Tea and Coffee

Tea tastes get refined

Tea Single Serve Containers

Tea continued to capitalize on a positive year in both the bagged and loose leaf tea segment as well as the ready-to-drink (RTD) segment. RTD showed the most growth at 8.5 percent for more than $2.3 billion in sales, according to SymphonyIRI Group, Chicago, for the 52 weeks ending May 15 in U.S. supermarkets, drug stores, gas and convenience stores and mass merchandise outlets, excluding Wal-Mart. Bagged and loose leaf tea sales experienced a 1.8 percent increase for more than $782.5 million, the market research firm’s data states.

Health claims, such as organic, remained a popular positioning for new bagged and loose leaf tea as well as RTD products launched in 2010. Of the 1,966 new bagged and loose leaf tea products launched in the United States in 2010, 20.9 percent carried an organic claim, according to Innova Market Insights, Duiven, The Netherlands. For RTD teas, of the 157 new products in the United States last year, 43.3 percent were labeled as organic, the market research firm reports.

With increased exposure of organic claims, large beverage companies continued to increase their positions in the market. This year, The Coca-Cola Co., Atlanta, purchased organic tea producer Honest Tea, Bethesda, Md. Honest Tea’s sales increased 58 percent for $22.8 million in sales, SymphonyIRI data states.

“I think the reason that Coke invested is we’re really at the center where a lot of the trends are with healthier products toward environmentally friendly products,” said Seth Goldman, co-founder, president and TeaEO of Honest Tea to Beverage Industry in June. “So we expect to continue to grow aggressively in the years ahead.”

Nestlé Waters North America, Stamford Ct., announced the purchase of Sweet Leaf Tea Co., Austin, Texas, earlier this year as well. The Sweet Leaf Tea Co.’s brands include organic RTD tea in the Sweet Leaf Tea brand and Tradewinds Tea, which are positioned as natural RTD teas. Both brands posted positive sales numbers with Sweet Leaf at a 71.9 percent increase for $18.3 million in sales and Tradewinds with 14.9 percent growth for more than $12.6 million in sales.

“Both of our brands are still very small and with the support of Nestlé Waters North America we hope to dramatically increase our distribution so that fans of Sweet Leaf and Tradewinds Tea can find a bottle wherever they shop,” said Charla Adams, Sweet Leaf Tea Co. brand marketing manager to Beverage Industry in June.

Another health claim with teas was natural or all-natural. Earlier this year, Lipton released its RTD 100 percent Natural Lipton Iced Teas, which are made with real sugar and natural flavors, it says.

Crystal Geyser Water Co., Calistoga, Calif., also released an all-natural line in select markets with California Teas. Part of that natural positioning is using pure cane sugar to sweeten its teas, Crystal Geyser says. The company says it learned from consumer feedback that bottled teas in the market were perceived as too sweet, contained artificial sweeteners and did not taste natural.

Following suit with last year’s sales trends, Lipton Brisk, Arizona Arnold Palmer and The Coca-Cola Co.’s Gold Peak were the largest gainers in the Top 10 RTD brands with 47.8 percent, 59.4 percent and 28.9 percent sales growth, respectively, according to SymphonyIRI. Arizona Iced Tea remains the No. 1 selling RTD tea as sales remained relatively flat, but saw its market share decrease 2.1 percent.

In bagged tea, the No. 1 selling hot tea brand, Lipton, experienced a decrease in sales. However, growth in the bagged and loose tea segment benefited from brands such as Tazo Tea, a brand of Seattle-based Starbucks, Yogi Tea and Celestial Seasonings, which posted 11.5 percent, 8.1 percent and 7.8 percent increases in sales, respectively, SymphonyIRI data states.

The category segment continued to see releases of products that maintain a premium positioning as well as health positionings. Bigelow Tea Co., Fairfield, Conn., released products that combine tea with the health benefits of antioxidant-containing fruits, such as Black Tea with Pomegranate, Decaffeinated Green Tea with Pomegranate, and Decaffeinated Green Tea with Wild Blueberry and Acai. Bigelow also showed positive sales numbers with a 3.8 percent increase for more than $89.3 million in sales, according to SymphonyIRI.

Instant tea mixes had a down year as the category segment had a 5.7 percent decrease in measured channels, according to SymphonyIRI data.

Also part of the single-serve market, Green Mountain Coffee Roasters Inc. (GMCR), Waterbury, Vt., announced a strategic relationship for the manufacturing, marketing, distribution and sale of Tazo branded K-Cup portion packs for use in GMCR’s Keurig Single-Cup brewing system. Last year, GMCR released Celestial Seasonings Honey Lemon Ginseng Green Tea in paper-based K-Cup format. The paper-based solution is designed to reduce GMCR’s use of non-renewable materials, the company says. BI

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