tea Bandwagon
My Country Tis of Tea
New Product Trends in Foodservice
The Big Chains Emphasize Tea
Starbucks Gets Bigger
Teavana Unveils New Teas for the 2010-11 Season
Popeyes Gets Sweet
Other New Products Debut in Foodservice
Notable Products at the World Tea Expo
2011 World Tea Expo Best New Product Award Winners
Tea as an Ingredient Winner (Tie)
TEAS' TEA Low-Calories by ITO EN
Packaging Winner (Tie)
Tiesta Tea Tins by Planet Canit
Packaging Winner (Tie)
C+SWISS by Chill Drinks
Innovation Winner
Drip Tea by Sugimoto America, Inc
Open Class Winner (Tie)
Chaitea by Gourmetti Brands Inc.
Open Class Winner (Tie)
Incredible Lid V2 for Hot Beverage by Idea House International, Inc.


Chapter 6: Consumer Trends
Overview
Note on Experian Simmons and Packaged Facts Surveys
Household Purchasing Rates for Retail Tea Products
Figure 6-1: Household Purchasing of Retail Tea Products, 2010 (percent and number)
Table 6-1: U.S. Households Purchasing Retail Tea Products, 2006-2010 (number in millions and percent)
Retail vs. Restaurant Purchasing Rates
Figure 6-2: Tea Drinker Purchasing Patterns: Retail vs. Restaurant, February 2009 (percent)
Figure 6-3: Tea Drinker Purchasing Patterns: Retail or Restaurant Purchasing Patterns for Selected Specialty Tea Products, February 2009 (percent)
Consumer Demographics and Psychographics: Leaf Tea
Overall Usage Patterns for Leaf Tea
Table 6-3: Demographic Indicators for Purchasing Leaf Tea, 2010 (percent, total number and index)
Table 6-4: Household Usage of Leaf Tea by Purpose: Hot Tea vs. Iced Tea, 2010 (percent and number)
Hot vs. Iced Tea
Table 6-5: Select Demographic Indicators for Purchasing Leaf Tea to Make Hot Tea, 2010 (percent, total number and index)
Table 6-6: Psychographic Indicators for Using Leaf Tea to Make Hot Tea, 2010 (percent, total number and index)
Table 6-7: Demographic Indicators for Purchasing Leaf Tea to Make Iced Tea, 2010 (percent, total number and index)
Table 6-8: Psychographic Indicators for Purchasing Leaf Tea to Make Iced Tea, 2010 (percent, total number and index)
Bagged vs. Loose Tea
Table 6-9: Household Purchasing of Leaf Tea by Type: Bagged vs. Loose, 2010 (percent and total number)
Table 6-10: Demographic Indicators for Using Bagged Tea, 2010 (percent, total number and index)
Table 6-11: Demographic Indicators for Using Loose Leaf Tea, 2010 (percent, total number and index)
Table 6-12: Psychographic Indicators for Purchasing Loose Leaf Tea, 2010 (percent, total number and index)
61% of Households Buy Regular Tea
Table 6-13: Household Purchasing of Leaf Tea: Regular vs. Decaffeinated, 2009 (percent and total number)
Figure 6-4: Household Purchasing of Leaf Tea: Regular vs. Decaffeinated and Bagged vs. Loose, 2010 (percent)
Flavor Preferences
Table 6-14: Household Purchasing of Leaf Tea by Flavor, 2010 (percent and total number)
Figure 6-5: Retail Tea Purchasing Patterns by Flavor, February 2009 (percent)
Figure 6-6: Restaurant Tea Purchasing Patterns by Flavor, February 2009 (percent)
Regular Blend Drinkers
Table 6-15: Demographic Indicators for Flavors Used: Regular Blend Tea, 2010 (percent, total number and index)
Green Tea Drinkers
Table 6-16: Demographic Indicators for Flavors Used: Green Tea, 2010 (percent, total number and index)
Table 6-17: Pyschographic Indicators for Flavors Used: Green Tea, 2010 (percent, total number and index)
Herbal Tea Drinkers
Table 6-18: Demographic Indicators for Flavors Used: Herbal Tea, 2010 (percent, total number and index)
Table 6-19: Pyschographic Indicators for Flavors Used: Herbal Tea, 2010 (percent, total number and index)
Fruit/Spice-Flavored Tea Drinkers
Table 6-20: Demographic Indicators for Flavors Used: Fruit/Spice-Flavored Tea, 2010 (percent, total number and index)
Table 6-21: Pyschographic Indicators for Flavors Used: Fruit/Spice-Flavored Tea, 2010 (percent, total number and index)
