Tea and RTD Teas - US - July 2012

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
The market
Figure 1: Total U.S. retail sales and forecast of tea and RTD tea products, at current prices, 2007-17
Ready-to-drink canned/bottled tea remain the largest segment
Figure 2: Tea and RTD tea market share, by segment, 2012 (est.)
Forecast
Figure 3: FDMx sales and fan chart forecast of tea and RTD tea, at current prices, 2007-17
Market factors
Unemployment rate among the key demographic groups remains high
Figure 4: Unemployment status (seasonally adjusted) among civilian non-institutional population, by age, gender, and race/Hispanic origin, May 2011-May 2012
Asians, blacks, and Hispanics offer growth opportunities through favorable population projections
Figure 5: Rate of change in the U.S. population, by blacks/Asians/Hispanic origin, 2007-17
Companies, brands, and innovation
Ferolito, Vultaggio & Sons tops FDMx market with AriZona RTD tea
Figure 6: FDMx manufacturers sales of tea and RTD Tea, 2012*
Private labels discontinue the growth streak in most segments during 2011-12
Figure 7: Percent change in FDMx private label dollar sales, by segments, 2008-12
Innovation pace strong in 2011
Figure 8: Number of new regular tea* and RTD (iced) tea product introductions in the U.S. 2007-11
The consumer
Ready-to-drink tea consumer base grows through population increases
Figure 9: Incidence of individual consumption of RTD iced tea and incidence of household consumption of instant iced tea mixes and bagged/packaged tea, January 2007-November 2011
Teen consumer base for RTD tea declines in 2011
Figure 10: Personal consumption of iced tea among teens, January 2007-November 2011
Bags/loose tea more popular than RTD tea
Figure 11: Tea purchase by packaging format and type, March 2012
Home is the top location to consume tea
Figure 12: Incidence of drinking tea by location, March 2012
Choice of tea type, flavors, and brand name top factors in buying RTD tea
Figure 13: Degree of influence of various factors in RTD tea purchase decision, March 2012
Loose leaf tea presents opportunities, manufacturers need to overcome a few hurdles
Figure 14: Attitudes toward bagged/loose tea, March 2012
What we think
ISSUES IN THE MARKET
Can the tea and RTD tea market grow its consumer base?
Have the manufacturers engaged in innovation?
Do private labels influence the market growth curve?
Do pro-health attributes in RTD tea influence consumer purchase decision?
INSIGHTS AND OPPORTUNITY
Differentiate RTD tea from other tea-based non-alcoholic beverages
In-store demonstrations and trial can benefit loose tea
INSPIRE INSIGHTS
Trend: Guiding Choices
Trend: Transumers
MARKET SIZE AND FORECAST
Key points
Growth slows in 2011 and estimated 2012
Health concerns may limit potential for larger growth
Demographic population growth should help boost sales
Tea and RTD tea products market size and forecast
Figure 15: Total U.S. retail sales and forecast of tea and RTD tea products, at current prices, 2007-17
Figure 16: Total U.S. retail sales and forecast of tea and RTD tea products, at inflation-adjusted prices, 2007-17
Fan chart forecast
Figure 17: Total U.S. sales and fan chart forecast of tea and RTD tea, at current prices, 2007-17
Walmart sales
MARKET DRIVERS
Key points
Health and wellness trends and their impact on the market
Adult obesity rates increase in 2009-10
Figure 18: Percentage of population aged 20+ who are overweight, obese, or extremely obese, 1988-2010
Teen obesity rates
Figure 19: Prevalence of obesity among children and adolescents aged 2-19, 1976-2010
More than half of adults watch their diets; close to four in 10 look for sugar-free foods
Figure 20: Trends in diet control among adults aged 18+, 2005-11
