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Tea and RTD Teas - US - May 2010

SCOPE AND THEMES
What you need to know
Definition
Data sources
Sales data
Consumer survey data
Advertising creative
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
Tea market reached $3.9 billion in 2009
RTD tea leads growth
Supermarkets command the biggest share in the tea market
RTD kombucha becoming a power house in Natural channel
Product innovation is a must to compete successfully
Brand qualities that define growth avenues
The tea and RTD tea consumer
Personal consumption
Household usage
Reasons for drinking different types of teas
Attitudes towards various tea flavors
What tea drinkers add to tea
Attitudes toward health benefits of tea, and organic and fair-trade certified tea
INSIGHTS AND OPPORTUNITIES
RTD tea can take flavors inspiration from regions in the U.S.
Super-premium teas with a flowery twist
Tea-based smoothies for dessert
Instant Matcha tea a versatile ingredient
Premium bulk tea
Sparkling and carbonated tea: Can they replace soda?
INSPIRE TRENDS
Trend 1: Fair-trade revolution set to continue
What we’ve seen?
Implications for the tea industry
Trend 2: Tea and beauty
What we’ve seen?
Implications for the tea industry
MARKET SIZE AND FORECAST
Key points
Bagged/loose tea sales pick up—will it last?
Wellness trend and product innovation driving growth
Sales and forecast of market
Figure 1: FDMx and convenience store sales and forecast of tea and RTD tea, at current prices, 2004-14
Figure 2: FDMx and convenience store sales and forecast of tea and RTD tea, at inflation-adjusted prices, 2004-14
Walmart sales
COMPETITIVE CONTEXT
Key points
Competition within the tea market
Growing battle for shelf space—dairy producers and fruit juice manufacturers enter tea space
External competition from other non-alcoholic beverages heats up
Figure 3: Number of new U.S. tea and RTD (iced) tea introductions using “antioxidant” claims, 2005-09
Juice and enhanced water
Energy drinks
SEGMENT PERFORMANCE
Key points
Pricing increases lead to market gains
Figure 4: Mombasa auction tea prices, 2002-09
Figure 5: FDMx tea and RTD tea cost per unit, 2007 and 2009
FDMx sales and forecast of tea and RTD tea, by segment
Figure 6: FDMx sales and forecast tea and RTD tea, at current prices, by segment, 2004-14
Figure 7: FDMx sales of tea and RTD tea, by segment, 2007 and 2009
SEGMENT PERFORMANCE—RTD SHELF-STABLE CANNED/ BOTTLED TEA
Key points
The recession negatively influences RTD tea
Single-serve tea gives way to RTD multipacks and gallon jugs
Sales and forecast of RTD shelf-stable canned/bottled tea
Figure 8: FDMx sales and forecast of RTD shelf-stable canned/bottled tea, 2004-14
SEGMENT PERFORMANCE— BAGGED/LOOSE TEA
Key points
Higher pricing bolsters market expansion
Bagged tea wins price-sensitive RTD customers
Sales and forecast of bagged/loose tea
Figure 9: FDMx sales and forecast of bagged/loose tea, 2004-14
SEGMENT PERFORMANCE—RTD REFRIGERATED TEA
Key points
Distribution is key to growth
Sales and forecast of RTD refrigerated tea
Figure 10: FDMx sales and forecast of RTD refrigerated tea, 2004-14
SEGMENT PERFORMANCE—INSTANT TEA MIXES
Key points
Lack of innovation leads to declining market penetration
Figure 11: U.S. Number of new instant tea introductions 2005-10
Sales and forecast of instant tea mixes
Figure 12: FDMx sales and forecast of instant tea mixes, 2004-14
RETAIL CHANNELS
Key points
Grocery channel losing its edge
Convenience stores showcase new products
Sales of tea and RTD tea, by channel
Figure 13: FDMx and c-store sales of tea and RTD tea, by retail channel, 2007 and 2009
RETAIL CHANNELS—SUPERMARKETS
Key points
Competition for tea away from home poses the greatest challenge
Figure 14: U.S. sales of tea and RTD tea at supermarkets, 2004-09
RETAIL CHANNELS—DRUG AND OTHER
