Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Abbreviations and terms
- Abbreviations
Executive Summary
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- Tea market reached $4.3 billion in 2008
- RTD teas have driven growth, but stumbled in 2008
- Unilever/PepsiCo lead the tea market, but private label is gaining share
- Widespread availability is driving growth
- Organic, natural and “superfruit” flavors dominate new tea products
- Tea consumption trends
- Taste is the biggest attribute to motivate tea purchase
Insights and Opportunities
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- In a tough economy, tea suppliers should emphasize value
- Tea needs to “own” antioxidants
- Instant tea mixes have room to improve on health, value perceptions
- Manufacturers need to take stock of the amount of sugar in RTD tea
Inspire Insights
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- Death of the Middle Ground
- What’s it about?
- What we have seen
- Implications
- Activate your drink
- What we have seen
- Implications
Market Size and Forecast
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- Key points
- Healthy eating trend and product innovation driving growth
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- Figure 1: Total U.S. sales* and forecast of regular and RTD tea, at current prices, 2003-13
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- Figure 2: Total U.S. sales* and forecast of regular and RTD tea, at inflation-adjusted prices, 2003-13
- Walmart sales
Competitive Context
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- Key points
- Tea competes with a wide range of beverages
- Tea no longer “owns” antioxidants
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- Figure 3: Trends in number of new products in non-alcoholic beverages with antioxidant claim, by segment, 2003-08
- Tea prices are rising
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- Figure 4: Producer Price Index* for tea, 2003-08
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- Figure 5: Average retail price for bagged/loose and RTD tea in FDMx, 2003-08
- Pepsi and Unilever expand joint venture to include Tazo
Segment Performance
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- Key points
- Healthy eating trend drives growth of RTD and bagged tea
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- Figure 6: FDMx sales and forecast of tea and RTD tea, at current prices, by segment, 2003-13
- Figure 7: FDMx sales of regular and RTD tea, segmented by type, 2006 and 2008
Segment Performance—RTD Shelf-Stable Canned/Bottled Tea
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- Key points
- Healthy eating trend good for RTD tea
- More varieties—and more shelf space—translate to more sales
- Premium and organic teas are to drive small growth
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- Figure 8: FDMx sales and forecast of RTD SS canned/bottled tea, 2003-13
Segment Performance—Bagged/Loose Tea
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- Key points
- Strong health perceptions continue to drive sales
- Value trumps convenience in 2008
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- Figure 9: FDMx sales and forecast of bagged/loose tea, 2003-13
Segment Performance—Instant Tea Mixes
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- Key points
- Lacking selection and “not quite as good-for-you” perceptions stunt growth
- Instant tea mixes missed an opportunity in economic recession
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- Figure 10: FDMx sales and forecast of instant tea mixes, 2003-13
Segment Performance—RTD Refrigerated Tea
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- Key points
- Healthy eating trend, advertising campaign boost sales
- Poor economy hurts sales in 2008
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- Figure 11: FDMx sales and forecast of RTD refrigerated tea, 2003-13
Retail Channels—Overview
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- Key points
- Availability of tea has expanded
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- Figure 12: Total U.S. sales* and forecast of regular and RTD tea, by retail channel, 2006 and 2008
Retail Channels—Supermarkets
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- Key points
- Expanded selection and store brand products help drive sales
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- Figure 13: U.S. sales of tea at supermarkets, 2003-08
Retail Channels—Convenience Stores
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- Key points
- Increased tea consumption among teens fuels sales
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- Figure 14: U.S. sales of tea at convenience stores, 2003-08
Retail Channels—Drug and Other
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- Key points
- Mass merchandisers benefit from ailing economy
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- Figure 15: U.S. sales of tea at drug stores and other, 2003-08
Retail Channels—Natural Channel
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- Sales of tea and RTD tea in the natural channel
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- Figure 16: Natural product supermarket retail sales of tea and RTD tea, at current prices, 2007-09
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- Figure 17: Natural product supermarket retail sales of tea and RTD tea, at inflation-adjusted prices, 2007-09*
- Natural channel sales by segment
