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TEA AND RTD TEAS - US - AUGUST 2019

Published By :

Mintel

Published Date : Aug 2019

Category :

Non-Alcoholic Drinks

No. of Pages : N/A

The $8.7 billion tea market continues to grow at a slow rate driven by smaller RTD brands and trendy kombucha. Though tea faces stiff competition from other beverages, and RTDs are under scrutiny due to their sugar content, tea is well suited to address the needs of today’s consumers. Brands can complement tea’s natural health halo by developing products with strong functional benefits and that address new consumption occasions.

Table of contents

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY
Key takeaways
The issues
Brewed tea sales remain stubbornly flat
Figure 1: Total US retail sales and forecast of tea, by segment, at current prices, 2014-24
Kombucha is hot until it’s not
Figure 2: Reasons for drinking not drinking kombucha, May 2019
Sugar concerns weigh down RTD tea
Figure 3: RTD tea attitudes, by age and income, May 2019
The opportunities
Health and functionality are the future for RTD tea
Figure 4: Interest in tea benefits, May 2019
Tea drinkers are on the lookout for innovative drinks
Figure 5: Tea product interest, by generation, May 2019
Tea expands in the foodservice industry
Figure 6: Change in incidence of tea drinks on menus, Q1 2016 – Q1 2019
THE MARKET – WHAT YOU NEED TO KNOW
Incremental growth of tea market
Tea can emulate fast-growing beverages
Tea satisfies modern anxieties
MARKET SIZE AND FORECAST
Moderate projected growth for tea
Figure 7: Total US sales and fan chart forecast of tea, at current prices, 2014-24
Figure 8: Total US sales and fan chart forecast of tea, at current prices, 2014-24
MARKET BREAKDOWN
RTD tea lifts the market
Figure 9: Total US retail sales and forecast of tea, by segment, at current prices, 2014-24
Figure 10: Total US retail sales and forecast of tea, by segment, at current prices, 2014-24
MARKET PERSPECTIVE
Coffee dwarfs tea
Bubbling sales of sparkling water
Figure 11: Total US retail sales and forecast of packaged still and sparkling water, by segment, at current prices, 2013-23
Consumers want a boost from energy drinks
Figure 12: Total US retail sales and forecast of energy drinks and shots, by segment, at current prices, 2013-23
MARKET FACTORS
Americans are sick, stressed, and tired
Figure 13: Product formats used when experiencing cold, flue, or allergy symptoms, December 2018
Figure 14: Health concerns experienced in the past year, November 2018
Figure 15: Reasons for drinking energy drinks more often, February 2019
KEY PLAYERS – WHAT YOU NEED TO KNOW
Diversification brings tea into new occasions
Uncertain future for kombucha
Lack of excitement for both single cup and black tea
Tea fits the needs of today’s health-conscious consumers
COMPANY AND BRAND SALES OF TEA
Unilever’s brands drag down brewed tea market
Figure 16: Multi-outlet sales of bagged, loose leaf, and single cup tea, by leading companies and brands, rolling 52 weeks 2018 and 2019
Smaller brands driving much of the RTD market
Figure 17: Multi-outlet sales of RTD tea, by leading companies and brands, rolling 52 weeks 2018 and 2019
WHAT’S WORKING?
Restaurant operators add more teas to their menus
Figure 18: Change in incidence of tea drinks on menus, Q1 2016 – Q1 2019
Figure 19: beverages consumed away from home in the past three months, Change in consumption incidence, April 2017 – April 2019
Compete with CSDs by adding bubbles
Herbal tea brands focus on gut health
WHAT’S STRUGGLING?
Kombucha is trendy but will it reach its ceiling?
Figure 20: Product perception, kombucha vs RTD tea, “good value,” Top 2 box score
Figure 21: top 5 kombuchas with the highest purchase intent score, launched between January 2018 and June 2019
Single cup tea sales stumble
Figure 22: MULO sales of tea bags/loose leaf and single cup tea, 2014 - 2018
Figure 23: brewed tea launches by format, by share of launches, 2015-19
Don’t bet on black
Figure 24: Flavors of tea (in bags or packages) purchased, 2013-18
