A Study on Tea Industry in the United States US
Headlines
·
Tea grew by 1% in total volume
terms and recorded total volume sales of 64,400 tonnes during 2008
·
Increasing consumer health
awareness fuelled sales of specialty white, green, and red teas during 2008
·
Other tea was the fastest
growing category in 2008, with respective off-trade volume and value growth of
38% and 31% during 2008
·
Average unit prices grew by 2%
in 2008 due to increasing demand for premium brands
·
Unilever led sales in 2008,
with a retail value share of 22%, and was followed by Hain Celestial Group and
RC Bigelow
·
Tea has a projected forecast
period total volume CAGR of 1%
Trends
·
Although the natural health
benefits of tea continue to attract US consumers, America remains a nation of
coffee drinkers. ECCG, antioxidants, and catechins are all components found
naturally within teas and consumers are becoming more educated about the
potential health benefits of such ingredients. A steady stream of new green,
white, and red tea launches has helped to draw more attention to the health
properties of tea and fuel consumer demand.
·
Although well-established
standard brands like Lipton continued to lead sales in 2008, demand for
higher-priced premium teas continues to increase. Red and white teas, typically
single sourced, command the highest prices and often cost several times more
than standard black teas. Packaging innovations like Lipton’s Pyramid Tea Bags,
offering full leaf tea brewing, have also resulted in higher overall unit
prices. As a result, off-trade value
sales grew at a faster rate than volume sales during 2008.
·
Other tea, which comprises
white and rooibos teas, was the fastest growing category in 2008, with
respective retail volume and value growth of 38% and 31%. Although, the small
initial sales base of the category must be considered, the dynamic nature of
other tea is highlighted by the fact that it is host to a large proportion of
new product launches. White and red teas are also increasingly found in
mainstream distribution outlets like supermarkets/hypermarkets, whereas before
the availability of such products was limited to health food stores and
specialty tea shops. Although such teas have been available for decades in the
US, it was only in recent years that they became widely popular due to rising
consumer health awareness. White teas have a lighter flavour than green teas
and a higher antioxidant content than black teas, making them attractive to
consumers despite their higher price.
·
Total tea unit prices grew by
2% in 2008 as a result of increased demand for premium teas. Although higher
priced teas comprised only a small proportion of overall tea sales in 2008,
they continue to expand in variety and availability as consumers look for
healthier alternatives to standard black teas. Tea pods, loose leaf teas, and
pyramid tea bags are all examples of format innovations launched in recent
years that carry higher price points and have also helped to drive value
growth.
·
Many US consumers do not like
the taste of bitter tea and instead prefer milder herbal flavours or tea mixes
with fruit flavourings. Hibiscus and chamomile were the most common herbal tea
flavours in 2008. Many new product launches from 2006-2008 included teas
blended with antioxidant-rich superfruits like acai, pomegranate, and
blueberry. Americans already know these flavours from fruit/vegetable juices
and the added antioxidants serve as an even more compelling reason for
consumers to try new green, white, and red teas, as well as giving them added
flavour to counteract the relatively bland flavour of green and white
teas.
·
Standard and specialty loose
teas accounted for 16% of off-trade black tea value sales in 2008 – a slight
increase upon 2007. The loose tea format is also common within green,
fruit/herbal, and other tea. Loose teas are generally recognized as being
higher in quality and are offered by most major manufacturers. Due to longer
brewing times, demand is limited to more patient tea drinkers. Such teas are
often purchased from tea specialist outlets or directly from producers via the
internet. In addition, some standard loose teas can also be found on
supermarket/hypermarket shelves.
Competitive Landscape
·
Unilever continued to lead US
tea sales in 2008, with a retail value share of 22%. The company’s Lipton brand
is the top selling tea in the country and is well established in the
marketplace. The fact that Unilever is the world’s second largest consumer
goods manufacturer means that it enjoys greater distribution and bargaining
power with retailers than its competitors and its Lipton brand is available in
the vast majority of supermarkets/hypermarkets, convenience stores, and
discounters in the US. Although the Lipton brand is still primarily known for
its range of flagship black teas, towards the end of the review period, a
number of specialty green and white teas were also introduced.
·
Hain Celestial was the second
leading tea manufacturer in 2008, with a 17% off-trade value share. Despite
specialising in specialty green and fruit/herbal teas, the company has a
widespread distribution network.
Celestial Seasonings is the most popular fruit/herbal and green tea
brand in the US and has long been known for its health and wellness properties.