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- Figure 18: Natural product supermarket retail sales of tea and RTD tea, by segment, 2007 and 2009
- Brand performance
- Kombucha Tea Continues to Skyrocket and Dominate
- Manufacturer and brand sales
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- Figure 19: Manufacturer brand natural supermarket sales of tea and RTD tea*, 2007 and 2009
- Natural channel sales of Tea and RTD Tea by organic
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- Figure 20: Natural product supermarket retail sales of tea and RTD tea, by organic, 2007 and 2009
- Natural channel sales of organic tea and organic RTD tea by segment
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- Figure 21: Natural product supermarket retail sales* of organic tea and organic RTD tea, by segment, 2007 and 2009
Market Drivers
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- Health and wellness trend is good for the tea market
- Studies continue to prove tea’s health benefits
- But not all news is good news
- Baby Boomers drove category growth during 2004-08
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- Figure 22: U.S. population of adults aged 18 and over, by age group, 2003-13
- Figure 23: Usage of various types of tea, by age, February 2009
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- Figure 24: Frequency of drinking freshly brewed iced and hot tea, by age, February 2009
- Economic recession hurt RTD tea sales in 2008
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- Figure 25: Spending at restaurants compared to last year, by age, February 2009
- Blacks and Asians are key user groups
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- Figure 26: Usage of various types of tea, by race/Hispanic origin, February 2009
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- Figure 27: Population, by race and Hispanic origin, 2003-13
Leading Companies
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- Key points
- Unilever/PepsiCo
- Ferolito, Vultaggio & Sons
- Snapple Beverage Group
- Nestlé and Coca-Cola
- Kraft Foods
- Private label
- Manufacturer sales
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- Figure 28: FDMx sales of leading tea and RTD tea companies, 2008 and 2009
Brand Share—RTD Canned/Bottled Tea
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- Key points
- Lipton maintains strong lead thanks to better-for-you offerings
- Tazo poised for growth
- AriZona and private label are shining stars in 2008
- Manufacturer and brand sales
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- Figure 29: FDMx brand sales of RTD canned and bottled tea in the U.S., 2008 and 2009
Brand Share—Bagged/loose Tea
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- Key points
- Lipton leads the segment but is losing market share to smaller players
- Private label drives segment growth in 2008
- Manufacturer and brand sales
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- Figure 30: FDMx brand sales of bagged/loose tea in the U.S., 2008 and 2009
Brand Share—Instant Tea Mixes
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- Key points
- Shares of top two brands—Lipton and Crystal Light—slip in 2008
- Private label gains one full share point
- Manufacturer and brand sales
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- Figure 31: FDMx brand sales of instant tea mixes in the U.S., 2008 and 2009
Brand Share—RTD Refrigerated Tea
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- Key points
- Top three brands post big gains to grow the segment
- Premium brands struggle amidst troubled economy
- Manufacturer and brand sales
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- Figure 32: FDMx brand sales of RTD refrigerated tea in the U.S., 2008 and 2009
Brand Qualities
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- AriZona Ice Tea—not just a pretty face
- Honest Tea—tea with a conscience
Innovation and Innovators
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- Key points
- Pace of RTD tea innovation picks up in 2008
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- Figure 33: Number of new tea introductions in the U.S, 2003-08
- Top 15 claims in new tea products, 2005 and 2008
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- Figure 34: Top 15 claims in new tea products, 2005 and 2008
- Organic growth
- Country matters
- Giving back
- Going superfruity
- Tea for tots
Advertising and Promotion
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- Overview
- Television advertising
- Nestea
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- Figure 35: Nestea Lemon television ad, 2008
- Lipton
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- Figure 36: Lipton Green Tea television ad, 2008
- Turkey Hill
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- Figure 37: Turkey Hill Iced Tea television ad, 2008
- Luzianne
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- Figure 38: Luzianne television ad, 2008
- Snapple
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- Figure 39: Snapple White Tea television ad, 2008
- Print advertising
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- Figure 40: Oregon Chai print ad, 2000
The Consumer: Tea Usage, Type, Brands & Frequency
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- Trended usage of tea—all types
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- Figure 41: Incidence of individual consumption of RTD iced tea and incidence of household consumption of instant iced tea mixes and bagged tea, 2004-08
