RTD Coffee, Tea Create a Buzz
By SARAH THEODORE
The trendiest drinks in
the beverage industry today are some of its oldest flavors — coffee
and tea. Iced tea sales grew 10 percent through supermarket, drug store and
mass merchandise channels last year, according to Information Resources
Inc. And after years of trying to get off the ground, iced coffee is a
bona-fide category, with 16 percent category growth in 2004, and sales
increases for each of the Top 10 brands.
With the No. 1 spot in the category, Ferolito
Vultaggio & Sons’ Arizona brand is the king of the ready-to-drink
tea segment, boasting nearly 45 percent growth last year. Vice President of
Communications Francie Patton attributes the growth to an aggressive sales
effort, as well as a strong performance from its green tea line-up and
Splenda-sweetened diet varieties.
Snapple and Diet Snapple also made a strong showing
last year, with diets growing nearly 10 percent. Category newcomer Ocean
Spray made it into the Top 10 brands with Ocean Spray Juice & Tea,
after less than a year on the market. With two varieties — White
Cranberry Peach and Wildberry — the blended products were a departure
for the traditional juice company and brought in $13.6 million in sales
through the measured channels.
Top brands — ready-to-drink tea | ||||
Brand | DOLLAR SALES | % change vs.prior year | Market Share | % change vs.prior year |
ARIZONA | $147,230,576 | 44.8% | 23.3 | 5.6 |
SNAPPLE | $91,347,968 | 5.3% | 14.5 | -0.7 |
LIPTON BRISK TEA | $85,062,360 | -11.3% | 13.5 | -3.3 |
DIET SNAPPLE | $76,354,064 | 9.9% | 12.1 | -0.0 |
NESTEA COOL | $63,125,044 | -10.4% | 10.0 | -2.3 |
LIPTON ICED TEA | $40,286,152 | -0.7% | 6.4 | -0.7 |
PRIVATE LABEL | $23,632,238 | 23.9% | 3.7 | 0.4 |
LIPTON | $17,812,218 | 19.1% | 2.8 | 0.2 |
NESTEA | $17,091,098 | 7.2% | 2.7 | -0.1 |
OCEAN SPRAY | ||||
JUICE AND TEA | $13,641,007 | NA | 2.2 | NA |
CATEGORY TOTAL | $631,352,512 | 10.1% | 100.0 | 0.0 |
Source: Information Resources Inc. Total Food, drug and mass merchandise (excluding Wal-Mart) for the 52 weeks ending Dec. 26, 2004. |
Top brands — ready-to-drink coffee/cappuccino | ||||
Brand | DOLLAR SALES |
% change vs.prior year | MarketShare | % change vs.prior year |
FRAPPUCCINO | $131,031,328 | 15.4% | 86.4 | -0.5 |
DOUBLESHOT | $16,975,702 | 27.8% | 11.2 | 1.0 |
KAHLUA | $785,378 | 53.2% | 0.5 | 0.1 |
WOLFGANG PUCK | $767,079 | 1,064.7% | 0.5 | 0.5 |
STARBUCKS | $684,171 | NA | 0.5 | NA |
HAVANA | $444,640 | 5.6% | 0.3 | -0.0 |
ROYAL KONA | $242,108 | 572.2% | 0.2 | 0.1 |
CAFFE D VITA | $182,287 | 356.6% | 0.1 | 0.1 |
CATEGORY TOTAL | $151,689,744 | 16.0% | 100.0 | 0.0 |
Source: Information Resources Inc. Total Food, drug and mass merchandise (excluding Wal-Mart) for the 52 weeks ending Dec. 26, 2004. |
While all varieties of tea are popular right now,
white and green have captured the imagination of product developers.
Revolution Tea, Inko’s, Origins and Fuze all rolled out
ready-to-drink white teas last year. White tea is believed to have
naturally low caffeine levels and strong antioxidant properties. While
Origins went with a straight tea flavor, the rest chose fruit-flavor
infusions. Fuze chose one of the year’s most popular flavors for Diet
Pomegranate White Tea, Inko’s added Peach White Tea to the line-up,
and Revolution introduced its line in Key Lime, Raspberry, Blackberry and
Tangerine varieties.
Skae Beverage International chose both white and green
tea for its New Leaf teas in White Tea Grapefruit, White Tea Honeydew
Melon, White Tea Ginseng & Honey; and Green Tea Ginseng and Green Tea
Plum products. The company greeted 2005 with sleek, new 16.9-ounce glass
packaging.
Tradewinds Beverage Co. took green to the extreme with
its Greenergy Double Brew green teas. The line is part tea, part energy
drink and boasts higher levels of caffeine and a stronger tea flavor than
other ready-to-drink products. Available in flavors such as Pomegranate,
Concord Grape, Cranberry and Blueberry, each variety also contains 10 to 20
percent juice.
Coffee craze
When most people think coffee these days, they think Starbucks, and RTD coffees are no
exception. Frappuccino, produced by the Pepsi/Starbucks joint venture, is
the category’s runaway bestseller, with more than 86 percent market
share. And the team’s DoubleShot follows, with more than 11 percent.
That leaves each of the
other products in the category with less than 1 percent share each in the
measured channels, but they are making the most of it. Ferolito
Vultaggio’s Kahlua posted more than 53 percent sales gains last year,
according to IRI.
“Coffee is one of
the most broadly accepted flavor profiles in the beverage industry,”
Patton says, explaining the invigoration of the coffee category.
“There is a huge maturing baby boom generation
that has increasingly sophisticated tastes,” adds John Imbesi
president of North American Beverage, maker of Havana iced coffees.
“These mature tastes have led to the explosion of the gourmet hot
coffee segment, that in turn has created the demand for the convenience of
RTD coffee.”
Havana enjoyed 5.6 percent growth through IRI’s
measured channels, and Imbesi says last year’s low-carb entries have
maintained growth, despite a shakeout in the low-carb market.
Energy Brands, maker of Glaceau Vitaminwater, is
hoping to be as much of an innovator in the coffee market as it was for
flavored waters. It has a new offering in America’s Best Brew, a
canned coffee product.
Carol Dollard, chief operating officer at Energy
Brands, describes America’s Best as “refreshing and drinkable,
rather than heavy and dessert-like.”
The product features shrinkwrapped 16-ounce cans with
retro-inspired photographic labels. “The brand and the cans are
bringing personality to the category,” Dollard says. “The four
characters are representative of the time when coffee was coffee. They
bring the product to life.”
RTD coffee is still a small market — the
category’s $152 million is only slightly higher than sales of
Arizona’s tea brands alone — but it is becoming more
mainstream, and perhaps the best proof is the rumored rollout of The
Coca-Cola Co.’s Blak. The product is said to be a coffee-flavored
carbonated beverage, and packaging possibilities include an aluminum
bottle. The company dropped its previous Planet Java ready-to-drink coffee
offering, but has the new concept in test market.
BI