·
This focus on health and
wellness has been a key feature of new product launches in the review
period. The availability of naturally
healthy green and white teas, often mixed with fruit flavours, increased
significantly during the review period and organic teas, such as RC Bigelow’s
Bigelow Organic range, are also now commonly seen on supermarket shelves. Teas
with added functional benefits, such as herbal components for digestive health,
energy, skin care, and menopause symptoms, are also becoming increasingly
popular.
·
Several new product innovations
focus on delivery systems rather than the tea itself. For example, tea pod
brands such as Twinings T-Discs, Lipton Premium Tea Pods, and Twinings K-Cups
which are designed for use with Keurig and Tassimo pod machines continue to
increase in popularity. These kinds of extensions have helped generate a steady
level of interest in home single serve pod systems, even though their overall
popularity seems to have peaked around 2005-2006. The use of larger tea bags,
such as Lipton’s Pyramid teas, offers consumers a greater level of tea quality
and the opportunity for richer flavour combinations through the use of fruit
pieces and spices. These kinds of innovations are expected to become
increasingly important to manufacturers as they look for strategies to increase
sales through existing brands without launching entirely new product lines.
Prospects
·
Tea has plenty of room for
further growth due to its relatively low market penetration when compared with
coffee and its favourable health qualities. Off-trade value and volume sales
are expected to increase by a total of 13% and 5% respectively over the
forecast period. This discrepancy between value and volume growth can be
attributed to increasing demand for higher priced white, green, and red teas.
However, despite the increasing popularity of such teas, the number of new product
launches is expected to gradually slow as the category becomes saturated.
·
On-trade outlets will help to
fuel tea growth over the forecast period as an increasing number of consumers
shift away from coffee. Foodservice outlets are expected to extend their tea
ranges and specialist coffee chains will continue to lead the way with regard
to trying out new flavour combinations. For example, Starbucks expanded its
Tazo tea range to include Tazo Tea Lattes in late 2008. Lattes and chai drinks
which utilise milk and fruit flavours are more palatable to US consumers and
have helped to develop overall tea sales.
·
Other tea, which includes white
and rooibos teas, is expected to be the fastest growing category over the
forecast period, due to increasing consumer health awareness. The fact that
such teas are also typically combined with fruit flavours has also helped to
increase their popularity. In addition, the high unit prices of such products
should attract significant interest from manufacturers over the forecast
period.
·
After enjoying rapid growth
during the review period (27% retail volume growth), demand for green tea is
expected to decline gradually during the forecast period (15% projected retail
volume growth). Green teas were the first to be marketed on the basis of their
high antioxidant content and are now very common, with nearly all major tea
producers offering at least one green tea brand. Green tea will face increasing
competition from white and red teas, higher quality specialty black teas, and RTD
green teas over the forecast period. Functional health and
wellness teas should continue to increase their share of overall tea sales
during the forecast period. Tea/superfruit combinations are particularly
popular and offer double the antioxidant benefits of tea alone. As with green
tea, off-trade volume growth of fruit/herbal teas is also expected to slow
during the forecast period due to increasing competition from other tea
products. However, herbal wellness ·
teas are expected to remain
popular with consumers looking to trade up from traditional standard black
teas.
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Tea in the US
Headlines
·
Tea grew by 1% in total volume
terms and recorded total volume sales of 64,400 tonnes during 2008
·
Increasing consumer health
awareness fuelled sales of specialty white, green, and red teas during 2008
·
Other tea was the fastest
growing category in 2008, with respective off-trade volume and value growth of
38% and 31% during 2008
·
Average unit prices grew by 2%
in 2008 due to increasing demand for premium brands
·
Unilever led sales in 2008,
with a retail value share of 22%, and was followed by Hain Celestial Group and
RC Bigelow
·
Tea has a projected forecast
period total volume CAGR of 1%
Trends
·
Although the natural health
benefits of tea continue to attract US consumers, America remains a nation of
coffee drinkers. ECCG, antioxidants, and catechins are all components found
naturally within teas and consumers are becoming more educated about the
potential health benefits of such ingredients. A steady stream of new green,
white, and red tea launches has helped to draw more attention to the health
properties of tea and fuel consumer demand.
·
Although well-established
standard brands like Lipton continued to lead sales in 2008, demand for
higher-priced premium teas continues to increase. Red and white teas, typically
single sourced, command the highest prices and often cost several times more
than standard black teas. Packaging innovations like Lipton’s Pyramid Tea Bags,
offering full leaf tea brewing, have also resulted in higher overall unit
prices. As a result, off-trade value
sales grew at a faster rate than volume sales during 2008.
