Tea and RTD Tea - US - August 2017


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Mintel

$ 3995

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Dollar sales of tea are projected to reach $8 billion in 2017. The market has continued steady dollar sales growth, increasing 24% from 2012-17. 79% of US adults drink tea, 60% drink RTD options, and 49% drink bagged/loose-leaf varieties. Good news comes from the fact that a higher percentage of drinkers are increasing tea consumption than are decreasing. Strong performance in the canned/bottled RTD segment, which delivers on convenience and variety for time-strapped, thirsty consumers, drives gains. The pace of tea growth is expected to slow amid a non-alcoholic beverage market ripe with stiff competition vying for share of stomach.
Table of contents

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY
The issues
Tea and RTD market grows 24% 2012-17; slowdown ahead
Figure 1: Total US retail sales and forecast of tea and RTD tea, at current prices, 2012-22
Instant tea mixes continue to struggle
Figure 2: Total US retail sales and forecast of tea and RTD tea, by segment, at current prices, 2012-22
Consumers have a fridge-full of options to quench their thirst
The opportunities
One in five tea drinkers has increased consumption in the past year
Figure 3: Tea statements Change in consumption, May 2017
Varied perception of products spells a category ripe for targeted marketing
Figure 4: Tea attributes, by type, May 2017
More effort could be made to help tea stand out from other drink options
Figure 5: Tea statements Health, May 2017
What it means
THE MARKET WHAT YOU NEED TO KNOW
Tea and RTD market grows 24% 2012-17
Canned/bottled RTD tea continues to lead the category
Consumers have a fridge-full of options to quench their thirst
Label updates and sugar taxes could help/hurt tea category
Less than one in four adults feel in control of stress
MARKET SIZE AND FORECAST
Tea and RTD market grows 24% 2012-17
Figure 6: Total US retail sales and forecast of tea and RTD tea, at current prices, 2012-22
Figure 7: Total US retail sales and forecast of tea and RTD tea, at current prices, 2012-22
Figure 8: Total US retail sales and forecast of tea and RTD tea, at inflation-adjusted prices, 2012-22
MARKET BREAKDOWN
Canned/bottled RTD tea continues to lead the category
Bagged/loose leaf segment lacks luster
Dollar sales of refrigerated tea grow 51%
Instant tea mixes continue to struggle
Figure 9: Total US retail sales and forecast of tea and RTD tea, by segment, at current prices, 2012-22
Other channels lead sales of tea
Figure 10: Total US retail sales of tea and RTD tea, by channel, at current prices, 2015 and 2017
Tea sales grow 12% in natural channels 2015-17
Figure 11: Natural supermarket sales of tea and RTD tea, at current prices, 2015-17
Figure 12: Natural supermarket sales of tea and RTD tea, at current prices, 2015-17
MARKET PERSPECTIVE
Consumers have a fridge-full of options to quench their thirst
Kombucha takes aim at CSDs
Tea lattes may help tea compete with coffee
Tea and lemonade blends can appeal as a lower calorie juice option
Label updates/anti-sugar laws put the focus on sugar; could help/hurt the category
Lightly sweetened product imply taste satisfaction, with lower guilt
Honey may help tea stay ahead of sugar concerns
Tea on-premise may do more to provide inspiration than competition
Figure 13: Tea drinks consumed at home vs away from home, October 2016
Figure 14: Coffee/tea drink interest, September 2016
MARKET FACTORS
Less than one in four adults feel in control of stress
Figure 15: Self-perception of stress control, by gender and age, household income, parental status by gender, and employment status, October 2016
KEY PLAYERS WHAT YOU NEED TO KNOW
Pepsi Lipton controls 20% of MULO sales of tea
Lipton sees strong growth in refrigerated tea segment
Bagged, loose leaf, single-cup tea launches on the decline
RTD and instant launch activity shows increased emphasis on clean products
COMPANY AND BRAND SALES OF TEA AND RTD TEA
Pepsi Lipton controls 20% of MULO sales of tea
Sales of tea and RTD tea, by company
Figure 16: MULO sales of tea and RTD tea, by leading companies, 52 weeks ending April 17, 2017
Leaders maintain their position in the 52 weeks ending April 17, 2017
Figure 17: MULO sales of tea, by leading companies, rolling 52 weeks 2016 and 2017
WHATS WORKING?
