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Tea and RTD Teas - US - July 2011

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
Tea market sales growth remains strong; a positive future outlook
The RTD segments continue to be popular
Bagged/loose tea exhibits little growth; instant tea mixes decline
Top five companies account for 51% of the market share
Blacks are the key RTD tea consumers
Teen are an important consumer in the market
Green tea is the topmost variety consumed in the U.S.
Flavor is the top reason to drink tea; health also important
Value-priced packaging can offer growth in the market
Tea drinkers have been paying attention to tea sweeteners
INSIGHTS AND OPPORTUNITIES
Premium teas to offer growth
New research contends RTD tea not as healthy as freshly brewed tea
“Can” format to brew growth
INSPIRE TRENDS
Inspire Trend: “A Simple Balance for Health”
MARKET SIZE AND FORECAST
Key points
Sales growth remains healthy in 2011; a positive future outlook
FDMx sales and forecast of tea and RTD tea
Figure 1: FDMx and convenience store sales and forecast of tea and RTD tea, at current prices, 2006-16
Figure 2: FDMx and convenience store sales and forecast of tea and RTD tea, at inflation-adjusted prices, 2006-16
Fan-chart forecast
Figure 3: Fan chart forecast of FDMx and convenience store sales of tea and RTD tea, at current prices, 2006-16
Walmart sales
MARKET DRIVERS
 HEALTH AND WELLNESS TRENDS
Obesity rates steady, but still a cause for concern
Figure 4: Percentage of population aged 20+ who are overweight, obese, or extremely obese, 1988-2008
Obesity rates among teens continue to grow
Figure 5: Prevalence of obesity among children and adolescents aged 2-19, 1976-2008
More than half of all adults watch their diets; a majority of those seek low-fat/low-sugar food
Figure 6: Trends in watching diet among adults aged 18+, 2005-10
Figure 7: Trends in food attributes sought by adults watching/controlling their diet, May 2005- Sept. 2010
High-fructose corn syrup continues to bother consumers
 DEMOGRAPHIC AND ECONOMIC FACTORS
Teen population offered little growth for 2006-11, better outlook during 2011-16
Figure 8: Teen population by age, 2006-16
Blacks and Hispanics are growth-driving population groups
Figure 9: Population, by race and Hispanic origin, 2006-16
Key RTD tea consumers continue to struggle with unemployment woes
Figure 10: Unemployment status (seasonally adjusted) among civilian non institutional population, by age, gender, and race/Hispanic origin, May 2010–May 2011
COMPETITIVE CONTEXT
Key points
Tea’s antioxidant platform faces multipronged competitive threat
Figure 11: New beverage and vitamin/supplement products using “antioxidant” claim, 2006-11*
Coffefruit—yet another competitor to tea in offering natural antioxidants
Figure 12: New nonalcoholic beverage products with pomegranate and açaí, by beverage segment, 2010
Tea appears as an ingredient/flavor in other beverage categories
Juice category debuts juice + tea trend
Natural energy drinks rely on green tea extract for antioxidant and energy claim
Enhanced water uses tea in flavors, ingredient list to augment health quotient
Competition within the dairy case gets intense
Acquisition activity heats up; competition among premium brands to grow
Nontraditional players invade the RTD tea territory
SEGMENT PERFORMANCE
Key points
FDMx sales and forecast of tea and RTD tea, by segment
Figure 13: FDMx sales and forecast tea and RTD tea, at current prices, by segment, 2006-16
Figure 14: FDMx sales of tea and RTD tea, by segment, 2009 and 2011
SEGMENT PERFORMANCE—RTD SHELF-STABLE CANNED/BOTTLED TEA
Key points
Value and health are the key growth drivers in the segment
Premium teas offer differentiation and growth
Mid-priced brands’ revival can bring incremental growth