Key points
Impulse purchases and value priced multipacks can increase volume
Figure 15: U.S. sales of tea and RTD tea at drug and other FDMx channels, 2004-09
RETAIL CHANNELS—CONVENIENCE STORES
Key points
Convenience stores finding success in RTD canned/bottle tea sales
Figure 16: U.S. sales of tea and RTD tea at convenience stores, 2004-09
RETAIL CHANNELS—NATURAL CHANNELS
Premium product sales shift to FDM outlets
Marketing basics could boost dried tea sales
Figure 17: Natural supermarket sales of tea and RTD teas, at current prices, March 2008- March 2010
Figure 18: Natural supermarket sales of tea and RTD teas, at inflation-adjusted prices, 2008- 2010
Natural channel sales by segment
Figure 19: Natural supermarket sales of tea and RTD teas, by segment, 2008 and 2010
Brand table: Tea & RTD teas
Figure 20: Manufacturer brand natural supermarket sales of dried and loose tea, 2008 and 2010
Natural channel sales of tea & RTD teas by organic
Figure 21: Natural supermarket sales of dried and loose tea, by organic vs. non-organic, 2008 and 2010
MARKET DRIVERS
Key points
Adult obesity levels in the U.S. stabilize but still remain a cause of concern
Figure 22: Age-adjusted prevalence of being overweight, obese, or extremely obese, among adults aged 20 or older, 1988-2008
Adults watching their diet seek low-fat, low-sugar food products
Figure 23: Reasons for watching/controlling diet, 2006 and 2009
Figure 24: Attributes diet watchers look for in food, 2006 and 2009
Government concerns for obesity-related issues elicits reaction from non-alcoholic beverage manufactures
Sweeteners are a problem in RTD teas
Figure 25: Number of new RTD tea products made with juice, 2006, 2008 and 2010
Teen population to remain flat; tea makers need to work on frequency of consumption
Figure 26: U.S. Teen population, 2004-14
Black and Asian population projections offer growth potential
Figure 27: U.S. Population, by race and Hispanic origin, 2004-14
Recession negatively influences household spending on teas
COMPANIES AND BRANDS
Key points
Unilever sales stalled due to lack of innovation
Bigelow—Provides variety at value prices
Private labels thrive in a down economy
Company sales
Figure 28: FDMx tea and RTD tea sales of leading companies, 2009 and 2010
BRAND SHARE— RTD CANNED/BOTTLED TEA
Key points
Better for you makes winning combination for Lipton and Honest Tea
Premium teas winning sales despite economy
Manufacturer and brand shares
Figure 29: FDMx brand sales of RTD canned/bottled tea in the U.S., 2009 and 2010
BRAND SHARE—BAGGED/LOOSE TEA
Key points
A plethora of premium wins favor
New products key to continued growth
Figure 30: Number of new regular tea products, by top ten brands, 2006 and 2009
Manufacturer and brand shares
Figure 31: FDMx brand sales of bagged/loose tea in the U.S., part 1, 2009 and 2010
Figure 32: FDMx brand sales of bagged/loose tea in the U.S., part 2, 2009 and 2010
BRAND SHARE—RTD REFRIGERATED TEA
Key points
Dairy industry key to growth
Fruit and tea a winning combination
Manufacturer and brand shares
Figure 33: FDMx brand sales of RTD refrigerated tea in the U.S., 2008 and 2009
BRAND SHARE—INSTANT TEA MIXES
Key points
On-the-go packs on their way out…
… Matcha is on the way in
Source: Mintel GNPD
Manufacturer and brand shares
Figure 34: FDMx brand sales of instant tea mixes in the U.S., 2009 and 2010
BRAND QUALITIES
Lipton: Global tea giant with opportunity to build character
Using international insight to build character
Traditional Medicinals: American leader in using tea as medicine
INNOVATION AND INNOVATORS
Figure 35: Number of new regular tea* and RTD (iced) tea product introductions in the U.S. 2005-10**
Purity claims
Premium
Ethical—environmentally friendly packaging
Figure 36: Top ten claims in new tea products in the U.S., 2006-09
