Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- Overview
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- Figure 1: Tea consumption, May 2018
- The issues
- Tea and RTD tea growth rates stalling
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- Figure 2: Total US sales and fan chart forecast of tea and RTD tea, at current prices, 2013-23
- RTD tea brands struggle
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- Figure 3: MULO sales of canned/bottled RTD tea, by select brands, rolling 52 weeks 2017 and 2018
- Sugar and artificial ingredients complicate the appeal of RTDs
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- Figure 4: Attitudes toward RTD tea, by age, May 2018
- The opportunities
- Increase consumption frequency
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- Figure 5: Frequency of consumption, by select demographics, May 2018
- Associating tea consumption with self-care
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- Figure 6: Reasons for tea consumption, May 2018
- Further out: look to adjacent categories for inspiration
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- Figure 7: Attitudes toward tea, May 2018
- What it means
The Market – What You Need to Know
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- Growth rate cools as competition increases
- Canned/bottled RTD tea lead category, refrigerated tea adds growth
- Variety of non-alcoholic beverages provide options for consumers
- Health trends have a varied impact on tea market
- Hispanic consumers offer market opportunity
Market Size and Forecast
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- Once strong growth stalling amid competitive beverage market
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- Figure 8: Total US sales and fan chart forecast of tea and RTD tea, at current prices, 2013-23
- Figure 9: Total US sales and forecast of tea and RTD tea, at current prices, 2013-23
Market Breakdown
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- Canned/bottled RTD tea dominates category
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- Figure 10: Share of US retail sales and forecast of tea and RTD tea, by segment, at current prices, 2018
- Refrigerated tea drives growth
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- Figure 11: Total US retail sales of tea and RTD tea, by segment, at current prices, 2016 and 2018
- Other retailers
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- Figure 12: Total US retail sales of tea and RTD tea, by channel, at current prices, 2016 and 2018
Market Perspective
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- Competitive space in non-alcoholic beverages
- Sparkling waters
- Coffee
- Hybrid beverages
- Energy drinks
- Carbonated soft drinks
Market Factors
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- Demonized sugar stalls growth in RTD beverages
- Tea strikes high alignment as a healthy beverage
- The family factor
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- Figure 13: US households, by presence of own children, 2007-17
- Figure 14: Daily tea consumption, by parental status, May 2018
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- Figure 15: Attitudes toward tea, by repertoire of tea types, May 2018
- Hispanic consumers offer opportunity for category growth
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- Figure 16: US Population, by Hispanic origin, 2013-23
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- Figure 17: Daily tea consumption, by Hispanic origin, May 2018
- Strong economy supports premiumization
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- Figure 18: Consumer Sentiment Index, January 2007-July 2018
Key Players – What You Need to Know
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- Pepsi Lipton maintain strong foothold on market share
- New refrigerated teas tracking fresh, healthy
- Kombucha rising
- Stalled sales necessitate segment innovation
- Leverage functional attributes to elevate health benefits
Company and Brand Sales
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- Pepsi Lipton maintains commanding lead in market share
- Sales of tea and RTD tea by company
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- Figure 19: MULO sales of tea and RTD tea, by leading companies, rolling 52 weeks 2017 and 2018
What’s Working?
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- The mainstreaming of kombuchas
- Health and wellness associations fuel interest in refrigerated tea
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- Figure 20: MULO sales of refrigerated tea, by companies and brands, rolling 52 weeks 2017 and 2018
- Refrigerated tea launches support interest in clean beverages
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- Figure 21: Refrigerated tea launches, by leading claims, 2014-18
What’s Struggling?
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- AriZona and Snapple falter, triggering canned/bottled RTD cool down
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- Figure 22: MULO sales of canned/bottled RTD tea, by companies and brands, rolling 52 weeks 2017 and 2018
- Decline in share of RTD tea launches
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- Figure 23: Tea launches, by format, 2014-18
- Instant tea sales continue to decline
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- Figure 24: MULO sales of instant tea mixes, by companies and brands, rolling 52 weeks 2017 and 2018
What’s Next?