Growing competition within RTD tea
FDMx sales and forecast of RTD shelf-stable canned/bottled tea
Figure 15: FDMx sales and forecast of RTD shelf-stable canned and bottled tea, 2006-16
SEGMENT PERFORMANCE—BAGGED/LOOSE TEA
Key points
Bagged/loose tea needs to spiff up its image
Single-cup tea pods can potentially offer growth
FDMx sales and forecast of bagged/loose tea
Figure 16: FDMx sales and forecast of bagged/loose tea, 2006-16
SEGMENT PERFORMANCE—RTD REFRIGERATED TEA
Key points
RTD refrigerated tea has growth potential, but not without challenges
FDMx sales and forecast of RTD refrigerated tea
Figure 17: FDMx sales and forecast of RTD refrigerated tea, 2006-16
SEGMENT PERFORMANCE—INSTANT TEA MIXES
Key points
Instant tea mixes face competition from other teas and beverage mixes
FDMx sales and forecast of instant tea mixes
Figure 18: FDMx sales and forecast of instant tea mixes, 2006-16
RETAIL CHANNELS
Key points
Supermarkets lose market share to convenience stores
Figure 19: U.S. FDMx and convenience stores sales of tea and RTD tea, by channel, 2009 and 2011
RETAIL CHANNELS—SUPERMARKETS
Supermarkets tea sales recover after a dip in 2008
Figure 20: U.S. sales of tea and RTD tea at supermarkets, 2006-11
RETAIL CHANNELS—CONVENIENCE STORES
RTD tea gains share from other beverages in convenience stores
Figure 21: U.S. sales of RTD tea at convenience stores, 2006-11
RETAIL CHANNELS—NATURAL SUPERMARKETS
Key points
Kombucha’s decline influences tea sales in natural channel
Sales of tea and RTD teas in the natural channel
Figure 22: Natural supermarket sales of teas and RTD tea, at current prices, 2009-11*
Natural channel sales by segment
Figure 23: Natural supermarket sales of teas and RTD tea, by segment, 2009 and 2011*
Kombucha—before and after the recall
Leading brands
Figure 24: leading natural supermarket brand sales of teas and RTD tea, by brand 2009* and 2011*
Natural channel sales by organic content
Figure 25: Natural supermarket sales of teas and RTD tea, by organic content, 2009* and 2011*
COMPANIES AND BRANDS
Key points
PepsiCo/Lipton partnership loses market share
Ferolito, Vultaggio & Sons’ AriZona takes the top position
Coca-Cola gains market share on the strength of Gold Peak
Nestlé expands its portfolio into RTD segment; acquires Sweet Leaf Tea
Private labels grow sales but lose market share
Figure 26: FDMx tea and RTD tea sales of leading companies, 2010 and 2011
BRAND SHARE—RTD SHELF-STABLE CANNED/BOTTLED TEA
Key points
Most Lipton varieties lose market share; brand focuses on all-natural claim
AriZona faces tough competition as competitors emulate strategies
Nestea loses sales; Gold Peak gains
Private label continues to attract price-sensitive consumers
Among “other” brands Peace Tea shows promising growth
Figure 27: FDMx brand sales of canned and bottled tea, 2010 and 2011
BRAND SHARE—BAGGED/LOOSE TEA
Key points
Unilever’s Lipton continues to decline
Premium brands show small growth
Single-cup brands small but growing
Figure 28: FDMx brand sales of bagged/loose tea, part 1, 2010 and 2011
Figure 29: FDMx brand sales of bagged/loose tea, part 2, 2010 and 2011
BRAND SHARE—RTD REFRIGERATED TEA
Key points
Turkey Hill tops the list; faces growing competition from national brands
Private labels are the second-biggest player in the segment
Figure 30: FDMx brand sales of refrigerated tea, 2010 and 2011
BRAND SHARE—INSTANT TEA MIXES
Key points
Kraft and Unilever retain top positions, but lose market share
Figure 31: FDMx brand sales of instant tea mixes, 2010 and 2011
INNOVATIONS AND INNOVATORS
Figure 32: Number of new regular tea* and RTD (iced) tea product introductions in the U.S. 2006-11***
Innovation in RTD tea segment
Figure 33: Top 10 claims in new RTD (iced) tea products in the U.S., 2006-11*