Innovations by segment
RTD tea
Figure 37: Claims in RTD tea New product launches, 2005, 2007 and 2009
Regular tea
Figure 38: Claims in regular tea new product launches, 2005, 2007 and 2009
ADVERTISING AND PROMOTION
Overview
Capitalizing on a healthy image
Diet Snapple
Figure 39: Diet Snapple, TV ad made from the best diet stuff on earth, 2010
Figure 40: Diet Snapple, TV ad, tour of a Snapple manufacturing plant, 2010
Traditional Medicinals Tea
Figure 41: Traditional Medicinals Tea, TV ad, 2009
Ads tout the most sought after attribute in tea—refreshment
Luzianne sipping tea on a lazy summer afternoon
Figure 42: Luzianne, TV ad, relaxing on a porch swing, 2009
Lipton Sparkling Green Tea
Figure 43: Lipton Sparkling Green Tea, TV ad, 2009
Oregon Chai Tea Lattes
Figure 44: Oregon Chai Tea Lattes, TV ad, 2009
THE CONSUMER: TEA USAGE, TYPE, BRANDS AND FREQUENCY
Key points
Trends in personal usage of RTD iced tea and household usage of regular tea and instant iced tea mixes
Figure 45: Incidence of individual consumption of RTD iced tea and incidence of household consumption of instant iced tea mixes and bag/package tea, 2005-09
RTD iced tea
Figure 46: Incidence of individual consumption of RTD iced tea, 2005-09
Personal consumption of RTD iced tea by type
Figure 47: RTD iced tea usage, regular vs. diet, by key demographics, April 2008-June 2009
Figure 48: Personal consumption of iced tea by choice of brands, by age, April 2008-June 2009
THE CONSUMER: HOUSEHOLD TEA CONSUMPTION
Key points
Household consumption of regular (bag/loose) tea and instant tea mixes
Figure 49: Incidence of household consumption of regular tea and instant iced tea mixes, April 2008-June 2009
Types and flavors of regular tea and instant iced tea mix
Regular tea in bags/packages
Figure 50: Household usage of regular tea by types of brewing, by region, April 2008-June 2009
Household usage of regular tea by flavor
Figure 51: Household usage of regular tea by types of flavors, by region, April 2008-June 2009
Household usage of regular tea (in bags/packages) by brand
Figure 52: Household usage of regular tea brands, by household income, April 2008-June 2009
Instant iced tea mixes usage by type
Figure 53: Household usage of instant iced tea mixes by type, by age of householder, April 2008-June 2009
Household usage of instant iced tea mixes by brand
Figure 54: Household usage of instant iced tea mix brands, by age of householder, April 2008-June 2009
Types of tea, by frequency of use
Figure 55: Types of tea, by frequency of use, February 2010
Weekly frequency of drinking different types of tea
Figure 56: Frequency of drinking different types of tea in week, February 2010
Frequency of drinking freshly brewed teas (iced and hot) higher among adults aged 45+
Figure 57: Frequency of drinking freshly brewed iced and hot tea, by age, February 2009
REASONS FOR DRINKING DIFFERENT TYPES OF TEAS
Taste and refreshment dominate
Figure 58: Reasons for drinking different types of tea, February 2010
Bottled iced tea: women look for taste and refreshment while men want antioxidants and boost
Figure 59: Reasons for drinking bottled iced tea, by gender, February 2010
ATTITUDES TOWARD VARIOUS TEA FLAVORS
Green tea is the most popular type of tea
Figure 60: Attitudes toward various tea flavors, February 2010
Women have bigger flavor repertoire
Figure 61: Preference for various tea flavors, by gender, February 2010
CONSUMER ATTITUDES AND BEHAVIOR
What tea drinkers add to tea
Figure 62: Choice of additives in iced/hot tea, February 2010
Preference for tea additives in freshly brewed iced tea
Figure 63: Choice of additives in iced tea, by age, February 2010
Attitudes toward health benefits of tea, and organic and fair trade certified tea
Figure 64: Attitudes toward health benefits and organic and fair-trade certified tea, by age, February 2010
