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The $12+ billion U.S. market for at-home coffee and tea has reached a historical turning-point. The long sustained efforts by purveyors of specialty coffee to win consumers over to the virtues of top quality have largely succeeded--in the process pushing up both sales and consumption. But at the same time makers of traditional mass-market coffee are staring into the abyss, as their products continue to stagnate and even decline. This is resulting in a shakeup at the top, as long-time leaders either opt out, partner with soft drink giants, or otherwise consider their options. Meanwhile, tea continues to hold forth the promise of a huge surge, as aging baby boomers and others embrace healthier or more interesting alternatives to soft drinks and coffee. Indeed, some see tea now as at the same stage coffee was a decade ago, before it exploded in popularity. This 2001 update of Packaged Facts' study of the Coffee and Tea market comprehensively examines the new dynamics at work, profiling market leaders such as Procter & Gamble, Kraft, Nestle, Lipton, Tetley, Celestial Seasonings, and Starbucks--as well as other significant players--as they grapple with the challenges of fundamentally changed conditions. It also provides a quantitative analysis of sales trends, price movements, historical consumption rates, and marketer/brand shares, as well as a qualitative evaluation of factors in growth and decline, mass/specialty interaction, and increasingly rapid innovation. Other features of this study include a detailed listing of new products, an in-depth consideration of the impact of coffee cafes and tea shops on the at-home market, an assessment of advertising and promotional trends, a look at the market from supermarket and other retail perspectives, and complete consumer profiles of coffee and tea drinkers.

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Additional Information

Scope And Methodology

Market Parameters

This study examines the U.S. market for two interrelated types of beverages: coffee and tea. Included within its scope are all coffee and tea beverage products sold at retail through mass and specialty outlets for at-home consumption. Not included within the scope of this study are coffee/tea products sold through foodservice, commercial, and institutional outlets (restaurants, offices, hotels, airlines, schools, and so forth). As a rule, coffee and tea purveyed through these channels are sold to the consumer “by the cup” expressly for away-from-home imbibing.

Study Methodology

The information contained in this study was compiled from both primary and secondary sources. Primary research took the forms of consultation with industry ex-perts and on-site inspections of the major retail outlets. Secondary research entailed analysis and synthesis of a vast range of information collected from the industry-dedicated trade press, coffee and tea trade associations, government documents, retail journals, marketer publications and press releases, and other relevant sources. Sales figures are based on a comprehensive evaluation of various current market estimates and growth tends as put forth in the trade literature, as well as specific reliance for mass market sales on Information Resources, Inc. (IRI), the most prominent and comprehensive U.S. source for data on sales through food, drug, and mass merchan-diser stores. Our analysis of consumer demographics is based on data supplied by Simmons Market Research Bureau for 2000.

Press Release

Tea versus coffee: the battle escalates as tea sales grow

New York, September 6/PRNewswire – According to a new report from Packaged Facts released by MarketResearch.com, Coffee and Tea Market: 2001, coffee accounts for 62% of overall coffee/tea dollar sales while tea holds a 38% share. However, since 1998 tea has gained about three share points versus coffee and tea sales have been far more robust as compared with those of coffee. With the market for coffee and tea accounting for roughly $12 billion in sales a year, it’s clear that people are passionate about both beverages.

The industry has become increasingly dynamic as new health benefits and economic trends have emerged in recent years. For example, as medical studies have shown that tea can reduce the risk for coronary artery disease, stroke, and some cancers, health conscious baby boomers have driven the beverage to new heights of popularity, while expensive specialty coffees have maintained impressive sales levels despite the recent economic downturn, leading some experts to label the industry as recession-proof.

The report covers recent Coffee and Tea Market: 2001, provides detailed information on distribution and marketing trends, as well as emerging retail campaigns, product development, and consumer demographic profiles. The report also includes historical sales data, as well as market projections through the year 2005.

According to Meg Hargreaves, VP of Research Publishing for MarketResearch.com, future growth in the coffee and tea industries will depend on two factors. “Quality and health will be the factors that determine the future of these markets,” Ms. Hargreaves stated. “Coffee will enjoy modest growth as high-quality specialty espresso-based drinks are widely embraced by younger adults. The popularity of tea will be largely due to a greater awareness of its health benefits, especially among the population of health conscious baby boomers.”

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