·
Other tea, which comprises
white and rooibos teas, was the fastest growing category in 2008, with
respective retail volume and value growth of 38% and 31%. Although, the small
initial sales base of the category must be considered, the dynamic nature of
other tea is highlighted by the fact that it is host to a large proportion of
new product launches. White and red teas are also increasingly found in
mainstream distribution outlets like supermarkets/hypermarkets, whereas before
the availability of such products was limited to health food stores and
specialty tea shops. Although such teas have been available for decades in the
US, it was only in recent years that they became widely popular due to rising
consumer health awareness. White teas have a lighter flavour than green teas
and a higher antioxidant content than black teas, making them attractive to
consumers despite their higher price.
·
Total tea unit prices grew by
2% in 2008 as a result of increased demand for premium teas. Although higher
priced teas comprised only a small proportion of overall tea sales in 2008,
they continue to expand in variety and availability as consumers look for
healthier alternatives to standard black teas. Tea pods, loose leaf teas, and
pyramid tea bags are all examples of format innovations launched in recent
years that carry higher price points and have also helped to drive value
growth.
·
Many US consumers do not like
the taste of bitter tea and instead prefer milder herbal flavours or tea mixes
with fruit flavourings. Hibiscus and chamomile were the most common herbal tea
flavours in 2008. Many new product launches from 2006-2008 included teas
blended with antioxidant-rich superfruits like acai, pomegranate, and
blueberry. Americans already know these flavours from fruit/vegetable juices
and the added antioxidants serve as an even more compelling reason for
consumers to try new green, white, and red teas, as well as giving them added
flavour to counteract the relatively bland flavour of green and white
teas.
·
Standard and specialty loose
teas accounted for 16% of off-trade black tea value sales in 2008 – a slight
increase upon 2007. The loose tea format is also common within green,
fruit/herbal, and other tea. Loose teas are generally recognized as being
higher in quality and are offered by most major manufacturers. Due to longer
brewing times, demand is limited to more patient tea drinkers. Such teas are
often purchased from tea specialist outlets or directly from producers via the
internet. In addition, some standard loose teas can also be found on
supermarket/hypermarket shelves.
Competitive Landscape
·
Unilever continued to lead US
tea sales in 2008, with a retail value share of 22%. The company’s Lipton brand
is the top selling tea in the country and is well established in the
marketplace. The fact that Unilever is the world’s second largest consumer
goods manufacturer means that it enjoys greater distribution and bargaining
power with retailers than its competitors and its Lipton brand is available in
the vast majority of supermarkets/hypermarkets, convenience stores, and
discounters in the US. Although the Lipton brand is still primarily known for
its range of flagship black teas, towards the end of the review period, a
number of specialty green and white teas were also introduced.
·
Hain Celestial was the second
leading tea manufacturer in 2008, with a 17% off-trade value share. Despite
specialising in specialty green and fruit/herbal teas, the company has a
widespread distribution network.
Celestial Seasonings is the most popular fruit/herbal and green tea
brand in the US and has long been known for its health and wellness properties.
·
This focus on health and
wellness has been a key feature of new product launches in the review
period. The availability of naturally
healthy green and white teas, often mixed with fruit flavours, increased
significantly during the review period and organic teas, such as RC Bigelow’s
Bigelow Organic range, are also now commonly seen on supermarket shelves. Teas
with added functional benefits, such as herbal components for digestive health,
energy, skin care, and menopause symptoms, are also becoming increasingly
popular.
·
Several new product innovations
focus on delivery systems rather than the tea itself. For example, tea pod
brands such as Twinings T-Discs, Lipton Premium Tea Pods, and Twinings K-Cups
which are designed for use with Keurig and Tassimo pod machines continue to
increase in popularity. These kinds of extensions have helped generate a steady
level of interest in home single serve pod systems, even though their overall
popularity seems to have peaked around 2005-2006. The use of larger tea bags,
such as Lipton’s Pyramid teas, offers consumers a greater level of tea quality
and the opportunity for richer flavour combinations through the use of fruit
pieces and spices. These kinds of innovations are expected to become
increasingly important to manufacturers as they look for strategies to increase
sales through existing brands without launching entirely new product lines.
Prospects
·
Tea has plenty of room for
further growth due to its relatively low market penetration when compared with
coffee and its favourable health qualities. Off-trade value and volume sales
are expected to increase by a total of 13% and 5% respectively over the
forecast period. This discrepancy between value and volume growth can be
attributed to increasing demand for higher priced white, green, and red teas.