Influence of backlash against plastic bottles and recession
Figure 65: Influence of plastic bottles/packaging and recession on tea purchase behavior, by household income, February 2010
Attitude toward tea sweeteners and new tea products
Figure 66: Attitudes toward tea sweeteners and new tea products, by gender, February 2010
Occasions for drinking tea
Figure 67: Occasions for drinking tea, by type of tea consumed, February 2010
Tea flavor choice by occasion of consumption
Figure 68: Tea flavor choice, by occasion of consumption, February 2009
IMPACT OF RACE AND HISPANIC ORIGIN
RTD iced tea consumption
Figure 69: Incidence of individual consumption of RTD iced tea, by race/Hispanic origin, 2005-09
Personal consumption of RTD iced tea by type
Figure 70: RTD iced tea usage, regular vs. diet, by race/Hispanic origin, April 2008-June 2009
Household consumption of regular tea and instant tea mixes
Figure 71: Incidence of household consumption of regular tea and instant iced tea mixes, by race/Hispanic origin, April 2008-June 2009
Regular tea in bags/packages
Figure 72: Types of regular tea used in households, by race/Hispanic origin, April 2008-June 2009
Figure 73: Household usage of regular tea by type of brewing, by race/Hispanic origin, April 2008-June 2009
Household usage of regular tea by flavor
Figure 74: Household usage of regular tea by types of flavors, by race/Hispanic origin, April 2008-June 2009
Household usage of regular tea (in bags/packages) by brand
Figure 75: Household usage of regular tea by choice of brands, by race/Hispanic origin, April 2008-June 2009
Instant iced tea mixes usage by type
Figure 76: Household usage of instant iced tea mixes by type, by race/Hispanic origin, April 2008-June 2009
Household usage of instant iced tea mixes by brand
Figure 77: Household usage of instant iced tea mixes by choice of brands, by race/Hispanic origin, April 2008-June 2009
Attitudes towards health benefits of, and organic and fair-trade certified tea
Figure 78: Attitudes towards health benefits and organic and fair-trade certified tea, by race/Hispanic origin, February 2010
Attitudes towards tea sweeteners and new tea products
Figure 79: Attitudes towards tea sweeteners and new tea products, by race/Hispanic origin, February 2010
THE TEEN CONSUMER
Teen use of RTD iced tea
Figure 80: Incidence of individual consumption of RTD iced tea among teens, May 2004-June 2009
Figure 81: Incidence of drinking RTD iced tea among teens, by age and gender, April 2008-June 2009
Figure 82: Teen use of RTD iced tea, by regular/diet, by age and gender, April 2007-June 2008
Figure 83: Teen consumption of iced tea by choice of brands, by age and gender, April 2008-June 2009
CLUSTER ANALYSIS
Flavorers
Demographics
Opportunity
Mainstreams
Demographics
Characteristics
Opportunity
Alternatives
Demographics
Characteristics
Opportunity
Cluster characteristics
Figure 84: Tea clusters, February 2010
Figure 85: Attitudes towards various tea flavors, by tea clusters, February 2010
Figure 86: Attitudes towards health benefits and organic and fair-trade certified tea, by tea clusters, February 2010
Figure 87: Attitudes towards tea sweeteners and new tea products, by tea clusters, February 2010
Figure 88: Influence of plastic bottles and recession on tea purchase behavior, by tea clusters, February 2010
Cluster demographics
Figure 89: Tea clusters, by gender, February 2010
Figure 90: Tea clusters, by age group, February 2010
Figure 91: Tea clusters, by household income group, February 2010
Figure 92: Tea clusters, by race, February 2010
Figure 93: Tea clusters, by Hispanic origin, February 2010
Cluster methodology
CUSTOM CONSUMER GROUPS
Black women aged 35-54 are the key RTD tea consumer
Figure 94: Incidence of individual consumption of RTD iced tea, by black demographic gender and age, April 2008-June 2009