- Usage of tea by type
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- Figure 42: Personal usage of various types of tea, by age, February 2009
- Usage frequency by type
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- Figure 43: Personal usage frequency, by type of tea, February 2009
- Drinking occasion by type
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- Figure 44: Occasions for drinking tea, by type of tea consumed, February 2009
- RTD iced tea
- RTD iced tea—usage by demographics
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- Figure 45: Incidence of personal consumption of RTD iced tea, by gender, age, race/Hispanic origin and region, 2006 and 2008
- RTD iced tea—usage of diet vs. regular
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- Figure 46: Types of RTD iced tea drunk, regular vs. diet, by gender, age, race/Hispanic origin and region, July 2007-September 2008
- RTD iced tea—brand usage of by age
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- Figure 47: Personal consumption of RTD iced tea, by brand, by age, July 2007-September 2008
- RTD iced tea—brand usage by race/Hispanic origin
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- Figure 48: Personal consumption of RTD iced tea, by brands, by race/Hispanic origin, July 2007-September 2008
- RTD iced tea—trended usage among teens
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- Figure 49: Incidence of drinking RTD iced tea among teens, 2004-08
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- Figure 50: Incidence of drinking RTD iced tea among teens, by age and gender, April 2007-June 2008
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- Figure 51: Incidence of drinking RTD iced tea among teens, by regular/diet, by age and gender, April 2007-June 2008
- RTD iced tea—brand usage among teens
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- Figure 52: Incidence of drinking RTD iced tea among teens, by brand, by age and gender, April 2007-June 2008
- Bagged and instant iced tea
- Bagged and instant iced tea—usage by demographics
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- Figure 53: Incidence of household consumption of bagged tea and instant iced tea mixes of RTD iced tea, by gender, age, race/Hispanic origin and region, July 2007-September 2008
- Bagged tea—usage of types & flavors
- Bagged tea—regular vs. decaf
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- Figure 54: Types of bagged tea used in households, by race/Hispanic origin, July 2007-September 2008
- Bagged tea—hot vs. cold
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- Figure 55: Household usage of bagged tea, by type of brewing, by race/Hispanic origin, July 2007-September 2008
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- Figure 56: Household usage of bagged tea, by type of brewing, by region, July 2007-September 2008
- Bagged tea—popular flavors
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- Figure 57: Household usage of bagged tea, by types/flavors, by region, July 2007-September 2008
- Bagged tea—brand usage by race/Hispanic origin
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- Figure 58: Household usage of bagged tea, by brand, by race/Hispanic, July 2007-September 2008
- Instant iced tea mixes—usage by type
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- Figure 59: Household usage of instant iced tea mixes, by type, by race/Hispanic origin, July 2007-September 2008
- Instant iced tea mixes—brand usage by race/Hispanic origin
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- Figure 60: Household usage of instant iced tea mixes, by brand, by race/Hispanic origin, July 2007-September 2008
The Consumer—Attitudes and Motivations
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- Key points
- Reasons for drinking tea
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- Figure 61: Reasons for drinking different types of tea, February 2009
- Favorite tea flavors
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- Figure 62: Attitude toward various tea flavors, February 2009
- What tea drinkers add to tea
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- Figure 63: Choice of additives in tea, February 2009
- Perceptions of health benefits, organic tea and fair trade tea
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- Figure 64: Attitude toward health benefits, and organic and fair trade-certified tea, by age, February 2009
- Impact of the recession and environmental concerns
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- Figure 65: Influence of sustainability awareness and recession on tea purchase behavior, by age, February 2009
Cluster Analysis
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- Humani-teas
- Who they are
- Opportunity
- Hot-teas
- Who they are
- Opportunity
- Simplici-teas
- Who they are
- Opportunity
- Cluster characteristics
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- Figure 66: Tea consumer clusters, February 2009
- Figure 67: Personal usage frequency, by type of tea, by tea consumer clusters, February 2009
- Figure 68: Attitude toward various tea flavors*, by tea consumer clusters, February 2009
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- Figure 69: Attitude toward various tea flavors*, by tea consumer clusters, February 2009
