Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- The issues
- Tea and RTD market grows 24% 2012-17; slowdown ahead
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- Figure 1: Total US retail sales and forecast of tea and RTD tea, at current prices, 2012-22
- Instant tea mixes continue to struggle
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- Figure 2: Total US retail sales and forecast of tea and RTD tea, by segment, at current prices, 2012-22
- Consumers have a fridge-full of options to quench their thirst
- The opportunities
- One in five tea drinkers has increased consumption in the past year
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- Figure 3: Tea statements – Change in consumption, May 2017
- Varied perception of products spells a category ripe for targeted marketing
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- Figure 4: Tea attributes, by type, May 2017
- More effort could be made to help tea stand out from other drink options
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- Figure 5: Tea statements – Health, May 2017
- What it means
The Market – What You Need to Know
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- Tea and RTD market grows 24% 2012-17
- Canned/bottled RTD tea continues to lead the category
- Consumers have a fridge-full of options to quench their thirst
- Label updates and sugar taxes could help/hurt tea category
- Less than one in four adults feel in control of stress
Market Size and Forecast
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- Tea and RTD market grows 24% 2012-17
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- Figure 6: Total US retail sales and forecast of tea and RTD tea, at current prices, 2012-22
- Figure 7: Total US retail sales and forecast of tea and RTD tea, at current prices, 2012-22
- Figure 8: Total US retail sales and forecast of tea and RTD tea, at inflation-adjusted prices, 2012-22
Market Breakdown
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- Canned/bottled RTD tea continues to lead the category
- Bagged/loose leaf segment lacks luster
- Dollar sales of refrigerated tea grow 51%
- Instant tea mixes continue to struggle
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- Figure 9: Total US retail sales and forecast of tea and RTD tea, by segment, at current prices, 2012-22
- “Other” channels lead sales of tea
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- Figure 10: Total US retail sales of tea and RTD tea, by channel, at current prices, 2015 and 2017
- Tea sales grow 12% in natural channels 2015-17
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- Figure 11: Natural supermarket sales of tea and RTD tea, at current prices, 2015-17
- Figure 12: Natural supermarket sales of tea and RTD tea, at current prices, 2015-17
Market Perspective
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- Consumers have a fridge-full of options to quench their thirst
- Kombucha takes aim at CSDs
- Tea lattes may help tea compete with coffee
- Tea and lemonade blends can appeal as a lower calorie juice option
- Label updates/anti-sugar laws put the focus on sugar; could help/hurt the category
- Lightly sweetened product imply taste satisfaction, with lower guilt
- Honey may help tea stay ahead of sugar concerns
- Tea on-premise may do more to provide inspiration than competition
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- Figure 13: Tea drinks consumed at home vs away from home, October 2016
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- Figure 14: Coffee/tea drink interest, September 2016
Market Factors
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- Less than one in four adults feel in control of stress
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- Figure 15: Self-perception of stress control, by gender and age, household income, parental status by gender, and employment status, October 2016
Key Players – What You Need to Know
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- Pepsi Lipton controls 20% of MULO sales of tea
- Lipton sees strong growth in refrigerated tea segment
- Bagged, loose leaf, single-cup tea launches on the decline
- RTD and instant launch activity shows increased emphasis on clean products
Company and Brand Sales of Tea and RTD Tea
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- Pepsi Lipton controls 20% of MULO sales of tea
- Sales of tea and RTD tea, by company
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- Figure 16: MULO sales of tea and RTD tea, by leading companies, 52 weeks ending April 17, 2017
- Leaders maintain their position in the 52 weeks ending April 17, 2017
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- Figure 17: MULO sales of tea, by leading companies, rolling 52 weeks 2016 and 2017
What’s Working?
