Tea sales climb steadily on product development, emergence of tea houses & innovative marketing

Source: iStock

Ongoing development of ready-to-drink tea and growing awareness of the health benefits and cultural importance of tea continue to drive sales of the beverage in the US, but future growth will also rely on new products and innovative marketing, according to new research from Packaged Facts. 

Estimated at $7.25 billion, the US tea market grew 5.9% in 2015 over the prior year – a trajectory that Packaged Facts predicts will continue until the retail sales of tea in the US reaches $9 billion in 2020, according to the report published in late December.

“Growth in the industry can largely be attributed to ready-to-drink” tea in cans and bottles, which grew 7.2% in dollar sales in 2015, according to the report. This is slightly behind the growth of refrigerated teas, which were up 9.2% in 2016 over the prior year, the report notes citing IRI data.

Flavors, health & culture pave path for tea sales

The success of these categories can be attributed partly to manufacturers developing exotic flavors – especially fruit combinations, the report says.

“For mainstream RTD brands, peach tea has been a hit flavor with consumers,” it adds.

Likewise, products highlighting tea’s health benefits have performed well, according to the report.

“Research suggests a range of beneficial effects from tea, especially green tea, from heart health to cancer-fighting and anti-aging properties and others,” the report notes. It adds that these benefits are being communicated to consumers in part through the emergence of tea rooms in America.

“Tea has always had a presence in the coffee house, but was rarely the focal point,” according to the report. Now, “tea rooms and tea shops are taking root around the country. These establishments express various dimensions of tea culture, and are catalysts to spur interest in premium tea and the craft and retail of tea.”

Fueling future growth

Going forward, manufacturers can take advantage of this interest in premium products by offering more products with added value and benefits, Packaged Facts suggests.

This “upscaling effect” already is evident in the iced tea and specialty tea segments, according to the report.

In the iced tea category this plays out with a focus on product purity, rare teas, distinctive flavor profiles and functional benefit. In specialty tea it is illustrated through a shift from black tea to more exotic tea, especially in hot beverages, the report notes.

Other innovative products that will continue to drive growth forward include an emergence of tea lattes and sparkling products, the report predicts.

Advertising shifts

New marketing strategies also will lay a key role in the ongoing development of the tea category in the US, according to Packaged Facts.

The role of television marketing going forward is unclear with some brands embracing it and others turning away from it.

Last fall, Lipton shifted gears to partner with the Food Network to target “food passionate millennials,” while Pure Leaf in 2015 made its first TV investment with the “Follow the Leaf” campaign, according to Packaged Facts.

More innovative approaches included Brisk asking Dan “Mache” Gamache of Mache Custom Kicks to create customized shoes to mark the launch of its Pineapple Passion fruit flavored product, the report notes.

These new approaches, combined with new products, should continue to engaged consumers in the tea category and fuel ongoing growth, the report summarizes. 

Related News

Fuze Tea: wild raspberry & hibiscus

Fuze Tea’s new Aussie campaign focuses on food moments

Pic: iStock/wmaster890

RTD tea: A ‘star performer’ with high growth trajectory predicted to continue

Omiberry is set to launch two RTD cold brew tea products and syrup in the US.

Omiberry to bring ‘five-flavor berry’ RTD tea to US market

More Americans are reaching for green tea, consumer survey reveals

More Americans are reaching for green tea, consumer survey reveals

Source: Tea Drops

Dissolvable Tea Drops brings more consumers to premium tea category by offering convenience

Tetley on the future of tea

The future of tea: From hangover cures to tea jellies, Tetley’s top five predictions

New flavors, delivery platforms keep consumers engaged with tea

New flavors, delivery platforms keep consumers engaged with tea

Related Products

See more related products

Comments (1)

harshul.vora@doehler.com - 13 Jan 2017 | 06:33

Head R&D

Tea syrups, Karak chai with milk and cardamon and malt drinks with tea extracts are of interest to consumer in our region.

13-Jan-2017 at 18:33 GMT

Submit a comment

Your comment has been saved

Post a comment

Please note that any information that you supply is protected by our Privacy and Cookie Policy. Access to all documents and request for further information are available to all users at no costs, In order to provide you with this free service, William Reed Business Media SAS does share your information with companies that have content on this site. When you access a document or request further information from this site, your information maybe shared with the owners of that document or information.