14% of Households Are Heavy Consumers of Leaf Tea
Table 6-22: Household Consumption Levels for Leaf Tea, 2010 (percent and total number)
Table 6-23: Demographic Indicators for Heavy Household Consumption of Leaf Tea, 2010 (percent, total number and index)
Table 6-24: Psychographic Indicators for Heavy Consumption of Leaf Tea, 2010 (percent, total number and index)
41% of Households Buy Lipton Leaf Tea
Figure 6-7: Top Brands of Leaf Tea by Household Purchasing Levels, 2009 (percent)
Table 6-25: Demographic Indicators for Purchasing Leaf Tea: By Brand, 2010 (index)
Table 6-26: Psychographic Indicators for Purchasing Leaf Tea: By Brand, 2010 (index)
Consumer Demographics and Psychographics: Ready-To-Drink Cold Tea
45% of Households Purchase RTD Cold Tea
Figure 6-8: Household Purchasing of RTD Cold Tea, 2010 (percent and number)
Table 6-27: Demographic Indicators for Purchasing RTD Cold Tea, 2010 (percent, total number and index)
Table 6-28: Psychographic Indicators for Purchasing RTD Cold Tea, 2010 (percent, total number and index)
Regular vs. Diet RTD Tea
Table 6-29: Demographic Indicators for Purchasing Regular RTD Cold Tea, 2010 (percent, total number and index)
Table 6-30: Psychographic Indicators for Purchasing Regular RTD Cold Tea, 2010 (percent, total number and index)
Table 6-31: Demographic Indicators for Purchasing Diet RTD Cold Tea, 2010 (percent, total number and index)
Table 6-32: Psychographic Indicators for Purchasing Diet RTD Cold Tea, 2010 (percent, total number and index)
22% of Households Buy RTD Lipton
Figure 6-9: Top Brands of RTD Cold Tea by Household Purchasing Levels, 2010 (percent)
Patterns by Brand
Table 6-33: Demographic Indicators for Purchasing RTD Cold Tea: By Brand, 2010 (index)
Table 6-34: Psychographic Indicators for Purchasing RTD Cold Tea: By Brand, 2010 (index)
Consumer Demographics and Psychographics: Instant Iced Tea Mix
27% of Households Buy Instant Iced Tea Mix
Figure 6-10: Household Purchasing Instant Iced Tea Mix, 2010 (percent and number)
Table 6-35: Demographic Indicators for Using Instant Iced Tea Mix, 2010 (percent, total number and index)
Table 6-36: Psychographic Indicators for Using Instant Iced Tea Mix, 2010 (percent, total number and index)
Patterns by Sweetened/Unsweetened Formula Type
Table 6-37: Demographic Indicators for Using Sugar-Sweetened Instant Iced Tea Mix, 2010 (percent, total number and index)
Table 6-38: Psychographic Indicators for Using Sugar-Sweetened Instant Iced Tea Mix, 2010 (percent, total number and index)
Table 6-39: Demographic Indicators for Purchasing Unsweetened Instant Iced Tea Mix, 2010 (percent, total number and index)
Table 6-40: Psychographic Indicators for Using Unsweetened Instant Iced Tea Mix, 2010 (percent, total number and index)
Table 6-41: Demographic Indicators for Purchasing Sugar-Free Sweetened Instant Iced Tea Mix, 2010 (percent, total number and index)
Table 6-42: Psychographic Indicators for Using Sugar-Free Sweetened Instant Iced Tea Mix, 2010 (percent, total number and index)
6% of Households Are Heavy Consumers of Instant Iced Tea
Figure 6-11: Household Consumption Levels for Instant Iced Tea: Number of Glasses, 2010 (percent and total number)
Table 6-43: Demographic Indicators for Heavy Household Consumption of Instant Iced Tea, 2010 (percent, total number and index)
Table 6-44: Psychographic Indicators for Heavy Consumption of Instant Iced Tea, 2010 (percent, total number and index)
13% of Households Buy Lipton Instant Iced Tea
Figure 6-12: Top Brands of Instant Iced Tea Mix by Household Purchasing Levels, 2010 (percent)
Table 6-45: Demographic Indicators for Purchasing Instant Iced Tea Mix: By Brand, 2010 (index)
Table 6-46: Psychographic Indicators for Using Instant Iced Tea Mix: By Brand, 2010 (index)

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