Purity-based innovations complement tea’s pro-health platform
Sweet tea and homemade claims strong
Cane sugar and stevia gain ground; lightly sweetened instead of liquid candy
Fruit flavors dominate in RTD tea
Figure 34: Top 10 flavors in new RTD (iced) tea products in the U.S., 2006-11*
Innovation in regular tea segment
Top claims underscore pro-health attributes
Figure 35: Top 10 claims in new regular tea products in the U.S., 2006-11*
Chocolate flavor popularity grows in new regular tea products
The rise of tea pods
MARKETING STRATEGIES
Engaging a “celebrity” to become a spokesperson for the brand
TV advertisements
Lipton Brisk engages Eminem—a move to attract teens and young adults
Figure 36: Lipton Brisk—Eminem has demands for his commercial, TV ad, 2011
Snapple touts real tea and taste attributes in diet tea
Figure 37: Diet Snapple—tour guide drives around factory, TV ad, 2011
Yogi Tea emphasizes taste and ingredients
Figure 38: Diet Snapple—Animated women do cartwheels, spin, and dance, TV ad, 2011
Tea brands connect with consumers through social media
Snapple’s Facebook is an extension of its other marketing efforts
THE ADULT TEA CONSUMER: USAGE, TYPE, BRANDS, AND FREQUENCY
Key points
RTD iced tea gains consumers
Figure 39: Incidence of individual consumption of RTD iced tea and incidence of household consumption of instant iced tea mixes and bagged/packaged tea, January 2006-December 2010
Adults aged 18-24 show growing interest in RTD tea
Figure 40: Incidence of individual consumption of RTD iced tea, by key demographic groups, January 2006-December 2010
Most RTD tea drinkers prefer regular calorie tea, compared to diet
Figure 41: RTD iced tea usage, regular vs. diet, by key demographics, October 2009-December 2010
Lipton is the top RTD iced tea brand
Figure 42: Personal consumption of iced tea by choice of brands, by age, October 2009-December 2010
Figure 43: Personal consumption of iced tea by choice of brands, by household income, October 2009-December 2010
Household consumption of regular bagged/loose tea and instant tea mixes
Figure 44: Incidence of household consumption of regular tea and instant iced tea mixes, October 2009-December 2010
Trends in household volume consumption of bagged/loose tea and instant tea mixes
Figure 45: Household frequency of drinking bagged/loose tea and instant tea mixes on an average day, January 2006-December 2010
Types and flavors of regular tea and instant iced tea mix
Regular tea in bags/packages
Figure 46: Types of regular tea used in households, by household income, October 2009-December 2010
Regular tea more popular to make hot tea than iced tea
Figure 47: Household usage of regular tea by types of brewing, by region, October 2009-December 2010
Regular blend is more popular compared to other types of tea
Figure 48: Household usage of regular tea by types of flavor, by region, October 2009-December 2010
Lipton continues its number one position in regular tea brands
Figure 49: Household usage of regular tea by choice of brands, by household income, October 2009-December 2010
Presweetened instant iced tea mixes more popular than unsweetened mixes
Figure 50: Household usage of instant iced tea mixes by type, by age of householder, October 2009-December 2010
Lipton is the topmost brand of instant tea mixes
Figure 51: Household usage of instant iced tea mixes by choice of brands, by age of householder, October 2009-December 2010
Freshly brewed hot tea is the most popular tea format
Figure 52: Types of tea by frequency of use, March 2011
Figure 53: Personal incidence of drinking different types of tea, by age, March 2011
Non-organic more popular than organic
Figure 54: Incidence of drinking tea by organic and non-organic, by age, March 2011
Green is the most consumed tea in the U.S.
