Tea & RTD Tea - US - July 2015

OVERVIEW

What you need to know

Definition

EXECUTIVE SUMMARY

Tea category continues upward

Figure 1: Total US sales and fan chart forecast of market, at current prices, 2010-20

The issues

Figure 2: MULO sales of tea, by leading companies, rolling 52 weeks ending April 2015

Figure 3: Total US retail sales and forecast of single-cup tea, at current prices, 2010-20

Figure 4: Beverage Tracker, by coffee and tea, March 2015

The opportunities

Figure 5: Usage – Any consumption, April 2015

Figure 6: Ideal ready-to-drink tea creation, April 2015

Figure 7: Ideal RTD tea categorization - Characteristics, April 2015

What it means

THE MARKET

What you need to know

Tea continues upward trajectory

RTD segments lead in sales and growth; single-cup struggles

Tea prices, health drive growth

Market size and forecast

Tea continues upward trajectory

Figure 8: Total US sales and fan chart forecast of market, at current prices, 2009-19

Figure 9: Total US sales and forecast of tea and RTD tea, at current prices, 2010-20

Figure 10: Total US sales and forecast of tea and RTD tea, at inflation-adjusted prices, 2010-20

Market breakdown

RTD teas lead segment sales, growth; single-cup struggles

Figure 11: Total US retail sales and forecast of tea and RTD tea, by segment, at current prices, 2010-20

RTD tea growth stays consistent through 2020

Figure 12: Total US retail sales and forecast of tea and RTD tea, by canned/bottles tea and refrigerated tea, at current prices, 2010-20

Bagged/loose leaf, single-cup tea growth flat through 2020

Figure 13: Total US retail sales and forecast of tea and RTD tea, by bagged/loose leaf tea and single-cup tea, at current prices, 2010-20

Retail channels experience double-digit sales growth

Figure 14: Total US retail sales of tea and RTD tea, by channel, at current prices, 2013 and 2015

Natural channel sales grow 23.6% from 2013-15

Figure 15: Natural supermarket sales of tea and RTD tea, at current prices, April 2013-15

Segments see sales growth at natural channels

Figure 16: Natural supermarket sales of tea and RTD tea, by form, rolling 52 weeks ending April 2013 and April 2015

Market factors

US increasing imports of tea

Figure 17: US worldwide imports of tea and mate, trending 1999-2014

Households with families’ income increasing

Figure 18: Median household income, in inflation-adjusted dollars, 2003-13

Households with children decline

Figure 19: Households, by presence of own children, 2003-13

Overweight/obesity trends remain an issue

Figure 20: National percent of adults aged 18+ who are obese or overweight, 2011-13

Figure 21: National percent of students in grades 9-12 who are obese or overweight, 2001-13

KEY PLAYERS

What You need to know

Leading companies see MULO sales growth

Private label, other brand, refrigerated teas see success

Single-cup struggles

Manufacturer sales of tea and rtd tea

Leading companies see MULO sales growth

Figure 22: MULO sales of tea, by leading companies, rolling 52 weeks ending April 2015

Figure 23: MULO sales of tea, by leading companies, rolling 52 weeks 2014 and 2015

What’s working?

Private label, other brands experience MULO sales gains

Figure 24: MULO sales – Other brands and private label, by leading companies and brands, rolling 52 weeks 2014 and 2015

Premium, refrigerated teas sees stellar growth

Figure 25: MULO sales of refrigerated tea, by leading companies and brands, rolling 52 weeks 2014 and 2015

Health, foodservice benefits leading bagged teas

Figure 26: MULO sales of bagged and loose leaf tea, by leading companies and brands, rolling 52 weeks 2014 and 2015

Who’s struggling?

Single-serve cups

Figure 27: MULO sales of single cup tea, by leading companies and brands, rolling 52 weeks 2014 and 2015

What’s next?

Cold-brew

Sparkling tea

Unique brews

New blends

THE CONSUMER

What you need to know

Majority of consumers drink tea

Idea RTD tea creation

Ideal teas are healthy and relaxing

Total tea consumption

Majority of consumers drink tea

Figure 28: Usage – Any consumption, April 2015

Figure 29: Teen RTD tea consumption, trended 2010-14

Bagged tea most popular with adults

Figure 30: Usage – Any adult consumption, April 2015

One tea type for the whole family

Figure 31: Usage – Any teen/child consumption, April 2015

RTD tea

Millennials drinking tea most

Figure 32: Usage – Personal consumption, by any ready-to-drink tea, by generations, April 2015

Figure 33: Usage – Personal consumption, by ready-to-drink tea type, by generations, April 2015

Opportunities with health-focused Gen Xers and Baby Boomers

Figure 34: Usage – Personal consumption, by ready-to-drink tea type, by generations, April 2015

Parents heavy tea drinkers

Figure 35: Usage, by any ready-to-drink tea, by parental status, April 2015

Figure 36: Usage – Personal consumption, by ready-to-drink tea type, April 2015

Figure 37: Usage, by any ready-to-drink tea, April 2015

Bagged/loose leaf tea

Women heavy bagged tea users, men dominate loose leaf and powdered

Figure 38: Usage – Personal consumption, by bagged/loose leaf tea type, by gender and age, April 2015