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- Premium positioning benefits the canned/bottled RTD tea segment
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- Figure 18: MULO sales of canned/bottled RTD tea, by leading companies and brands, rolling 52 weeks 2016 and 2017
- Lipton sees strong growth in refrigerated and RTD tea segments; kombucha thrives
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- Figure 19: MULO sales of refrigerated tea, by leading companies and brands, rolling 52 weeks 2016 and 2017
- Bagged/loose leaf/single-cup tea segment stagnates at MULO; strongest activity seen in wellness-focused brands
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- Figure 20: MULO sales of bagged/loose leaf/single cup tea, by leading companies and brands, rolling 52 weeks 2016 and 2017
- RTD launch activity shows increased emphasis on clean products
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- Figure 21: Tea launches, by segment, 2013-17*
- Figure 22: Tea launches – RTD*, by leading claims, 2013-17**
- Unflavored/plain lead RTD launches
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- Figure 23: Tea launches – RTD*, by leading flavors, 2013-17**
- …while bagged/loose leaf, single-cup segment expands flavors
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- Figure 24: Tea launches – Bagged, loose leaf, and single-cup teas, by leading flavors, 2013-17*
- …instant tea mixes highlight international flair
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- Figure 25: Tea launches – Instant tea mixes, by leading flavors, 2013-17*
- RTDs see strong growth in natural channels
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- Figure 26: Natural supermarket sales of tea and RTD tea, by segment, at current prices, 2015-17
What’s Struggling?
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- MULO sales of instant tea mixes decline by 5%
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- Figure 27: MULO sales of instant tea mixes, by leading companies and brands, rolling 52 weeks 2016 and 2017
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- Figure 28: Tea launches – Instant tea mixes, by format, 2013-17*
What’s Next?
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- Brands experiment with mouthfeel of RTDs
- Tea cocktails move tea beyond the non-alcoholic beverage space
- Cooking with tea may kickstart sluggish loose leaf tea sales
The Consumer – What You Need to Know
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- 79% of US adults drink tea
- One in five tea drinkers has increased consumption in the past year
- Interest in flavored/herbal tea on the rise
- Tea has a strong association with relaxation
- Promoting energy may boost morning tea consumption
- More effort could be made to help tea stand out from other drink options
Who’s Drinking Tea?
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- 79% of US adults drink tea
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- Figure 29: Tea consumption – Net, May 2017
- Instance of tea consumption split by gender; tea types vary
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- Figure 30: Share of tea consumption – Net, by gender, May 2017
- 25-44s make up the largest share of tea drinkers
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- Figure 31: Share of tea consumption – Net, by age, May 2017
- Half of teens drink RTD tea
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- Figure 32: Iced-tea (RTD) consumption, 2012-16
- A third of tea drinker comes from HHs earning $100K+
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- Figure 33: Share of tea consumption – Net, by HH income, May 2017
- One in five tea drinkers has increased consumption in the past year
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- Figure 34: Tea statements – Change in consumption, May 2017
Types of Tea Consumed
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- RTD
- Wide range of RTD options give consumers a lot to choose from
- Regular-calorie leads over diet/low-cal RTDs
- Fairly even split between single- and multiserve RTDs among consumers overall
- Kombucha consumption is still relatively low
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- Figure 35: Tea consumption – RTD tea, May 2017
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- Figure 36: Tea consumption – Refrigerated RTD size, by age, May 2017
- Figure 37: RTD tea consumption, by type, 2013-17
- Bagged/loose leaf
- Four in 10 consumers drink bagged tea
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- Figure 38: Tea consumption – Bagged/loose leaf tea, May 2017
- Figure 39: Tea consumption – Bagged/loose leaf tea, by age, May 2017
- Interest in flavored/herbal tea on the rise
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- Figure 40: Tea consumption – Bagged/loose leaf tea, by flavor, 2013-17
- Hot preparation leads iced tea usage for bags
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- Figure 41: Tea consumption – Bagged/loose leaf tea, by purpose, 2013-17
- Single-cup
- Iced tea leads single-cup usage
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- Figure 42: Tea consumption – Single-cup tea, May 2017
- Instant
- Instant iced tea mix use on the decline
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- Figure 43: Tea consumption – Instant iced tea mix, 2013-15
- Caffeinated vs. decaffeinated
- A higher percentage of tea drinkers primarily drink caffeinated varieties
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- Figure 44: Tea statements – Caffeinated, May 2017
- Tea repertoire
- Nearly a quarter of consumers drink 3-4 types of tea
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- Figure 45: Repertoire of tea consumption, May 2017
- Young adults are more likely to purchase multiple tea types
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- Figure 46: Repertoire of tea consumption, by age, May 2017
- Bagged tea leads for being the single tea of choice
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- Figure 47: Repertoire of tea consumption – net types, May 2017