Figure 55: Incidence of drinking tea by type, by gender, March 2011
Figure 56: Incidence of drinking tea by type, by age, March 2011
Green tea is the favorite flavor for most tea drinkers
Figure 57: Favorite tea flavors, March 2011
Incidence of drinking tea types by occasion of drinking tea
Figure 58: Favorite tea flavors, by occasion of drinking tea, March 2011
THE TEA CONSUMER—ATTITUDES AND BEHAVIOR
Attitudes toward organic and Fair Trade -certified tea
Figure 59: Attitudes toward and behavior in using organic and Fair Trade-certified tea, by age, March 2011
Reasons for drinking tea and attitudes toward packaging/RTD tea sweeteners
Flavor is the top attribute among tea drinkers
Tea drinkers turn to value-priced packaging
Tea drinkers have been paying attention to tea sweeteners
Figure 60: Reasons for drinking tea and attitudes toward packaging and RTD tea sweeteners, by age, March 2011
Most tea drinkers brew one cup of tea at a time
Tea drinkers look for premium tea
One in 10 tea drinkers likes to visit social media website of favorite tea brand
Figure 61: Tea brewing habits and tea drinking and buying behavior, by gender, March 2011
Figure 62: Tea brewing habits and tea drinking and buying behavior, by age, March 2011
Attitudes toward different types of tea format and tea usage in making other foods and beverages
Carbonated tea has potential for success
Tea growth possible through using tea in other food and beverages
Figure 63: Attitudes toward different types of tea format and tea usage in making other foods and beverages, by gender, March 2011
Figure 64: Attitudes toward different types of tea format and tea usage in making other foods and beverages, by age, March 2011
IMPACT OF RACE/HISPANIC ORIGIN
Blacks are the key consumer for RTD iced tea; Hispanics showing growth
Figure 65: Incidence of individual consumption of RTD iced tea, by race/Hispanic origin, January 2006-December 2010
Blacks prefer regular iced tea compared to diet
Figure 66: RTD iced tea usage, regular vs. diet, by race/Hispanic origin, October 2009-December 2010
Figure 67: Personal consumption of iced tea by choice of brands, by race/Hispanic origin, October 2009-December 2010
Black and Hispanic households are the key instant iced tea consumers
Figure 68: Incidence of household consumption of regular tea and instant iced tea mixes, by race/Hispanic origin, October 2009-December 2010
Figure 69: Household usage of instant iced tea mixes by type, by race/Hispanic origin, October 2009-December 2010
Figure 70: Incidence of drinking tea by type, by race/Hispanic origin, February 2010
Blacks most likely to use family-size packaging
Figure 71: Reasons for drinking tea and attitudes toward packaging and RTD tea sweeteners, by race/Hispanic origin, March 2011
THE TEEN CONSUMER: USAGE, TYPES, AND BRANDS
Key points
Teen consumer base for RTD tea grows
Figure 72: Personal consumption of iced tea among teens, January 2006–December 2010
Teen girls more interested in iced tea compared to boys
Figure 73: Personal consumption of iced tea among teens, by gender and age, October 2009–December 2010
Black teens are the key consumers
Figure 74: Personal consumption of iced tea among teens, by race/Hispanic origin, October 2009–December 2010
Most teens prefer regular iced tea compared to diet
Figure 75: Iced tea usage among teens by regular or diet, by age and gender, October 2009–December 2010
Black and Hispanic teens prefer regular RTD tea
Figure 76: Iced tea usage among teens by regular or diet, by race/Hispanic origin, October 2009–December 2010
AriZona shows considerable growth in teen consumer base
Figure 77: Iced tea consumption among teens by brands, by gender and age, October 2009–December 2010
Black teens show higher-than-average usage for most brands
Figure 78: Iced tea consumption among teens by brands, by race/Hispanic origin, October 2009–December 2010
THE CUSTOM CONSUMER
Gender- and age-based differences exist in choosing different types of tea
Figure 79: Incidence of drinking different types of tea, by age and gender, March 2011
Men aged 18-34 are the primary organic tea consumer
Figure 80: Incidence of drinking organic and non-organic tea, by age and gender, March 2011
Green tea more popular among young adults
Figure 81: Incidence of drinking organic and non-organic tea, by age and gender, March 2011
Smartphone owners more likely than non-owners to drink all types of tea
Figure 82: Incidence of drinking different types of tea, by Smartphone owners and non-owners, March 2011
Older black adults more likely than the younger ones to drink RTD tea
