Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Advertising creative
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- The market
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- 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
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- Figure 2: Tea and RTD tea market share, by segment, 2012 (est.)
- Forecast
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- 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
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- 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
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- 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
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- Figure 6: FDMx manufacturers sales of tea and RTD Tea, 2012*
- Private labels discontinue the growth streak in most segments during 2011-12
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- Figure 7: Percent change in FDMx private label dollar sales, by segments, 2008-12
- Innovation pace strong in 2011
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- 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
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- 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
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- Figure 10: Personal consumption of iced tea among teens, January 2007-November 2011
- Bags/loose tea more popular than RTD tea
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- Figure 11: Tea purchase by packaging format and type, March 2012
- Home is the top location to consume tea
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- Figure 12: Incidence of drinking tea by location, March 2012
- Choice of tea type, flavors, and brand name top factors in buying RTD tea
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- 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
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- Figure 14: Attitudes toward bagged/loose tea, March 2012
- What we think
Issues in the Market
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- 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
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- Differentiate RTD tea from other tea-based non-alcoholic beverages
- In-store demonstrations and trial can benefit loose tea
Inspire Insights
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- Trend: Guiding Choices
- Trend: Transumers
Market Size and Forecast
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- 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
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- 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
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- Figure 17: Total U.S. sales and fan chart forecast of tea and RTD tea, at current prices, 2007-17
- Walmart sales
Market Drivers
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- Key points
- Health and wellness trends and their impact on the market
- Adult obesity rates increase in 2009-10
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- Figure 18: Percentage of population aged 20+ who are overweight, obese, or extremely obese, 1988-2010
- Teen obesity rates
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- 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
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- 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
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- Figure 21: Teen population, by age, 2007-17
- Blacks, Hispanics, and Asians drink RTD tea more than whites do
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- Figure 22: Population by race and Hispanic origin, 2007-17
- Key user groups hit hardest by unemployment
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- Figure 23: Unemployment status (seasonally adjusted) among civilian non-institutional population, by age, gender, and race/Hispanic origin, May 2011-May 2012
Competitive Context
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- Beverages containing tea compete with the RTD tea segment
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- 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
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- 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
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- 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)
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- 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
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- Figure 27: Sales and forecast of RTD tea, at current prices, 2007-17
Segment Performance—Bags/Loose Tea
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- 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
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- Figure 28: Sales and forecast of bags/loose tea, at current prices, 2007-17
Segment Performance—RTD Refrigerated Tea
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- Key points
- Growth slows but remains strong
- Juice drinks challenge RTD refrigerated tea
- Sales and forecast of RTD refrigerated tea
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- Figure 29: Sales and forecast of RTD refrigerated tea, at current prices, 2007-17
Segment Performance—Instant Tea Mixes
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- Key points
- Instant tea needs a makeover
- Sales and forecast of instant tea mixes
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- Figure 30: Sales and forecast of instant tea mixes, at current prices, 2007-17
Retail Channels
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- 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
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- Figure 31: U.S. sales of tea and RTD tea products, by channel, at current prices, 2011 and 2012
Retail Channels—Supermarkets
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- Key points
- Supermarkets leverage family-sizes during challenging economy
- Store brands widen supermarket selection
- Supermarket sales of tea and RTD tea products
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- Figure 32: Supermarket sales of tea and RTD tea products, at current prices, 2007-12
Retail Channels—Convenience Stores
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- Key points
- Convenience stores appeal to on-the-go shoppers
- Convenience store sales of tea and RTD tea products
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- Figure 33: Convenience store sales of tea and RTD tea products, at current prices, 2007-11
Retail Channels—Supercenters and Warehouse Clubs
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- Key points
- Supercenters/warehouse clubs offer lowest price points
- Supercenter and warehouse club sales of tea and RTD tea products
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- Figure 34: Supercenter and warehouse club sales of tea and RTD tea products, at current prices, 2007-12 (est.)
Retail Channels—Drug Stores
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- Key points
- Drug stores show strongest year-to-year growth despite small sales
- Drug store sales of tea and RTD tea products
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- Figure 35: Drug store sales of tea and RTD tea products, at current prices, 2007-12 (est.)
Retail Channels—Other Channels
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- Key point
- Other channel sales slow considerably in estimated 2012
- Other channel sales of tea and RTD tea products
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- Figure 36: Other channel sales of tea and RTD tea products, at current prices, 2007-12 (est.)