Reasons for Consumption
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- Tea performs well for flavor
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- Figure 48: Reasons for consumption, by type – net, May 2017
- Women are more likely to turn to tea for health reasons
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- Figure 49: Reasons for consumption, by gender, May 2017
- Tea hits a lot of marks for younger consumers, underperforms on flavor
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- Figure 50: Reasons for consumption, by age, May 2017
Drinking Occasions
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- Coffee leads for morning consumption
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- Figure 51: Drinking occasion – daypart, by beverage type, May 2017
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- Figure 52: Drinking occasion – Daypart, by tea type, May 2017
- Promoting energy may boost morning tea consumption
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- Figure 53: Drinking occasion – energy, by beverage type, May 2017
- Figure 54: Drinking occasion – energy, by tea type, by age, May 2017
- Weather occasions may present a strong opportunity for tea marketing
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- Figure 55: Drinking occasion – weather, by beverage type, May 2017
- Figure 56: Drinking occasion – weather, by tea type, May 2017
- Tea most closely competes with water across other occasions
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- Figure 57: Drinking occasion – other occasions, by beverage type, May 2017
Perceptions of Tea
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- Varied perception of products spell a category ripe for targeted marketing
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- Figure 58: Tea attributes, by type, May 2017
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- Figure 59: Tea statements – RTD, May 2017
- Younger consumers have higher perception of RTDs than do older consumers
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- Figure 60: Tea attributes – Type, by age, May 2017
- More effort could be made to help tea stand out from other drink options
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- Figure 61: Tea statements – Health, May 2017
- Tea drinkers aren’t bothered by time
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- Figure 62: Tea statements – Brew, by gender and age, May 2017
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Abbreviations and terms
- Abbreviations
Appendix – The Market
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- Figure 63: Total US retail sales and forecast of refrigerated tea, at current prices, 2012-22
- Figure 64: Total US retail sales and forecast of refrigerated tea, at inflation-adjusted prices, 2012-22
- Figure 65: Total US retail sales and forecast of canned/bottled RTD tea, at current prices, 2012-22
- Figure 66: Total US retail sales and forecast of canned/bottled RTD tea, at inflation-adjusted prices, 2012-22
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- Figure 67: Total US retail sales and forecast of bagged, loose leaf, and single-cup, at current prices, 2012-22
- Figure 68: Total US retail sales and forecast of bagged, loose leaf, and single-cup, at inflation-adjusted prices, 2012-22
- Figure 69: Total US retail sales and forecast of instant tea mixes, at current prices, 2012-22
- Figure 70: Total US retail sales and forecast of instant tea mixes, at inflation-adjusted prices, 2012-22
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- Figure 71: US supermarket sales of tea and RTD tea, at current prices, 2012-17
- Figure 72: US drugstore sales of tea and RTD tea, at current prices, 2012-17
- Figure 73: US sales of tea and RTD tea through other retail channels, at current prices, 2012-17
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Appendix – Key Players
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- Figure 74: MULO sales of tea and RTD tea, by leading companies, rolling 52 weeks 2016 and 2017
- Figure 75: Tea launches, by segment, 2013-17*
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- Figure 76: Tea launches – RTD*, by leading claims, 2013-17**
- Figure 77: Tea launches – Bagged, loose leaf, and single-cup teas, by leading claims, 2013-17*
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- Figure 78: Tea launches – Instant tea mixes, by leading claims, 2013-17*
- Figure 79: Tea launches – RTD*, by leading flavors, 2013-17**
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- Figure 80: Tea launches – Bagged, loose leaf, and single-cup teas, by leading flavors, 2013-17*
- Figure 81: Tea launches – Instant tea mixes, by leading flavors, 2013-17*
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- Figure 82: Tea launches – RTD*, by pack type, 2013-17**
- Figure 83: Tea launches – Bagged, loose leaf, and single-cup teas, by format, 2013-17*
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- Figure 84: Tea launches – Instant tea mixes, by format, 2013-17*
- Figure 85: Natural supermarket sales of tea and RTD tea, by segment, at current prices, 2015-17
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- Figure 86: Natural supermarket sales of tea and RTD tea, by flavor, at current prices, 2015-17
- Figure 87: Natural supermarket sales of tea and RTD tea, by packaging, at current prices, 2015-17
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- Figure 88: Natural supermarket sales of tea and RTD tea, by organic ingredients, at current prices, 2015-17
- Figure 89: Natural supermarket sales of tea and RTD tea, by fair-trade labeling/certification, at current prices, 2015-17
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- Figure 90: Natural supermarket sales of tea and RTD tea, by presence of GMO ingredients, at current prices, 2015-17
- Figure 91: Natural supermarket sales of tea and RTD tea, by "natural" labeling or perception, at current prices, 2015-17
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