Premium positioning benefits the canned/bottled RTD tea segment
Figure 18: MULO sales of canned/bottled RTD tea, by leading companies and brands, rolling 52 weeks 2016 and 2017
Lipton sees strong growth in refrigerated and RTD tea segments; kombucha thrives
Figure 19: MULO sales of refrigerated tea, by leading companies and brands, rolling 52 weeks 2016 and 2017
Bagged/loose leaf/single-cup tea segment stagnates at MULO; strongest activity seen in wellness-focused brands
Figure 20: MULO sales of bagged/loose leaf/single cup tea, by leading companies and brands, rolling 52 weeks 2016 and 2017
RTD launch activity shows increased emphasis on clean products
Figure 21: Tea launches, by segment, 2013-17*
Figure 22: Tea launches RTD*, by leading claims, 2013-17**
Unflavored/plain lead RTD launches
Figure 23: Tea launches RTD*, by leading flavors, 2013-17**
while bagged/loose leaf, single-cup segment expands flavors
Figure 24: Tea launches Bagged, loose leaf, and single-cup teas, by leading flavors, 2013-17*
instant tea mixes highlight international flair
Figure 25: Tea launches Instant tea mixes, by leading flavors, 2013-17*
RTDs see strong growth in natural channels
Figure 26: Natural supermarket sales of tea and RTD tea, by segment, at current prices, 2015-17
WHATS STRUGGLING?
MULO sales of instant tea mixes decline by 5%
Figure 27: MULO sales of instant tea mixes, by leading companies and brands, rolling 52 weeks 2016 and 2017
Figure 28: Tea launches Instant tea mixes, by format, 2013-17*
WHATS NEXT?
Brands experiment with mouthfeel of RTDs
Tea cocktails move tea beyond the non-alcoholic beverage space
Cooking with tea may kickstart sluggish loose leaf tea sales
THE CONSUMER WHAT YOU NEED TO KNOW
79% of US adults drink tea
One in five tea drinkers has increased consumption in the past year
Interest in flavored/herbal tea on the rise
Tea has a strong association with relaxation
Promoting energy may boost morning tea consumption
More effort could be made to help tea stand out from other drink options
WHOS DRINKING TEA?
79% of US adults drink tea
Figure 29: Tea consumption Net, May 2017
Instance of tea consumption split by gender; tea types vary
Figure 30: Share of tea consumption Net, by gender, May 2017
25-44s make up the largest share of tea drinkers
Figure 31: Share of tea consumption Net, by age, May 2017
Half of teens drink RTD tea
Figure 32: Iced-tea (RTD) consumption, 2012-16
A third of tea drinker comes from HHs earning $100K+
Figure 33: Share of tea consumption Net, by HH income, May 2017
One in five tea drinkers has increased consumption in the past year
Figure 34: Tea statements Change in consumption, May 2017
TYPES OF TEA CONSUMED
RTD
Wide range of RTD options give consumers a lot to choose from
Regular-calorie leads over diet/low-cal RTDs
Fairly even split between single- and multiserve RTDs among consumers overall
Kombucha consumption is still relatively low
Figure 35: Tea consumption RTD tea, May 2017
Figure 36: Tea consumption Refrigerated RTD size, by age, May 2017
Figure 37: RTD tea consumption, by type, 2013-17
Bagged/loose leaf
Four in 10 consumers drink bagged tea
Figure 38: Tea consumption Bagged/loose leaf tea, May 2017
Figure 39: Tea consumption Bagged/loose leaf tea, by age, May 2017
Interest in flavored/herbal tea on the rise
Figure 40: Tea consumption Bagged/loose leaf tea, by flavor, 2013-17
Hot preparation leads iced tea usage for bags
Figure 41: Tea consumption Bagged/loose leaf tea, by purpose, 2013-17
Single-cup
Iced tea leads single-cup usage
Figure 42: Tea consumption Single-cup tea, May 2017
Instant
Instant iced tea mix use on the decline
Figure 43: Tea consumption Instant iced tea mix, 2013-15
Caffeinated vs. decaffeinated
A higher percentage of tea drinkers primarily drink caffeinated varieties
Figure 44: Tea statements Caffeinated, May 2017
Tea repertoire
Nearly a quarter of consumers drink 3-4 types of tea
Figure 45: Repertoire of tea consumption, May 2017
Young adults are more likely to purchase multiple tea types
Figure 46: Repertoire of tea consumption, by age, May 2017
Bagged tea leads for being the single tea of choice
Figure 47: Repertoire of tea consumption net types, May 2017
REASONS FOR CONSUMPTION
Tea performs well for flavor
