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Tea: Spotlight on Bagged/Looseleaf Tea - US - August 2016

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
The issues
Bagged/loose leaf tea sales decline
Figure 1: Total US retail sales and forecast of tea and RTD tea, by segment, at current prices, 2011-21
Tea remains second to coffee consumption
Figure 2: Mintel Beverage Tracker – Recent coffee/tea consumption at and away from home, trended December 2014 to April 2016
High bagged tea consumption rates do not translate to sales gains
Figure 3: Tea consumption – Any consumption, June 2016
Need to expand usage occasions among US drinkers
Figure 4: Attitudes toward brewed tea – Hot tea is only good when I am sick, June 2016
The opportunities
Brewed tea premiumization opportunity
Figure 5: Attitudes toward brewed tea – Premiumization, June 2016
Brewed tea consumers believe health benefits
Figure 6: Attitudes toward brewed tea – Health, June 2016
RTD innovation featuring health, functionality, and specialty preparation methods
Figure 7: Ready-to-drink tea innovation, June 2016
Expand usage occasions for brewed and RTD teas
Figure 8: Tea drinking occasion, June 2016
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Tea and RTD tea grows 5.6% in estimated 2016
Canned/bottled RTD teas leading segment performer
Bagged/loose leaf tea competes with RTD varieties, and tea with coffee
MARKET SIZE AND FORECAST
Category sales forecast to grow 5.6% in 2016
Figure 9: Total US retail sales and fan chart forecast of tea and RTD tea, at current prices, 2011-21
Figure 10: Total US retail sales and forecast of tea and RTD tea, at current prices, 2011-21
Figure 11: Total US retail sales and forecast of tea and RTD tea, at inflation-adjusted prices, 2011-21
MARKET BREAKDOWN
Canned/bottled tea segment dominates the category
Figure 12: Total US retail sales and forecast of tea and RTD tea, by segment, at current prices, 2011-21
Canned/bottled, refrigerated teas expected to grow through 2021
Figure 13: Total US retail sales and forecast of tea and RTD tea, by segment, at current prices, 2011-21
Supermarkets, “other” channels dominate in tea sales
Figure 14: Total US retail sales of tea and RTD tea, by channel, at current prices, 2011-16
Natural channel tea sales outpace the overall category
Figure 15: Natural supermarket sales of tea, at current prices, rolling 52 weeks April 2014 to April 2016
Bagged/loose leaf teas leading segment at natural channels
Figure 16: Natural supermarket sales of tea, by segment, at current prices, rolling 52 weeks ending April 2016
MARKET PERSPECTIVE
RTD tea versus bagged/loose leaf tea
Figure 17: Tea consumption – Any consumption, June 2016
Figure 18: Tea consumption – Bagged/loose leaf/single cup tea, by Tea consumption - RTD tea, June 2016
Figure 19: Tea consumption – RTD tea, by tea consumption – Bagged/loose leaf/single cup tea, June 2016
Coffee more popular than tea
Figure 20: Mintel Beverage Tracker – Recent coffee/tea consumption at and away from home, trended December 2014 to April 2016
At-home tea consumption dominates foodservice consumption
Figure 21: Mintel Beverage Tracker – Recent tea consumption, by at-home and away from home usage, trended December 2014 to April 2016
MARKET FACTORS 
US tea imports has steady rise
Figure 22: U.S. imports of tea and mate, 2010 to 2014
iGeneration, Millennial populations have positive growth
Figure 23: Population by generation, percentage change, 2011-21
Hispanic, Asian populations expect to see growth
Figure 24: Population by race and Hispanic origin, percent change, 2011-21
Overlap between Millennials, acculturated Hispanics, and parents
Millennials as parents
Figure 25: Households with own children, by age of householder, 2013
Hispanics as parents
Figure 26: Households with own children, by Hispanic origin of householder, 2013
Hispanics as Millennials
Figure 27: Generations, by Hispanic origin, 2016
KEY PLAYERS – WHAT YOU NEED TO KNOW 
Leading companies experience MULO growth thanks to RTD teas
RTD canned/bottled tea remains category segment leader
Leading bagged tea brands struggle, affect overall segment sales growth
Functionality, cold brews leading innovation opportunities
COMPANY AND BRAND SALES OF TEA AND RTD TEA
Leading companies experience MULO growth thanks to RTD teas
Figure 28: MULO sales of tea, by leading companies, rolling 52 weeks 2015 and 2016
Company and brand sales of tea and RTD tea
Figure 29: MULO sales of tea, by leading companies, rolling 52 weeks 2015 and 2016
WHAT’S WORKING?
RTD canned/bottled tea remains category segment leader
RTD refrigerated popularity continues to produce positive sales gains
Kombucha continues to thrive
English, herbal, and specialty bagged tea brands see growth
WHAT’S STRUGGLING?
Leading bagged tea brands struggle, affect overall segment sales growth
Figure 30: MULO sales of bagged/loose leaf tea, by leading companies and brands, rolling 52 weeks 2015 and 2016
Keurig single-cup teas experience hefty sales losses
Figure 31: Total US retail sales and forecast Keurig cups, at current prices, 2011-21
WHAT’S NEXT?