Retail Channels—Natural Supermarkets
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- Key points
- Healthy sales growth despite the recession
- Sales of tea and RTD tea in the natural channel
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- 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
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- Figure 39: Natural supermarket sales of tea and RTD tea, by segment, 2009 and 2011*
- Leading brands
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- 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
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- Figure 41: Natural supermarket sales of tea and rtd tea, by organic, 2009 and 2011*
Leading Companies
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- 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
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- Figure 42: Leading FDMx tea and RTD tea product companies, 2011-12
Brand Share—RTD Tea
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- Key points
- AriZona and Lipton fight for top positioning
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- 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
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- Figure 44: Leading FDMx RTD tea products brands, 2011-12
Brand Share—Bags/Loose Tea
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- 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
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- Figure 45: Leading FDMx bags/loose tea products brands, 2011-12
Brand Share—Refrigerated RTD Tea
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- 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
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- Figure 46: Leading FDMx refrigerated RTD tea product brands, 2011-12
Brand Share—Instant Tea
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- Key points
- Crystal Light continues to cede sales to 4C, Nestea, and Tazo
- Lipton also declines
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- Figure 47: Lipton Tea & Honey television ad, 2012
- Private label falls more than 10%
- Leading FDMx instant tea product brands
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- Figure 48: Leading FDMx instant tea product brands, 2010-11
Innovation and Innovators
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- Key points
- Innovation pace slows in 2012
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- Figure 49: Number of new regular tea* and RTD (iced) tea product introductions in the U.S. 2007-12***
- RTD tea segment—innovation
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- 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
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- Figure 51: Top 10 flavors in new RTD (iced) tea products in the U.S., 2006-12*
- Regular tea
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- 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
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- Overview
- AriZona
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- Figure 53: Brand analysis of AriZona, 2011
- Online initiatives
- Lipton
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- Figure 54: Brand analysis of Lipton, 2012
- Lipton Brisk TV spot
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- Figure 55: Lipton Brisk television ad, 2012
- Online initiatives
- Snapple
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- Figure 56: Brand analysis of Snapple, 2012
- Half ‘n Half Diet Snapple TV spot
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- Figure 57: Half ‘n Half Diet Snapple television ad, 2012
- Snapple TV spot
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- Figure 58: Snapple television ad, 2011
- Online initiatives
- Nestea
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- Figure 59: Brand analysis of Nestea, 2012
- Nestea TV spot
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- Figure 60: Nestea television ad, 2012
- Online initiatives
The Adult Tea Consumer—Usage, Type, Brands, and Frequency
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- 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
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- 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
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- 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
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- Figure 63: Personal consumption of RTD tea, by age, October 2010-November 2011
- AriZona increases consumer base during 2009-11
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- Figure 64: Personal consumption of iced tea by choice of brands, by age, October 2010-November 2011
- Household consumption of regular tea remains stable
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- Figure 65: Trends in household incidence and volume consumption bagged/packaged tea, January 2007-November 2011
- Regular tea primarily used to make hot tea
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- 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
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- 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
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- Figure 68: Household usage of regular tea by choice of brands, by household income, October 2010-November 2011
- Household consumption of instant tea mixes
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- 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
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- 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
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- 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
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- Figure 72: Incidence of personally drinking and buying different types of tea, March 2012
Tea Consumption By Location
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- Home is the top location to consume tea
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- Figure 73: Incidence of drinking tea by location, by age, March 2012
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- Figure 74: Incidence of drinking tea by location, by household income, March 2012
Tea Purchase By Packaging Format and Type
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- Bags/loose tea more popular than RTD tea
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- Figure 75: Tea purchase by packaging format and type, March 2012
- Women are more likely than men to buy bags/loose packaging format
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- Figure 76: Black tea purchase by packaging format, by gender, March 2012
- Figure 77: Green tea purchase by packaging format, by gender, March 2012
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- Figure 78: Fruit/herbal tea purchase by packaging format, by gender, March 2012
- Tea shoppers aged 18-44 more interested in RTD tea
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- Figure 79: Black tea purchase by packaging format, by age, March 2012
- Figure 80: Green tea purchase by packaging format, by age, March 2012
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- Figure 81: Green tea purchase by packaging format, by age, March 2012
- Flavored RTD tea more popular than unflavored ones
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- Figure 82: RTD tea consumption by flavored/unflavored and sweetened/unsweetened, by household income, March 2012
Factors Influencing RTD Tea Purchase
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- 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
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- Figure 83: Degree of influence of various factors in RTD tea purchase decision, March 2012
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- Figure 84: Degree of influence of various factors in RTD tea purchase decision, by gender, March 2012
Attitudes Toward Bags/Loose Tea
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- 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
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- Figure 85: Attitudes toward bagged/loose tea, March 2012
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- 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
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- Key points
- Blacks are the key RTD tea consumers
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- 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
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- 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
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- Figure 90: Incidence of household consumption of regular tea, by brewing method, and caffeinated/ decaffeinated, by race/Hispanic origin, October 2010-November 2011
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- 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
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- 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
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- Figure 94: Attitudes toward bagged/loose tea, by race/Hispanic origin, March 2012
Custom Consumer Group
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- Adults aged 18-34 more likely than the average to buy tea at tea rooms/shops
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- 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
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- 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
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- 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
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- Key points
- Teen consumer base for RTD tea declines in 2011
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- Figure 98: Personal consumption of iced tea among teens, January 2007– November 2011
- Teen girls are the key consumer
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- 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
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- 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
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- 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
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- 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
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- Figure 103: Iced tea consumption among teens by brands, by gender and age, October 2010– November 2011
- Black teens have a bigger brand repertoire
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- 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
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- Canned and bottled tea—consumer insights on key purchase measures
- Brand map
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- Figure 105: Brand map, selected brands of canned and bottled tea buying rate, by household penetration, 2011*
- Brand leader characteristics
- Key purchase measures
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- 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
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- Figure 107: Brand map, selected brands of bags/loose tea buying rate, by household penetration, 2011*
- Brand leader characteristics
- Key purchase measures
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- 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
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- Figure 109: Brand map, selected brands of instant tea mixes buying rate, by household penetration, 2011*
- Brand leader characteristics
- Key purchase measures
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- 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
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- Usage, type, brands, and frequency
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- 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
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- 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
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- 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
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- 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
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- 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
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