Demographic and economic factors
Teen population growth between 2012 and 2017 should help spur further sales
Figure 21: Teen population, by age, 2007-17
Blacks, Hispanics, and Asians drink RTD tea more than whites do
Figure 22: Population by race and Hispanic origin, 2007-17
Key user groups hit hardest by unemployment
Figure 23: Unemployment status (seasonally adjusted) among civilian non-institutional population, by age, gender, and race/Hispanic origin, May 2011-May 2012
COMPETITIVE CONTEXT
Beverages containing tea compete with the RTD tea segment
Figure 24: Trop50 television ad, 2012
Vitamins and supplements offer health claims similar to tea
Tea bags spotlight price and sustainability to compete with pods
SEGMENT PERFORMANCE
Key points
RTD tea comprises nearly 60% share
Bags/loose tea account for nearly a quarter share
Refrigerated tea grows sales, offers convenience in large packaging
Instant tea drops sales
Sales of tea and RTD tea products by segment
Figure 25: Sales of selected tea and RTD tea products at current prices, by segment, 2007-17
Figure 26: U.S. sales of tea and RTD tea, by segment, 2010-12
SEGMENT PERFORMANCE—RTD CANNED/BOTTLED TEA (SHELF-STABLE)
Key points
Health and value continue to drive sales of RTD tea
Premium RTD teas seek distinction from everyday brands
Sales and forecast of RTD tea
Figure 27: Sales and forecast of RTD tea, at current prices, 2007-17
SEGMENT PERFORMANCE—BAGS/LOOSE TEA
Key points
Bags/loose tea grows steadily
Single-cup pods help the segment stay innovative
Fair trade concerns attract consumers to bags/loose tea
Sales and forecast of bags/loose tea
Figure 28: Sales and forecast of bags/loose tea, at current prices, 2007-17
SEGMENT PERFORMANCE—RTD REFRIGERATED TEA
Key points
Growth slows but remains strong
Juice drinks challenge RTD refrigerated tea
Sales and forecast of RTD refrigerated tea
Figure 29: Sales and forecast of RTD refrigerated tea, at current prices, 2007-17
SEGMENT PERFORMANCE—INSTANT TEA MIXES
Key points
Instant tea needs a makeover
Sales and forecast of instant tea mixes
Figure 30: Sales and forecast of instant tea mixes, at current prices, 2007-17
RETAIL CHANNELS
Key points
Supermarkets comprise more than a third of the market
Convenience stores and supercenters grow most
Drug stores trail, drop 1.5% in 2012
Channel sales of tea and RTD tea products
Figure 31: U.S. sales of tea and RTD tea products, by channel, at current prices, 2011 and 2012
RETAIL CHANNELS—SUPERMARKETS
Key points
Supermarkets leverage family-sizes during challenging economy
Store brands widen supermarket selection
Supermarket sales of tea and RTD tea products
Figure 32: Supermarket sales of tea and RTD tea products, at current prices, 2007-12
RETAIL CHANNELS—CONVENIENCE STORES
Key points
Convenience stores appeal to on-the-go shoppers
Convenience store sales of tea and RTD tea products
Figure 33: Convenience store sales of tea and RTD tea products, at current prices, 2007-11
RETAIL CHANNELS—SUPERCENTERS AND WAREHOUSE CLUBS
Key points
Supercenters/warehouse clubs offer lowest price points
Supercenter and warehouse club sales of tea and RTD tea products
Figure 34: Supercenter and warehouse club sales of tea and RTD tea products, at current prices, 2007-12 (est.)
RETAIL CHANNELS—DRUG STORES
Key points
Drug stores show strongest year-to-year growth despite small sales
Drug store sales of tea and RTD tea products
Figure 35: Drug store sales of tea and RTD tea products, at current prices, 2007-12 (est.)
RETAIL CHANNELS—OTHER CHANNELS
Key point
Other channel sales slow considerably in estimated 2012
Other channel sales of tea and RTD tea products
Figure 36: Other channel sales of tea and RTD tea products, at current prices, 2007-12 (est.)