Higher income levels support all tea consumption

Figure 39: Usage – Personal consumption, by any bagged/loose leaf tea, by household income, April 2015

Fathers drink more tea

Figure 40: Usage – Personal consumption, by bagged/loose leaf tea type, by parental status, April 2015

Consumers’ ideal RTD tea

Perceived ideal RTD tea is natural, healthy, uncarbonated, with vitamins

Figure 41: Ideal ready-to-drink tea creation, April 2015

Single-serve RTD tea most created

Figure 42: Ideal ready-to-drink tea creation – Container type, April 2015

Lightly sweetened is ideal

Figure 43: Ideal ready-to-drink tea creation – Sweetness level, by generation, April 2015

Millennials open to textured RTD tea

Figure 44: Ideal ready-to-drink tea creation – Texture, by generation, April 2015

Citrus, unflavored teas most popular ideal RTD tea flavors

Figure 45: Ideal ready-to-drink tea creation – Flavor, April 2015

Figure 46: Top RTD tea flavors, 2010-14

Vitamins preferred in ideal RTD tea

Figure 47: Ideal ready-to-drink tea creation – Function/attributes, by generations, April 2015

Majority wants ideal RTD tea with natural claims

Figure 48: Ideal ready-to-drink tea creation – Ingredient/nutritional claims, by generation, April 2015

Figure 49: Ideal ready-to-drink tea creation – Ingredient/nutritional claims, by generation, April 2015

Ideal tea categorization and usage

Ideal teas described as healthy, hydrating, relaxing

Figure 50: Ideal RTD tea categorization – Characteristics, April 2015

Ideal RTD tea consumed with meals, on-the-go

Figure 51: Ideal RTD tea categorization – Usage, April 2015

Distinct differences between ideal tea as snack or exercise beverage

Figure 52: Correspondence analysis – Ideal RTD tea categorization, April 2015

Optimal target for an ideal “relaxing” RTD tea

Figure 53: Ideal RTD tea characteristics – CHAID – Tree output, April 2015

Purchase location

Supermarkets primary purchase channel

Figure 54: RTD tea purchase location, by generation, April 2015

Figure 55: RTD tea purchase location, by parental status, April 2015

APPENDIX

Data sources and abbreviations

Data sources

Fan chart forecast

Abbreviations and terms

Market

Figure 56: Total US sales and forecast of canned/bottled tea, at current prices, 2010-20

Figure 57: Total US sales and forecast of canned/bottled tea, at inflation-adjusted prices, 2010-20

Figure 58: Total US sales and forecast of refrigerated tea, at current prices, 2010-20

Figure 59: Total US sales and forecast of refrigerated tea, at inflation-adjusted prices, 2010-20

Figure 60: Total US sales and forecast of bagged/loose leaf tea, at current prices, 2010-20

Figure 61: Total US sales and forecast of bagged/loose leaf tea, at inflation-adjusted prices, 2010-20

Figure 62: Total US sales and forecast of single-cup tea, at current prices, 2010-20

Figure 63: Total US sales and forecast of single-cup tea, at inflation-adjusted prices, 2010-20

Figure 64: Total US retail sales of tea and RTD tea, by channel, at current prices, 2010-15

Figure 65: Natural supermarket sales of tea and RTD tea, by organic content, rolling 52 weeks ending April 2013 and April 2015

Figure 66: Natural supermarket sales of tea and RTD tea, by fair trade labeling/certification, rolling 52 weeks ending April 2013 and April 2015.. 62

Figure 67: Natural supermarket sales of bag/loose tea, by type, rolling 52 weeks ending April 2013 and April 2015

Key players

Figure 68: MULO sales of canned and bottled tea, by leading companies and brands, rolling 52 weeks 2014 and 2015

Figure 69: MULO sales of refrigerated tea, by leading companies and brands, rolling 52 weeks 2014 and 2015

Figure 70: MULO sales of bagged and loose leaf tea, by leading companies and brands, rolling 52 weeks 2014 and 2015

Figure 71: MULO sales of single cup tea, by leading companies and brands, rolling 52 weeks 2014 and 2015

Correspondence analysis

Methodology

Figure 72: Ideal RTD tea categorization, April 2015

CHAID analysis

Methodology

Figure 73: Ideal RTD characteristics – CHAID – Table output, April 2015

RESEARCH METHODOLOGY

US Research Methodology

Consumer research

Social Media Research

Trade research

Statistical Forecasting

Tea & RTD Tea - US - July 2015

"The tea and RTD (ready-to-drink) tea category has experienced stellar growth in recent years, the result of growing interest in health and wellness and greater availability in both bagged/loose leaf and RTD teas."

Elizabeth Sisel, Beverage Analyst

This report covers the following areas:

Fragmented market challenges brand loyalty
Future for single-cup teas?
Coffee still holds upper hand