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Tea and Coffee Ground for Success
Iced tea sales grew nearly 13 percent through supermarket, drug store and mass merchandise channels during the year ending in June, according to Information Resources Inc. After years of trying to get off the ground, iced coffee is a bona-fide category, with more than 20 percent category growth this past year.
With the No. 1 spot in the category, Ferolito Vultaggio
& Sons’ Arizona brand is the king of the ready-to-drink tea
segment, boasting 48 percent growth during the same time period. The
company 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.
Global hot drink sales (millionS of dollars) | |||
Subsector | 2004 | Forecast 2005 |
|
Coffee | $36,170.7 | $37,195.3 | |
Fresh coffee | $21,533.6 | $21,889.5 | |
Instant coffee | $14,637.1 | $15,305.8 | |
Tea | $19,804.1 | $20,376.3 | |
Black standard tea | $8,011.9 | $8,114.2 | |
Black specialty tea | $3,165.2 | $3,279.9 | |
Green tea | $4,470.3 | $4,624.7 | |
Fruit/herbal tea | $3,387.1 | $3,559.7 | |
Instant tea | $215.3 | $212.8 | |
Other tea | $554.4 | $585.0 | |
Other hot drinks | $8,600.6 | $9,012.4 | |
Flavored powderED drinks | $5,522.6 | $5,709.4 | |
Other plant-based hot drinks | $3,078.1 | $3,303.0 | |
Total | $64,575.4 | $66,584.0 | |
Source: Euromonitor International, 2005 |
Cadbury Schweppes’ Snapple and Diet Snapple also
made a strong showing, with diets growing 12 percent during the year ending
in June. Category newcomer Ocean Spray made it into the Top 10 brands with
Ocean Spray Juice & Tea. The blended products were a departure for the
traditional juice company and brought in $15.1 million in sales through the
measured channels.
While all varieties of tea are popular right now, white
and green teas have captured the imagination of product developers.
Arizona, Revolution Tea, Inko’s, Origins and Fuze all rolled out
ready-to-drink white teas. 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. Arizona added Blueberry White Tea, the company’s first
white tea, along with Pomegranate Green Tea.
Top canned and bottled teas by brand | ||||
Brand | Dollar Sales |
% Change Vs. Prior Year | Market Share | % Change Vs. Prior Year |
Arizona | $175,103,900 | 48.1 | 26.0 | 6.2 |
Snapple | $93,866,170 | 5.1 | 13.9 | -1.0 |
Diet Snapple | $82,107,950 | 12.0 | 12.2 | -0.1 |
Lipton Brisk | $81,161,820 | -11.8 | 12.0 | -3.4 |
Nestea Cool | $64,248,210 | -8.7 | 9.5 | -2.2 |
Lipton Iced Tea | $40,496,500 | -0.5 | 6.0 | -0.8 |
Private Label | $25,327,490 | 18.9 | 3.8 | 0.2 |
Lipton | $25,010,770 | 55.6 | 3.7 | 1.0 |
Ocean Spray Juice and Tea | $15,135,860 | 408.0 | 2.2 | 1.7 |
Sobe | $13,174,110 | 9.1 | 2.0 | -0.1 |
Category Total | $674,177,900 | 12.8 | ||
Source: Information Resources Inc., Total food, drug and mass merchandise (excluding Wal-Mart) for the 52 weeks ending June 12, 2005 |
Even though Nestea Cool sales were down 8.7 percent for
the year ending in June, Nestea, a brand of The Coca-Cola Co. and
Nestlé joint venture, hopes to pick things up by adding Nestea Ice
to the family. The new product delivers a cooling sensation in Lime Iced
Tea and Lemon Green Tea flavors. In addition, Nestea released Diet Nestea,
a new calorie-free tea with Splenda. Formerly named Diet Nestea Cool, the
tea has been reformulated and rebranded.
Also partaking in a reformulation, the Pepsi-Lipton Tea
Partnership has revamped Lipton Original Iced Tea and added new Lipton Iced
Tea to the line. Lipton Original has been reengineered to be lower in sugar
– about 10 to 12 percent lower than the original formula. The
Original line, which is packaged in 16-ounce glass, also includes a new
Diet Sweet flavor in addition to Sweetened, Unsweetened, Lemon, Extra
Sweet, Raspberry, Green Tea with Honey, Diet Lemon and Peach.
The company says new Lipton Iced Tea, which is packaged
in 20-ounce, 1.5-liter and 2-liter PET, was created for the “popular
tea segment,” and is available in Lemon, Diet with Lemon, Green Tea
with Citrus and Diet Green Tea with Citrus varieties. The lower priced
Lipton Brisk line remains unchanged.
RTD coffee is still a small market – the
category’s $168.7 million is still lower than sales of
Arizona’s tea brands alone – but it is becoming more
mainstream. Frappuccino, produced by the
Pepsi/Starbucks joint venture, is the category’s runaway bestseller,
with almost 85 percent market share. And the team’s Doubleshot
follows, with 12 percent. That leaves each of the other products in the
category with 1 percent share or less in the measured channels. BI
Global coffee and tea sales (millionS of dollars) | |||
Subsector | 2004 | Forecast 2005 |
|
RTD tea | $28,949.1 | $30,713.6 | |
Still RTD tea | $28,451.8 | $30,192.7 | |
Carbonated RTD tea | $497.3 | $520.9 | |
RTD coffee | $12,271.7 | $12,509.1 | |
Source: Euromonitor International, 2005 |
Top ready-to-drink coffees by brand | ||||
Brand | Dollar Sales |
% Change Vs. Prior Year |
Market Share |
% Change Vs. Prior Year |
Frappuccino | $142,576,400 | 17.2 | 84.5 | -2.3 |
Doubleshot | $20,287,480 | 40.8 | 12.0 | 1.7 |
Wolfgang Puck | $2,319,356 | 1,648.6 | 1.4 | 1.3 |
Starbucks | $1,180,923 | 35.1 | 0.7 | 0.1 |
Kahlua | $799,781 | 2.2 | 0.5 | -0.1 |
Havana | $478,873 | 15.6 | 0.3 | -0.0 |
Royal Kona | $310,134 | 374.8 | 0.2 | 0.1 |
Caffe D Vita | $193,023 | 34.7 | 0.1 | 0.0 |
Main St. Café | $141,966 | -14.6 | 0.1 | -0.0 |
Mr. Brown | $97,249 | -28.3 | 0.1 | -0.0 |
Category Total | $168,660,880 | 20.4 | ||
Source: Information Resources Inc., Total food, drug and mass merchandise (excluding Wal-Mart) for the 52 weeks ending June 12, 2005 |