However, despite the increasing popularity of such teas, the number of new product
launches is expected to gradually slow as the category becomes saturated.
·
On-trade outlets will help to
fuel tea growth over the forecast period as an increasing number of consumers
shift away from coffee. Foodservice outlets are expected to extend their tea
ranges and specialist coffee chains will continue to lead the way with regard
to trying out new flavour combinations. For example, Starbucks expanded its
Tazo tea range to include Tazo Tea Lattes in late 2008. Lattes and chai drinks
which utilise milk and fruit flavours are more palatable to US consumers and
have helped to develop overall tea sales.
·
Other tea, which includes white
and rooibos teas, is expected to be the fastest growing category over the
forecast period, due to increasing consumer health awareness. The fact that
such teas are also typically combined with fruit flavours has also helped to
increase their popularity. In addition, the high unit prices of such products
should attract significant interest from manufacturers over the forecast
period.
·
After enjoying rapid growth
during the review period (27% retail volume growth), demand for green tea is
expected to decline gradually during the forecast period (15% projected retail
volume growth). Green teas were the first to be marketed on the basis of their
high antioxidant content and are now very common, with nearly all major tea
producers offering at least one green tea brand. Green tea will face increasing
competition from white and red teas, higher quality specialty black teas, and RTD
green teas over the forecast period.
Functional health and
wellness teas should continue to increase their share of overall tea sales
during the forecast period. Tea/superfruit combinations are particularly
popular and offer double the antioxidant benefits of tea alone. As with green
tea, off-trade volume growth of fruit/herbal teas is also expected to slow
during the forecast period due to increasing competition from other tea
products. However, herbal wellness ·
teas are expected to remain
popular with consumers looking to trade up from traditional standard black
teas.
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Tea in the US
Headlines
·
Tea grew by 1% in total volume
terms and recorded total volume sales of 64,400 tonnes during 2008
·
Increasing consumer health
awareness fuelled sales of specialty white, green, and red teas during 2008
·
Other tea was the fastest
growing category in 2008, with respective off-trade volume and value growth of
38% and 31% during 2008
·
Average unit prices grew by 2%
in 2008 due to increasing demand for premium brands
·
Unilever led sales in 2008,
with a retail value share of 22%, and was followed by Hain Celestial Group and
RC Bigelow
·
Tea has a projected forecast
period total volume CAGR of 1%
Trends
·
Although the natural health
benefits of tea continue to attract US consumers, America remains a nation of
coffee drinkers. ECCG, antioxidants, and catechins are all components found
naturally within teas and consumers are becoming more educated about the
potential health benefits of such ingredients. A steady stream of new green,
white, and red tea launches has helped to draw more attention to the health
properties of tea and fuel consumer demand.
·
Although well-established
standard brands like Lipton continued to lead sales in 2008, demand for
higher-priced premium teas continues to increase. Red and white teas, typically
single sourced, command the highest prices and often cost several times more
than standard black teas. Packaging innovations like Lipton’s Pyramid Tea Bags,
offering full leaf tea brewing, have also resulted in higher overall unit
prices. As a result, off-trade value
sales grew at a faster rate than volume sales during 2008.
·
Other tea, which comprises
white and rooibos teas, was the fastest growing category in 2008, with
respective retail volume and value growth of 38% and 31%. Although, the small
initial sales base of the category must be considered, the dynamic nature of
other tea is highlighted by the fact that it is host to a large proportion of
new product launches. White and red teas are also increasingly found in
mainstream distribution outlets like supermarkets/hypermarkets, whereas before
the availability of such products was limited to health food stores and
specialty tea shops. Although such teas have been available for decades in the
US, it was only in recent years that they became widely popular due to rising
consumer health awareness. White teas have a lighter flavour than green teas
and a higher antioxidant content than black teas, making them attractive to
consumers despite their higher price.
·
Total tea unit prices grew by
2% in 2008 as a result of increased demand for premium teas. Although higher
priced teas comprised only a small proportion of overall tea sales in 2008,
they continue to expand in variety and availability as consumers look for
healthier alternatives to standard black teas. Tea pods, loose leaf teas, and
pyramid tea bags are all examples of format innovations launched in recent
years that carry higher price points and have also helped to drive value
growth.