RTD tea brand choice varies widely among different age groups in blacks
Figure 95: Personal usage of RTD iced tea by choice of brands, by black demographics by age and gender, April 2008-June 2009
IRI/BUILDERS PANEL DATA: KEY HOUSEHOLD PURCHASE MEASURES
 CANNED AND BOTTLED TEA: KEY HOUSEHOLD PURCHASE MEASURES
Overview
Canned and bottle tea: Consumer insights on key purchase measures
Brand map
Figure 96: Brand map, selected brands of canned and bottled tea, buying rate, by household penetration, 2009*
Brand leader characteristics
Key purchase measures
Figure 97: Key purchase measures for the top brands of canned and bottled tea, by household penetration, 2009*
 BAG/LOOSE TEA: KEY HOUSEHOLD PURCHASE MEASURES
Bag/loose tea—consumer insights on key purchase measures
Brand map
Figure 98: Brand map, selected brands of tea bags/loose tea, buying rate, by household penetration, 2009*
Brand leader characteristics
Key purchase measures
Figure 99: Key purchase measures for the top brands of tea bags/loose tea, by household penetration, 2009*
 INSTANT TEA MIXES: KEY HOUSEHOLD PURCHASE MEASURES
Instant tea mixes
Instant tea mixes—consumer insights on key purchase measures
Brand map
Figure 100: Brand map, selected brands of instant tea mixes, buying rate, by household penetration, 2009*
Brand leader characteristics
Key purchase measures
Figure 101: Key purchase measures for the top brands of instant tea mixes, by household penetration, 2009*
APPENDIX: IRI/BUILDERS PANEL DATA DEFINITIONS
APPENDIX: OTHER USEFUL CONSUMER TABLES
Attitudes and purchase influencers
Figure 102: Influence of plastic bottles and recession on tea purchase behavior, by household income, February 2010
Figure 103: Attitudes toward tea sweeteners and new tea products, by gender, February 2010
Figure 104: Attitudes toward tea sweeteners and new tea products, by household income, February 2010
Brand usage of RTD Iced tea
Figure 105: Personal consumption of iced tea by brands, by gender, April 2008-June 2009
Figure 106: Personal consumption of iced tea by brands, by age, April 2008-June 2009
Figure 107: Personal consumption of iced tea by brands, by region, April 2008-June 2009
Brand usage of RTD iced tea
Figure 108: Personal consumption of iced tea by brands, by household income, April 2008-June 2009
Types and flavors of regular tea and instant iced tea mix
Regular tea in bags/packages
Figure 109: Types of regular tea used in households, by household income, April 2008-June 2009
Instant iced tea mixes usage by type
Figure 110: Household usage of instant iced tea mixes by type, by age of householder, April 2008-June 2009
Household usage of instant iced tea mixes by brand
Figure 111: Household usage of instant iced tea mixes by brand, by age of householder, April 2008-June 2009
Household usage of regular tea by flavor
Figure 112: Household usage of regular tea by types of flavors, by region, April 2008-June 2009
What tea drinkers add to tea
Figure 113: Choice of additives in iced tea, by race/Hispanic origin, February 2010
Figure 114: Choice of additives in iced tea, by region, February 2010
Blacks are most active in seeking favorite tea types and flavors
Figure 115: Preference for top tea types and favorite flavors, by race/Hispanic origin, February 2010
Preference for tea additives in freshly brewed hot tea
Figure 116: Choice of additives in freshly brewed hot tea, by age, February 2010
Figure 117: Choice of additives in freshly brewed hot tea, by race/Hispanic origin, February 2010
 INFLUENCE OF BACKLASH AGAINST PLASTIC BOTTLES AND RECESSION ON TEA-PURCHASE BEHAVIOR
Figure 118: Influence of plastic bottles and recession on tea purchase behavior, by age, February 2010
APPENDIX: TRADE ASSOCIATIONS

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