- Figure 70: Attitude toward health benefits, and organic and fair trade-certified tea, by tea consumer clusters, February 2009
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- Figure 71: Influence of sustainability awareness and recession on tea purchase behavior, by tea consumer clusters, February 2009
- Figure 72: Servings per week, by tea consumer clusters, February 2009
- Cluster demographics
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- Figure 73: Tea clusters, by gender, February 2009
- Figure 74: Tea consumer clusters, by age, February 2009
- Figure 75: Tea consumer clusters, by household income, February 2009
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- Figure 76: Tea consumer clusters, by race, February 2009
- Figure 77: Tea consumer clusters, by Hispanic origin, February 2009
- Cluster methodology
Custom Consumer Groups
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- Students, working women, and teen-dominated families are prime consumers for RTD iced tea
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- Figure 78: Personal consumption of RTD iced tea, by key user cohorts, July 2007-September 2008
IRI/Builders Panel Data: Key Household Purchase Measures
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- Canned and bottled tea
- Consumer insights on key purchase measures
- Brand map
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- Figure 79: Brand map, selected brands of canned and bottled tea, buying rate by household penetration, 2008*
- Brand leader characteristics
- Key purchase measures
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- Figure 80: Key purchase measures for the top brands of canned and bottled tea, by household penetration, 2008*
- Teabags/loose
- Consumer insights on key purchase measures
- Brand map
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- Figure 81: Brand map, selected brands of teabags/loose, buying rate by household penetration, 2008*
- Brand leader characteristics
- Key purchase measures
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- Figure 82: Key purchase measures for the top brands of teabags/loose, by household penetration, 2008*
- Instant tea mixes
- Consumer insights on key purchase measures
- Brand map
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- Figure 83: Brand map, selected brands of instant tea mixes, buying rate by household penetration, 2008*
- Brand leader characteristics
- Key purchase measures
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- Figure 84: Key purchase measures for the top brands of instant tea mixes, by household penetration, 2008*
Appendix: Other Useful Consumer Tables
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- Brand usage of RTD Iced tea by gender
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- Figure 85: Personal consumption of RTD iced tea, by brand, by gender, July 2007-September 2008
- Brand usage of RTD Iced tea by region
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- Figure 86: Personal consumption of RTD iced tea, by brand, by region, July 2007-September 2008
- Tea flavors used by race/Hispanic origin
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- Figure 87: Household usage of bagged tea, by types/flavors, by race/Hispanic origin, July 2007-September 2008
- Perceptions of health benefits, organic tea and fair trade tea by race/Hispanic origin
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- Figure 88: Attitude toward health benefits of and organic and fair trade-certified tea, by race/Hispanic origin, February 2009
- Impact of the recession and environmental concerns on tea by race/Hispanic origin and household income
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- Figure 89: Influence of sustainability awareness and recession on tea purchase behavior, by race/Hispanic origin, February 2009
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- Figure 90: Influence of sustainability awareness and recession on tea purchase behavior, by HH income, February 2009
- Preference for tea additives in freshly brewed iced tea by age, race/Hispanic origin, and region
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- Figure 91: Choice of additives in iced tea, by age, February 2009
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- Figure 92: Choice of additives in iced tea, by race/Hispanic origin, February 2009
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- Figure 93: Choice of additives in iced tea, by region, February 2009
- Preference for tea additives in freshly brewed hot tea by age and race/Hispanic origin
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- Figure 94: Choice of additives in freshly brewed hot tea, by age, February 2009
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- Figure 95: Choice of additives in freshly brewed hot tea, by race/Hispanic origin, February 2009
- Reasons for drinking bottled tea by gender
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- Figure 96: Reasons for drinking bottled iced tea, by gender, February 2009
- Women have bigger flavor repertoire
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- Figure 97: Attitude toward various tea flavors that respondents like and sometimes drink, by gender, February 2009
- Usage frequency of freshly brewed teas by age
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- Figure 98: Frequency of drinking freshly brewed iced and hot tea, by age, February 2009
Appendix: Trade Associations
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