Figure 25: Black tea (in bags or packages) purchased, by age, 2013-18
Figure 26: Brewed black tea vs brewed tea excluding black, perception
WHAT’S NEXT?
Make RTD tea a “tonic”
Connect tea with hydration
Tea is the first natural energy drink
Tea meets booze
Figure 27: tea as an ingredient in cocktails
Figure 28: tea as an ingredient in mocktails
THE CONSUMER – WHAT YOU NEED TO KNOW
Kombucha drinkers love its probiotics
Tea provides the benefits consumers want
Flavor and product development opportunities remain strong
RTD tea is tasty but not necessarily healthy
TEA CONSUMPTION
Younger affluent consumers are key tea drinkers
Figure 29: Tea consumption, May 2019
Figure 30: Tea consumption, by gender and age, May 2019
Figure 31: Repertoire analysis, tea drinks purchased, by gender and age, May 2019
Figure 32: Tea consumption, by age and income, May 2019
REASONS FOR DRINKING KOMBUCHA
It’s a gut feeling
Figure 33: Reasons for drinking kombucha, May 2019
Figure 34: Self-statement agreement, “describes me very well,” by tea type drinkers, May 2019
Kombucha’s probiotics appeal to women
Figure 35: Reasons for drinking kombucha, May 2019
REASONS FOR NOT DRINKING KOMBUCHA
Kom-what-cha?
Figure 36: Reasons for drinking not drinking kombucha, May 2019
Figure 37: Reasons for drinking not drinking kombucha, by select demographics, May 2019
INTEREST IN TEA BENEFITS
Tea is the original relaxation drink
Figure 38: Interest in tea benefits, May 2019
Functional tea claims resonate with women
Figure 39: Interest in tea benefits, by gender, May 2019
Figure 40: Interest in tea benefits, by gender and age, May 2019
Make kombucha a super-functional drink
Figure 41: Interest in tea benefits, by tea type consumption, May 2019
Premium RTD tea drinkers will pay more for a healthier tea
Figure 42: Interest in tea benefits, by RTD tea attitudes, May 2019
TEA PRODUCT INTEREST
Strong opportunity for further product development
Figure 43: Tea product interest, May 2019
Figure 44: Tea product interest, by generation, May 2019
Figure 45: Tea product interest, by age and income, May 2019
Kombucha consumers are exploratory tea drinkers
Figure 46: Tea product interest, by tea type consumed, May 2019
Sweetened RTD tea drinkers prefer what they know
Figure 47: Tea product interest, by RTD tea attitudes, May 2019
RTD TEA ATTITUDES
Better than soda, but still sugary
Figure 48: RTD tea attitudes, May 2019
Build on the success of kombucha and engage young affluent consumers
Figure 49: RTD tea attitudes, by age and income, May 2019
TEA PERCEPTION BY FORMAT
RTD tea excels on taste but lacks health, quality associations
Figure 50: Tea perception by format, among format drinkers, May 2019
Figure 51: Tea perception by format, among format drinkers, May 2019
IMPORTANT PURCHASE FACTORS
Opportunity for increased flavor development
Figure 52: Important tea purchase factors, May 2019
Create products for health-conscious RTD tea drinkers
Figure 53: Important tea purchase factors, by RTD tea attitudes, May 2019
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Purchase Intelligence
Mintel Menu Insights
Abbreviations and terms
Abbreviations
APPENDIX – THE MARKET
Figure 54: Total US retail sales and forecast of tea, at inflation-adjusted prices, 2014-24
Figure 55: Total US retail sales of tea, by segment, at current prices, 2017 and 2019
Figure 56: Total US retail sales and forecast of bagged, loose leaf, single cup tea, at inflation-adjusted prices, 2014-24
Figure 57: Total US retail sales and forecast of RTD tea, at inflation-adjusted prices, 2014-24
Figure 58: Total US retail sales and forecast of instant tea mixes, at inflation-adjusted prices, 2014-24
Figure 59: Total US retail sales of tea and RTD tea, by channel, at current prices, 2014-19
APPENDIX – KEY PLAYERS
Figure 60: Multi-outlet sales of tea and RTD tea, by leading companies, rolling 52 weeks 2018 and 2019
Figure 61: Multi-outlet sales of instant tea mixes, by leading companies and brands, rolling 52 weeks 2018 and 2019
APPENDIX – CONSUMERS
Figure 62: Tea perception by format, May 2019

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