Demand Grows for Juices and Teas

Tea Truths

The U.S. is the birthplace of iced tea. More than 80% of tea consumed here is still sold as an iced drink. Tea sales in the U.S. are expected to exceed a phenomenal $10 billion in 2010 for both beverage and non-beverage categories, according to Worldteaexpo.com

In the U.S., 37% of consumers prefer organic tea to conventional brands. And Nearly 60% of US consumers said that the flavor they enjoy most in tea is some type of fruit flavor, according to a study by Mintel’s Tea and RTD Tea drink study.

The health and wellness trend, which has been present in the beverage category for some time now, is helping to drive sales in juices and teas, which offer consumers the antioxidants and healthful ingredients they crave. 

Consumers continue to look for better-for-you beverage choices, including reduced calorie, sugar-free, organic and all-natural varieties. For example, Snapple stepped up to meet this demand recently, by revamping its line of teas and juices. Now its products contain all-natural ingredients, and real sugar instead of high fructose corn syrup, which has a negative connotation with many consumers.

Functional beverages that provide added vitamins, digestive health benefits or superfruit flavors that offer antioxidants also are popular with consumers.  Among superfruit flavors, açai remains an especially trendy variety.

Three shelf stable juice drinks were among the top 100 products, according to a study by The Nielsen Co. Most of the top new items are line extensions of existing brands, and include alternate sizes, flavors, new packaging and health claims. While manufacturers might be tempted to cut back on new product development, new brands are needed to win back consumers who may have switched to private label products.

Ninty-three decision makers for the Convenience Store Decisions’ 2009 Brand Preference Study, ranked Lipton (PepsiCo), Tropicana (PepsiCo.) and Minute Maid (Coca-Cola Co.) as top performers in the tea and juice category.

Tracking the Trends

Whether juices and teas are just getting by in this tough economy or continuing to show growth depends on which research data you consult.

According to Information Resources Inc. (IRI), canned and bottled tea sales in c-stores for the 52 weeks ended April 19, 2009 totaled $216.18 million and are up 3.8% from the previous year. The refrigerated juices and drinks category sales totaled $113.7 million and are up 4.87%. Refrigerated tea sales totaled $43.81 million and are up 16.13%.

However,  according to Nielsen Co. data, for the 52 weeks ended March 21, 2009, juices and juice drink sales in c-stores totaled $1.8 billion, and are down 2.1% compared to last year. Ready-to-drink (RTD) ice tea sales in c-stores totaled $1 billion in sales and are down 1.9%.

Tea Trends
Beverage Marketing Corp. called iced tea “one of the bedrock sectors of New Age beverages.”

The Grocery Showcase West conference this past March also showed the beverage category moving toward iced tea, cold teas and tea fused with other products to make cold and ready-to-serve beverages. Many beverages are using black currents in juices, and using the term “wild” to describe a fruit or berry’s origin. While it had been previously predicted that a decline in tea sales was imminent, the show revealed that tea sales and new tea products are increasing.

 

BrandDollar Sales% change from 2008
Arizona$66,818,7205.07%
Lipton31,932,600-10.22
Lipton Pureleaf25,778,960-4.37
Snapple18,114,720-9.12
Lipton Brisk Tea15,776,43029.66

Information Resources Inc. for the 52 weeks ended April 19, 2009

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