RETAIL CHANNELS—NATURAL SUPERMARKETS
Key points
Healthy sales growth despite the recession
Sales of tea and RTD tea in the natural channel
Figure 37: Natural supermarket sales of tea and RTD tea, at current prices, 2009-11*
Figure 38: Natural supermarket sales of tea and RTD tea, at inflation-adjusted prices, 2009-11*
Natural channel sales of tea and RTD tea by segment
Figure 39: Natural supermarket sales of tea and RTD tea, by segment, 2009 and 2011*
Leading brands
Figure 40: Selected natural supermarket brand sales of tea and RTD tea, 2009 and 2011*
Natural channel sales of tea and RTD tea by organic
Figure 41: Natural supermarket sales of tea and rtd tea, by organic, 2009 and 2011*
LEADING COMPANIES
Key points
Ferolito, Vultaggio & Sons tops FDMx market with AriZona RTD tea
Pepsi Lipton Tea Partnership follows VF&S closely, but drops sales
Dr Pepper/Snapple Group and Unilever vie for share, but Unilever declines
Other players account for less than 4% share; Coca-Cola and R. Twining grow substantially
Despite small declines, private label outsells eight of the leading companies
Leading tea and RTD tea product companies
Figure 42: Leading FDMx tea and RTD tea product companies, 2011-12
BRAND SHARE—RTD TEA
Key points
AriZona and Lipton fight for top positioning
Figure 43: Lipton 100% Natural Iced Tea television ad, 2012
Snapple gains 3.6% with Diet Snapple
Coca-Cola declines 3.8% as Nestea and Fuze brands lose ground
Leading FDMx RTD tea products brands
Figure 44: Leading FDMx RTD tea products brands, 2011-12
BRAND SHARE—BAGS/LOOSE TEA
Key points
Lipton maintains top spot in FDMx bags/loose tea segment
Bigelow and Celestial Seasonings angle for second position
Twinings, Tazo, Traditional Medicinals all grow substantially
Private label comprises more share than five of the top companies
Leading FDMx bags/loose tea products brands
Figure 45: Leading FDMx bags/loose tea products brands, 2011-12
BRAND SHARE—REFRIGERATED RTD TEA
Key points
Gold Peak surges as Turkey Hill slips
Other leading brands grow FDMx sales
Private label has strongest presence in the refrigerated RTD segment
Leading FDMx refrigerated RTD tea product brands
Figure 46: Leading FDMx refrigerated RTD tea product brands, 2011-12
BRAND SHARE—INSTANT TEA
Key points
Crystal Light continues to cede sales to 4C, Nestea, and Tazo
Lipton also declines
Figure 47: Lipton Tea & Honey television ad, 2012
Private label falls more than 10%
Leading FDMx instant tea product brands
Figure 48: Leading FDMx instant tea product brands, 2010-11
INNOVATION AND INNOVATORS
Key points
Innovation pace slows in 2012
Figure 49: Number of new regular tea* and RTD (iced) tea product introductions in the U.S. 2007-12***
RTD tea segment—innovation
Figure 50: Top 10 claims in new RTD (iced) tea products in the U.S., 2006-12*
Functional claims in RTD and bags/loose tea
Names communicate the low-sugar proposition
Coconut water makes appearance in RTD tea
Unusual packaging—hot tea on-the-go
Lemon outshines other flavors in RTD tea
Figure 51: Top 10 flavors in new RTD (iced) tea products in the U.S., 2006-12*
Regular tea
Figure 52: Top 10 claims in new regular tea products in the U.S., 2006-12*
Flowers and herbs proliferate in regular tea
Limited-edition to pique consumer interest
Single-cup pod selection continues to grow
MARKETING STRATEGIES
 OVERVIEW
AriZona
Figure 53: Brand analysis of AriZona, 2011
Online initiatives
Lipton
Figure 54: Brand analysis of Lipton, 2012
Lipton Brisk TV spot
Figure 55: Lipton Brisk television ad, 2012
Online initiatives
Snapple
Figure 56: Brand analysis of Snapple, 2012
Half ‘n Half Diet Snapple TV spot
Figure 57: Half ‘n Half Diet Snapple television ad, 2012
Snapple TV spot
Figure 58: Snapple television ad, 2011
Online initiatives
Nestea
Figure 59: Brand analysis of Nestea, 2012
Nestea TV spot
Figure 60: Nestea television ad, 2012
Online initiatives
THE ADULT TEA CONSUMER—USAGE, TYPE, BRANDS, AND FREQUENCY
Key points
RTD iced tea consumption remains stable; consumer base growth through population increase
Household usage of regular tea and instant tea mixes remains unchanged
Figure 61: Incidence of individual consumption of RTD iced tea and incidence of household consumption of instant iced tea mixes and bagged/packaged tea, January 2007-November 2011
Women, the key RTD tea consumer, prefer diet RTD tea over full-calorie version
Figure 62: Personal consumption of RTD tea, by gender, October 2010-November 2011
Adults aged 18-24 show higher-than-average interest in full-calorie RTD teas