·
Many US consumers do not like
the taste of bitter tea and instead prefer milder herbal flavours or tea mixes
with fruit flavourings. Hibiscus and chamomile were the most common herbal tea
flavours in 2008. Many new product launches from 2006-2008 included teas
blended with antioxidant-rich superfruits like acai, pomegranate, and
blueberry. Americans already know these flavours from fruit/vegetable juices
and the added antioxidants serve as an even more compelling reason for
consumers to try new green, white, and red teas, as well as giving them added
flavour to counteract the relatively bland flavour of green and white
teas.
·
Standard and specialty loose
teas accounted for 16% of off-trade black tea value sales in 2008 – a slight
increase upon 2007. The loose tea format is also common within green,
fruit/herbal, and other tea. Loose teas are generally recognized as being
higher in quality and are offered by most major manufacturers. Due to longer
brewing times, demand is limited to more patient tea drinkers. Such teas are
often purchased from tea specialist outlets or directly from producers via the
internet. In addition, some standard loose teas can also be found on
supermarket/hypermarket shelves.
Competitive Landscape
·
Unilever continued to lead US
tea sales in 2008, with a retail value share of 22%. The company’s Lipton brand
is the top selling tea in the country and is well established in the
marketplace. The fact that Unilever is the world’s second largest consumer
goods manufacturer means that it enjoys greater distribution and bargaining
power with retailers than its competitors and its Lipton brand is available in
the vast majority of supermarkets/hypermarkets, convenience stores, and
discounters in the US. Although the Lipton brand is still primarily known for
its range of flagship black teas, towards the end of the review period, a
number of specialty green and white teas were also introduced.
·
Hain Celestial was the second
leading tea manufacturer in 2008, with a 17% off-trade value share. Despite
specialising in specialty green and fruit/herbal teas, the company has a
widespread distribution network.
Celestial Seasonings is the most popular fruit/herbal and green tea
brand in the US and has long been known for its health and wellness properties.
·
This focus on health and
wellness has been a key feature of new product launches in the review
period. The availability of naturally
healthy green and white teas, often mixed with fruit flavours, increased
significantly during the review period and organic teas, such as RC Bigelow’s
Bigelow Organic range, are also now commonly seen on supermarket shelves. Teas
with added functional benefits, such as herbal components for digestive health,
energy, skin care, and menopause symptoms, are also becoming increasingly
popular.
·
Several new product innovations
focus on delivery systems rather than the tea itself. For example, tea pod
brands such as Twinings T-Discs, Lipton Premium Tea Pods, and Twinings K-Cups
which are designed for use with Keurig and Tassimo pod machines continue to
increase in popularity. These kinds of extensions have helped generate a steady
level of interest in home single serve pod systems, even though their overall
popularity seems to have peaked around 2005-2006. The use of larger tea bags,
such as Lipton’s Pyramid teas, offers consumers a greater level of tea quality
and the opportunity for richer flavour combinations through the use of fruit
pieces and spices. These kinds of innovations are expected to become
increasingly important to manufacturers as they look for strategies to increase
sales through existing brands without launching entirely new product lines.
Prospects
·
Tea has plenty of room for
further growth due to its relatively low market penetration when compared with
coffee and its favourable health qualities. Off-trade value and volume sales
are expected to increase by a total of 13% and 5% respectively over the
forecast period. This discrepancy between value and volume growth can be
attributed to increasing demand for higher priced white, green, and red teas.
However, despite the increasing popularity of such teas, the number of new product
launches is expected to gradually slow as the category becomes saturated.
·
On-trade outlets will help to
fuel tea growth over the forecast period as an increasing number of consumers
shift away from coffee. Foodservice outlets are expected to extend their tea
ranges and specialist coffee chains will continue to lead the way with regard
to trying out new flavour combinations. For example, Starbucks expanded its
Tazo tea range to include Tazo Tea Lattes in late 2008. Lattes and chai drinks
which utilise milk and fruit flavours are more palatable to US consumers and
have helped to develop overall tea sales.
·
Other tea, which includes white
and rooibos teas, is expected to be the fastest growing category over the
forecast period, due to increasing consumer health awareness. The fact that
such teas are also typically combined with fruit flavours has also helped to
increase their popularity. In addition, the high unit prices of such products
should attract significant interest from manufacturers over the forecast
period.
·
After enjoying rapid growth
during the review period (27% retail volume growth), demand for green tea is
expected to decline gradually during the forecast period (15% projected retail
volume growth). Green teas were the first to be marketed on the basis of their
high antioxidant content and are now very common, with nearly all major tea
producers offering at least one green tea brand. Green tea will face increasing
competition from white and red teas, higher quality specialty black teas, and RTD
green teas over the forecast period.
If you want Industry Reports on Tea, contact Mahasagar Publications.