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- Promoting tea as part of functional self-care
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- Figure 25: Reasons for tea consumption, May 2018
- For taste: tea to satisfy treat mentality
- For energy: tea as the healthy energy drink
- For relaxation and stress relief…tea to help body and mind unwind
- For improved digestion: tea to help restore balance
The Consumer – What You Need to Know
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- Tea nearly universally consumed
- Tea characteristics exemplify market depth and breadth
- Bottled, single-serve drive RTDs
- Sweet tea still popular, despite sugar revolt
- Daypart, season, and function influence tea choice
- Taste is primary appeal, drinkers also motivated by health and function
- High sugar content, artificial ingredients plague RTDs
The Tea Consumer
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- Majority of adults are tea drinkers
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- Figure 26: Tea consumption, by select demographics, May 2018
- A third of all adults drink tea daily
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- Figure 27: Frequency of consumption, May 2018
- Daily tea users are more likely to be younger, Hispanic, and parents
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- Figure 28: Frequency of consumption, by select demographics, May 2018
Tea Characteristics
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- Iced and hot teas have equal incidence of use
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- Figure 29: Tea temperature, May 2018
- Tea temperature by demographic
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- Figure 30: Tea temperature, by select demographics, May 2018
- Bagged tea captures strongest penetration
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- Figure 31: Forms of tea, brewed teas, May 2018
- Forms of tea by demographic
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- Figure 32: Forms of tea, by select demographics, May 2018
- A variety of tea types show strong consumer acceptance
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- Figure 33: Types of tea, May 2018
- Connection between daily tea drinkers and large repertoire of tea types
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- Figure 34: Repertoire of tea types, by select demographics, May 2018
Tea Varieties
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- Green tea is the most popular variety
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- Figure 35: Tea varieties consumed, May 2018
- Flavored teas popular among young tea drinkers
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- Figure 36: Tea varieties consumed, by age, May 2018
- Hispanic consumers are more likely users of tea blends and therapeutic teas
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- Figure 37: Tea varieties consumed, by Hispanic origin, May 2018
- Strong repertoire of tea types encourages broad use of tea varieties
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- Figure 38: Tea varieties, by repertoire of tea types, May 2018
Tea Formats
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- RTD tea drinkers prefer bottled tea, sweetened regular, single-serving
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- Figure 39: RTD tea formats, May 2018
- Opportunities for RTD marketers to offer a variety of bottled, single-serving teas
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- Figure 40: TURF analysis – RTD tea formats, May 2018
- Figure 41: TURF analysis – RTD tea formats, May 2018
- Varied repertoire of tea types translates to greater acceptance of formats
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- Figure 42: RTD tea formats, by repertoire of tea types, May 2018
Tea Drinking Occasions
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- Hot tea popular at morning and night; iced tea dominates afternoon
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- Figure 43: Tea drinking occasions – Time of day, May 2018
- Hot tea encourages relaxation; iced tea quenches thirst
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- Figure 44: Tea drinking occasions – Functionality, May 2018
Reasons for Tea Consumption
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- Taste drives tea use
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- Figure 45: Reasons for tea consumption, May 2018
- Tea’s health value provides an impetus for use among 18-34s
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- Figure 46: Reasons for tea consumption, by age, May 2018
- Women drink tea because it has fewer calories
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- Figure 47: Reasons for tea consumption, by gender, May 2018
- Tea’s healthy beverage association drives consumption by Hispanic consumers
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- Figure 48: Reasons for tea consumption, by Hispanic origin, May 2018
- Taste, relaxation drive use among heavy users
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- Figure 49: Reasons for tea consumption, by repertoire of tea types, May 2018
Attitudes toward Tea
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- High sugar content and artificial ingredients are negatives of RTD tea
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- Figure 50: Attitudes toward tea, May 2018
- Younger adults show interest in tea innovation
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- Figure 51: Attitudes toward tea, by age, May 2018
- Hispanic consumers will pay more for teas with additional attributes
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- Figure 52: Attitudes toward tea, by Hispanic origin, May 2018
- Tea users with a varied repertoire are willing to pay more innovative tea
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- Figure 53: Attitudes toward tea, by repertoire of tea types, May 2018
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Consumer qualitative research
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Market
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- Figure 54: Total US sales and forecast of tea and RTD tea, at inflation-adjusted prices, 2013-23
- Figure 55: Total US retail sales and forecast of tea and RTD tea, by segment, at current prices, 2013-23
- Figure 56: Total US sales of tea and RTD tea, by channel, at current prices, 2013-23
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Appendix – Key Players
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- Figure 57: MULO sales of bagged, loose leaf, and single-cup tea, by companies and brands, rolling 52 weeks 2017 and 2018
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