Functionality for all needs and occasions
Packaging updates for RTD and brewed teas
Matcha mania
Brewed teas rebrand, redesign bagged/loose leaf offerings
Premiumization hits in the form of flavors, tea house style drinks
Preparation methods hit on current trends, consumer interaction
RTD teas expand past black, white, and green tea varieties
THE CONSUMER – WHAT YOU NEED TO KNOW 
Older Millennials consume greatest variety of teas
76% drink bagged/loose leaf tea
Green tea leading brewed tea type
Sugar, lemon, honey leading brewed tea additions
One third believe in brewed teas’ long term, therapeutic health benefits
Brand more important than natural, organic claims
More than a quarter finds premium brewed teas worth the price
More than a third of consumers drink RTD tea at least weekly
Health benefits most important in RTD tea innovation
Antioxidants leading functionality
Bagged tea for relaxation, RTD tea for hydration
MULTIPLE TEA CONSUMPTION
Older Millennials consume greatest variety teas
Figure 32: Repertoire analysis – Any RTD tea consumption, June 2016
Figure 33: Repertoire analysis – Any bagged/loose leaf tea consumption, June 2016
BREWED TEA CONSUMPTION 
76% drink bagged/loose leaf tea
Figure 34: Tea consumption – Bagged/loose leaf tea, June 2016
Older Millennials heaviest consumers
Figure 35: Tea consumption – Bagged/loose leaf tea, by generation, June 2016
Consumption increases among fathers
Figure 36: Tea consumption – Bagged/loose leaf tea, by parental status with/without children under 18 in the household, June 2016
Hispanics, Asians over index for bagged/loose leaf/single cup tea
Figure 37: Tea consumption – Bagged/loose leaf tea, by race/ethnicity, June 2016
Income influences consumption, premiumization
Figure 38: Tea consumption – Bagged/loose leaf tea, by income, June 2016
BREWED TEA TYPES AND ATTRIBUTES
Green tea leading tea type
Figure 39: Brewed tea types/attributes, June 2016
Consumers drink multiple brewed tea types
Figure 40: Brewed tea types, by brewed tea types, June 2016
Figure 41: Brewed tea attributes, by brewed tea attributes, June 2016
Women over index for majority of tea types
Figure 42: Brewed tea types/attributes, by gender, June 2016
Older Millennials drive white, Roobios, mate tea consumption
Figure 43: Brewed tea types/attributes, by generation, June 2016
Medicinal teas leading bagged/loose leaf type at natural channels
Figure 44: Natural supermarket sales of bagged/loose tea, by type, at current prices, rolling 52 weeks ending April 2016
BREWED-TEA ADDITIONS
Sugar, lemon, honey leading tea additions
Figure 45: Brewed tea additions, June 2016
Consumers add in multiple additions
Figure 46: Brewed tea additions, by brewed tea additions, June 2016
Figure 47: Brewed tea additions, by brewed tea additions, June 2016
Baby Boomers, women, Asians most likely to drink plain
Figure 48: Brewed tea additions – “I drink it plain”, June 2016
Blacks, Hispanics over index for leading add-ins
Figure 49: Brewed tea additions, by race, June 2016
ATTITUDES TOWARD BREWED TEA 
One third believe in teas’ long term, therapeutic health benefits
Figure 50: Attitudes toward brewed tea – Health, June 2016
Brand more important than natural, organic claims
Figure 51: Attitudes toward brewed tea – Brand and claims, June 2016
More than a quarter find premium teas worth the price
Figure 52: Attitudes toward brewed tea – Packaging and attributes, June 2016
RTD TEA CONSUMPTION 
More than a third of consumers drink RTD tea at least weekly
Figure 53: Tea consumption – Ready-to-drink (RTD) tea, June 2016
Older Millennials and younger leading RTD tea consumers
Figure 54: Tea consumption – Ready-to-drink (RTD) tea, by generation, June 2016
Fathers heaviest RTD tea consumers
Figure 55: Tea consumption – Ready-to-drink (RTD) tea, by parental status with/without children under 18 in the household, June 2016
Hispanics drive RTD tea consumption
Figure 56: Tea consumption – Ready-to-drink (RTD) tea, by race/ethnicity, June 2016
RTD TEA INNOVATION
Health benefits most important in RTD tea innovation
Figure 57: Ready-to-drink tea innovation, June 2016
Interest in RTD functionality declines with age
Figure 58: Ready-to-drink tea innovation, by generation, June 2016
Fathers drive interest in RTD tea innovation
Figure 59: Ready-to-drink tea innovation, by parental status with child(ren) under 18 in the household, June 2016
TEA FUNCTIONALITY 
Antioxidants leading functionality
Figure 60: Tea functionality, June 2016
iGeneration drives interest in functional attributes
Figure 61: Tea functionality, by generation, June 2016
DRINKING OCCASIONS
Bagged tea for relaxation, RTD tea for hydration
Brewed teas
RTD teas
Figure 62: Tea drinking occasion, June 2016
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Abbreviations and terms
Abbreviations
Terms
APPENDIX – MARKET 
Figure 63: Total US retail sales and forecast of canned/bottled tea, at current prices, 2011-21
Figure 64: Total US retail sales and forecast of canned/bottled tea, at inflation-adjusted prices, 2011-21, 2011-21
Figure 65: Total US retail sales and forecast of refrigerated tea, at current prices, 2011-21
Figure 66: Total US retail sales and forecast of refrigerated tea, at inflation-adjusted prices, 2011-21
Figure 67: Total US retail sales and forecast of bagged/loose leaf tea, at current prices, 2011-21
Figure 68: Total US retail sales and forecast of bagged/loose leaf tea, at inflation-adjusted prices, 2011-21
Figure 69: US supermarket sales of tea and RTD tea, at current prices, 2011-16
Figure 70: US convenience store sales of tea and RTD tea, at current prices, 2011-16
Figure 71: US sales of tea and RTD tea through other retail channels, at current prices, 2011-16
APPENDIX – KEY PLAYERS 
Figure 72: MULO sales of canned and bottled tea by leading companies and brands, rolling 52 weeks 2015 and 2016
Figure 73: MULO sales of refrigerated tea, by leading companies and brands, rolling 52 weeks 2015 and 2016
Figure 74: MULO sales of bagged/loose leaf tea, by leading companies and brands, rolling 52 weeks 2015 and 2016

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