Figure 63: Personal consumption of RTD tea, by age, October 2010-November 2011
AriZona increases consumer base during 2009-11
Figure 64: Personal consumption of iced tea by choice of brands, by age, October 2010-November 2011
Household consumption of regular tea remains stable
Figure 65: Trends in household incidence and volume consumption bagged/packaged tea, January 2007-November 2011
Regular tea primarily used to make hot tea
Figure 66: Incidence of household consumption of regular tea, by brewing method, and caffeinated/decaffeinated, by household income, October 2010-November 2011
Regular blend is the topmost type consumed
Figure 67: Household usage of regular tea by types of flavor, by household income, October 2010-November 2011
Lipton continues to be the top regular tea brand
Figure 68: Household usage of regular tea by choice of brands, by household income, October 2010-November 2011
Household consumption of instant tea mixes
Figure 69: Trends in household incidence and volume consumption of instant tea mixes, January 2007-November 2011
Presweetened instant iced tea mixes more popular than unsweetened mixes
Figure 70: Household usage of instant iced tea mixes by type, by household income, October 2010-November 2011
Lipton is the topmost brand of instant tea mixes
Figure 71: Household usage of instant iced tea mixes by choice of brands, by household income, October 2010-November 2011
Green tea is the most popular type of tea
Figure 72: Incidence of personally drinking and buying different types of tea, March 2012
TEA CONSUMPTION BY LOCATION
Home is the top location to consume tea
Figure 73: Incidence of drinking tea by location, by age, March 2012
Figure 74: Incidence of drinking tea by location, by household income, March 2012
TEA PURCHASE BY PACKAGING FORMAT AND TYPE
Bags/loose tea more popular than RTD tea
Figure 75: Tea purchase by packaging format and type, March 2012
Women are more likely than men to buy bags/loose packaging format
Figure 76: Black tea purchase by packaging format, by gender, March 2012
Figure 77: Green tea purchase by packaging format, by gender, March 2012
Figure 78: Fruit/herbal tea purchase by packaging format, by gender, March 2012
Tea shoppers aged 18-44 more interested in RTD tea
Figure 79: Black tea purchase by packaging format, by age, March 2012
Figure 80: Green tea purchase by packaging format, by age, March 2012
Figure 81: Green tea purchase by packaging format, by age, March 2012
Flavored RTD tea more popular than unflavored ones
Figure 82: RTD tea consumption by flavored/unflavored and sweetened/unsweetened, by household income, March 2012
FACTORS INFLUENCING RTD TEA PURCHASE
Choice of tea type, flavors top factors in buying RTD tea
Brand name is important
Low price and price-based promotion important to shoppers
All-natural label and type of sugar makes a difference
Attractive packaging, in-store display, and premium look influences consumers
Figure 83: Degree of influence of various factors in RTD tea purchase decision, March 2012
Figure 84: Degree of influence of various factors in RTD tea purchase decision, by gender, March 2012
ATTITUDES TOWARD BAGS/LOOSE TEA
Consumers tend to buy “regular” brand
Regular tea buyers perceive self-brewed tea healthier than RTD tea
Loose leaf tea presents opportunities, manufacturers need to overcome a few hurdles
Consumers face “too many choices” in buying bags/loose tea
Private labels perceived as good as branded tea
Figure 85: Attitudes toward bagged/loose tea, March 2012
Figure 86: Attitudes toward bagged/loose tea, by gender, March 2012
Figure 87: Attitudes toward bagged/loose tea, by age, March 2012
IMPACT OF RACE/HISPANIC ORIGIN
Key points
Blacks are the key RTD tea consumers
Figure 88: Personal consumption of RTD tea, by race/Hispanic origin, October 2010-November 2011
Blacks show higher-than-average usage of most RTD tea brands
Figure 89: Personal consumption of iced tea by choice of brands, by race/Hispanic origin, October 2010-November 2011
Hispanics show lower-than-average usage of regular tea
Figure 90: Incidence of household consumption of regular tea, by brewing method, and caffeinated/ decaffeinated, by race/Hispanic origin, October 2010-November 2011
Figure 91: Household usage of regular tea by types of flavor, by race/Hispanic origin, October 2010-November 2011
Blacks and Hispanics are the key instant tea mixes consumers
Figure 92: Household incidence and volume consumption of instant tea mixes, by race/Hispanic origin, October 2010-November 2011