Figure 48: Reasons for consumption, by type net, May 2017
Women are more likely to turn to tea for health reasons
Figure 49: Reasons for consumption, by gender, May 2017
Tea hits a lot of marks for younger consumers, underperforms on flavor
Figure 50: Reasons for consumption, by age, May 2017
DRINKING OCCASIONS
Coffee leads for morning consumption
Figure 51: Drinking occasion daypart, by beverage type, May 2017
Figure 52: Drinking occasion Daypart, by tea type, May 2017
Promoting energy may boost morning tea consumption
Figure 53: Drinking occasion energy, by beverage type, May 2017
Figure 54: Drinking occasion energy, by tea type, by age, May 2017
Weather occasions may present a strong opportunity for tea marketing
Figure 55: Drinking occasion weather, by beverage type, May 2017
Figure 56: Drinking occasion weather, by tea type, May 2017
Tea most closely competes with water across other occasions
Figure 57: Drinking occasion other occasions, by beverage type, May 2017
PERCEPTIONS OF TEA
Varied perception of products spell a category ripe for targeted marketing
Figure 58: Tea attributes, by type, May 2017
Figure 59: Tea statements RTD, May 2017
Younger consumers have higher perception of RTDs than do older consumers
Figure 60: Tea attributes Type, by age, May 2017
More effort could be made to help tea stand out from other drink options
Figure 61: Tea statements Health, May 2017
Tea drinkers arent bothered by time
Figure 62: Tea statements Brew, by gender and age, May 2017
APPENDIX DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Abbreviations and terms
Abbreviations
APPENDIX THE MARKET
Figure 63: Total US retail sales and forecast of refrigerated tea, at current prices, 2012-22
Figure 64: Total US retail sales and forecast of refrigerated tea, at inflation-adjusted prices, 2012-22
Figure 65: Total US retail sales and forecast of canned/bottled RTD tea, at current prices, 2012-22
Figure 66: Total US retail sales and forecast of canned/bottled RTD tea, at inflation-adjusted prices, 2012-22
Figure 67: Total US retail sales and forecast of bagged, loose leaf, and single-cup, at current prices, 2012-22
Figure 68: Total US retail sales and forecast of bagged, loose leaf, and single-cup, at inflation-adjusted prices, 2012-22
Figure 69: Total US retail sales and forecast of instant tea mixes, at current prices, 2012-22
Figure 70: Total US retail sales and forecast of instant tea mixes, at inflation-adjusted prices, 2012-22
Figure 71: US supermarket sales of tea and RTD tea, at current prices, 2012-17
Figure 72: US drugstore sales of tea and RTD tea, at current prices, 2012-17
Figure 73: US sales of tea and RTD tea through other retail channels, at current prices, 2012-17
APPENDIX KEY PLAYERS
Figure 74: MULO sales of tea and RTD tea, by leading companies, rolling 52 weeks 2016 and 2017
Figure 75: Tea launches, by segment, 2013-17*
Figure 76: Tea launches RTD*, by leading claims, 2013-17**
Figure 77: Tea launches Bagged, loose leaf, and single-cup teas, by leading claims, 2013-17*
Figure 78: Tea launches Instant tea mixes, by leading claims, 2013-17*
Figure 79: Tea launches RTD*, by leading flavors, 2013-17**
Figure 80: Tea launches Bagged, loose leaf, and single-cup teas, by leading flavors, 2013-17*
Figure 81: Tea launches Instant tea mixes, by leading flavors, 2013-17*
Figure 82: Tea launches RTD*, by pack type, 2013-17**
Figure 83: Tea launches Bagged, loose leaf, and single-cup teas, by format, 2013-17*
Figure 84: Tea launches Instant tea mixes, by format, 2013-17*
Figure 85: Natural supermarket sales of tea and RTD tea, by segment, at current prices, 2015-17
Figure 86: Natural supermarket sales of tea and RTD tea, by flavor, at current prices, 2015-17
Figure 87: Natural supermarket sales of tea and RTD tea, by packaging, at current prices, 2015-17
Figure 88: Natural supermarket sales of tea and RTD tea, by organic ingredients, at current prices, 2015-17
Figure 89: Natural supermarket sales of tea and RTD tea, by fair-trade labeling/certification, at current prices, 2015-17
Figure 90: Natural supermarket sales of tea and RTD tea, by presence of GMO ingredients, at current prices, 2015-17
Figure 91: Natural supermarket sales of tea and RTD tea, by "natural" labeling or perception, at current prices, 2015-17