Figure 83: Incidence of drinking RTD tea among blacks, by age and gender, October 2009-December 2010
CLUSTER ANALYSIS
Tepid Tea Drinkers
Demographics
Characteristics
Opportunity
Judicious Tea Drinkers
Demographics
Characteristics
Opportunity
Avid Tea Drinkers
Demographics
Characteristics
Opportunity
Characteristic tables
Figure 84: Tea drinker consumer clusters, March 2011
Figure 85: Types of tea by frequency of use, by tea drinker consumer clusters, March 2011
Figure 86: Incidence of drinking organic tea by type, by tea drinker consumer clusters, March 2011
Figure 87: Incidence of drinking non-organic tea by type, by tea drinker consumer clusters, March 2011
Figure 88: Incidence of not drinking teas by type, by tea drinker consumer clusters, March 2011
Figure 89: Reasons for drinking tea and attitudes toward packaging and RTD tea sweeteners, by tea drinker consumer clusters, March 2011
Figure 90: Attitudes toward and behavior in using organic and Fair Trade-certified tea, by tea drinker consumer clusters, March 2011
Figure 91: Tea brewing habits and tea drinking and buying behavior, by tea drinker consumer clusters, March 2011
Figure 92: Attitudes toward different types of tea format and tea usage in making other foods and beverages, by tea drinker consumer clusters, March 2011
Demographic tables
Figure 93: Tea drinker consumer clusters, by gender, March 2011
Figure 94: Tea drinker consumer clusters, by age, March 2011
Figure 95: Tea drinker consumer clusters, by household income, March 2011
Figure 96: Tea drinker consumer clusters, by race, March 2011
Figure 97: Tea drinker consumer clusters, by race/Hispanic origin, March 2011
Cluster methodology:
SYMPHONYIRI/BUILDERS PANEL DATA: KEY HOUSEHOLD PURCHASE MEASURES
 CANNED AND BOTTLED TEA: KEY HOUSEHOLD PURCHASE MEASURES
Overview
Canned and bottled tea: consumer insights on key purchase measures
Brand map
Figure 98: Brand map, selected brands of canned and bottled tea buying rate by household penetration, 2010*
Brand leader characteristics
Key purchase measures
Figure 99: Key purchase measures for the top brands of canned and bottled tea, by household penetration, 2010*
 BAGS/LOOSE TEA—KEY HOUSEHOLD PURCHASE MEASURES
Bags/loose tea: consumer insights on key purchase measures
Brand map
Figure 100: Brand map, selected brands of bags/loose tea buying rate by household penetration, 2010*
Brand leader characteristics
Key purchase measures
Figure 101: Key purchase measures for the top brands of bags/loose tea, by household penetration, 2010*
 INSTANT TEA MIXES—KEY HOUSEHOLD PURCHASE MEASURES
Consumer insights on key purchase measures—instant tea mixes
Brand map
Figure 102: Brand map, selected brands of instant tea mixes buying rate by household penetration, 2010*
Brand leader characteristics
Key purchase measures
Figure 103: Key purchase measures for the top brands of instant tea mixes, by household penetration, 2010*
APPENDIX—IRI/BUILDERS PANEL DATA DEFINITIONS
APPENDIX—OTHER USEFUL TABLES
Brand usage of RTD iced tea
Figure 104: Personal consumption of iced tea by choice of brands, by gender, October 2009-December 2010
Figure 105: Personal consumption of iced tea by choice of brands, by region, October 2009-December 2010
Attitude toward organic and Fair Trade-certified tea
Figure 106: Attitudes toward and behavior in using organic and Fair Trade-certified tea, by household income, March 2011
Reasons for drinking tea and attitudes toward packaging/RTD tea sweeteners
Figure 107: Reasons for drinking tea and attitudes toward packaging and RTD tea sweeteners, by gender, March 2011
Impact of race/Hispanic origin
Figure 108: Types of regular tea used in households, by race/Hispanic origin, October 2009-December 2010
Figure 109: Household usage of regular tea by types of flavor, by race/Hispanic origin, October 2009-December 2010
Figure 110: Household usage of regular tea by choice of brands, by race/Hispanic, October 2009-December 2010
Figure 111: Household usage of instant iced tea mixes by choice of brands, by race/Hispanic, October 2009-December 2010
Figure 112: Household usage of regular tea by type of brewing, by race/Hispanic origin, October 2009-December 2010
Figure 113: Personal incidence of drinking different types of tea, by race/Hispanic origin March 2011
Figure 114: Tea brewing habits and tea drinking and buying behavior, by race/Hispanic origin, March 2011
Figure 115: Attitudes toward different types of tea format and tea usage in making other foods and beverages, by race/Hispanic origin, March 2011
APPENDIX—TRADE ASSOCIATIONS

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