Figure 93: Household usage of instant iced tea mixes by type, by race/Hispanic origin, October 2010-November 2011
Blacks and Hispanics offer growth opportunities for loose leaf tea
Figure 94: Attitudes toward bagged/loose tea, by race/Hispanic origin, March 2012
CUSTOM CONSUMER GROUP
Adults aged 18-34 more likely than the average to buy tea at tea rooms/shops
Figure 95: Incidence of drinking tea at outlets outside home, by age, March 2012
Tea drinkers with “fancy” tea repertoire more likely to drink at tea rooms/shops
Figure 96: Incidence of drinking tea at outlets outside home, by incidence of drinking different types of tea, March 2012
Hispanic RTD tea consumption differs by the level of acculturation
Figure 97: Personal incidence of drinking RTD tea, by Hispanic origin/language spoken at home, October 2010-November 2011
THE TEEN CONSUMER—USAGE, TYPES, AND BRANDS
Key points
Teen consumer base for RTD tea declines in 2011
Figure 98: Personal consumption of iced tea among teens, January 2007– November 2011
Teen girls are the key consumer
Figure 99: Personal consumption of iced tea among teens, by gender and age, October 2010-November 2011
Black teens continue to be the key consumers; Hispanic teens show attrition
Figure 100: personal consumption of iced tea among teens, by race/Hispanic origin, October 2010– November 2011
Regular RTD tea more popular among teens compared to diet version
Figure 101: Iced tea usage among teens by regular or diet, by age and gender, October 2010– November 2011
Black teens prefer regular RTD tea
Figure 102: Iced tea usage among teens by regular or diet, by race/Hispanic origin, October 2010– November 2011
AriZona outpaced Lipton to become the top teen choice
Figure 103: Iced tea consumption among teens by brands, by gender and age, October 2010– November 2011
Black teens have a bigger brand repertoire
Figure 104: Iced tea consumption among teens by brands, by race/Hispanic origin, October 2010– November 2011
IRI/BUILDERS PANEL DATA—KEY HOUSEHOLD PURCHASE MEASURES
Canned and bottled tea—consumer insights on key purchase measures
Brand map
Figure 105: Brand map, selected brands of canned and bottled tea buying rate, by household penetration, 2011*
Brand leader characteristics
Key purchase measures
Figure 106: Key purchase measures for the top brands of canned and bottled tea, by household penetration, 2011*
Bagged/loose tea—consumer insights on key purchase measures
Brand map
Figure 107: Brand map, selected brands of bags/loose tea buying rate, by household penetration, 2011*
Brand leader characteristics
Key purchase measures
Figure 108: Key purchase measures for the top brands of bags/loose tea, by household penetration, 2011*
Instant tea mixes—consumer insights on key purchase measures
Brand map
Figure 109: Brand map, selected brands of instant tea mixes buying rate, by household penetration, 2011*
Brand leader characteristics
Key purchase measures
Figure 110: Key purchase measures for the top brands of instant tea mixes, by household penetration, 2011*
APPENDIX—SYMPHONYIRI/BUILDERS PANEL DATA DEFINITIONS
APPENDIX—OTHER USEFUL TABLES
Usage, type, brands, and frequency
Figure 111: Personal consumption of RTD tea, by household income, October 2010-November 2011
Figure 112: Personal consumption of RTD tea, by region, October 2010-November 2011
Figure 113: Personal consumption of iced tea by choice of brands, by gender, October 2010-November 2011
Figure 114: Personal consumption of iced tea by choice of brands, by household income, October 2010-November 2011
Figure 115: Personal consumption of iced tea by choice of brands, by region, October 2010-November 2011
Figure 116: Incidence of household consumption of regular tea, by brewing method, and caffeinated/decaffeinated, by region, October 2010-November 2011
Figure 117: Household usage of regular tea by types of flavor, by region, October 2010-November 2011
Figure 118: Household incidence and volume consumption of instant tea mixes, by household income, October 2010-November 2011
Figure 119: Household incidence and volume consumption of instant tea mixes, by region, October 2010-November 2011
Impact of race/Hispanic origin
Figure 120: Household usage of regular tea by choice of brands, by race/Hispanic origin, October 2010-November 2011
Figure 121: Household usage of instant iced tea mixes by choice of brands, by race/Hispanic origin, October 2010-November 2011
Figure 122: Black tea purchase by packaging format, by race/Hispanic origin, March 2012
APPENDIX—TRADE ASSOCIATIONS