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The U.S. Market for Tea and Ready-to-Drink Teas


Attention: There is an updated edition available for this report.

The U.S. market for tea is coming into its own. Emerging from the shadow of the coffee market, tea is enjoying new-found popularity among aging baby boomers and others who are embracing 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 new, stand-alone Packaged Facts study of the tea comprehensively examines the new dynamics at work, profiling market leaders such as 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 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 tea drinkers.


Chapter 1: Executive Summary

  • Scope and Methodology
  • Five Major Product Segments
  • Tea Market Size and Growth
  • Figure 1-1: U.S. Total Sales of Tea and Ready to Drink Tea, 1999-2003
  • RTD the Dominant Segment
  • Growth by Product Segment
  • Factors in Future Growth
  • Lipton the Dominant Marketer
  • Snapple New at No. 2
  • Nestle Drops to Third
  • Other Major Tea Marketers
  • The Competitive Situation
  • New Product Trends
  • Retail: Estimated Share of Sales by Segment and Outlet
  • Projected Market Growth
  • Market to Reach $6.6 Billion by 2008
  • Figure 1-2: Projected Total U.S Sales of Tea and Ready-to-Drink Tea, 2004-2008

Chapter 2: The Products

  • Tea Packaged for Future Brewing or Mixing
  • Tea Bags and Loose Tea Leaves
  • Black Tea and Green Tea
  • Green Tea
  • Specialty and Herbal Teas
  • Specialty Tea
  • Herbal Tea
  • Chai
  • Red Tea
  • Yerba Mate
  • White Tea
  • Caffeine
  • Organic Tea
  • Private Label Tea
  • Product Introductions Over the Last 5 Years
  • 2001 - Flavor for All
  • 2002 - Return of the Black Tea
  • 2003 - Kids and White Tea
  • Instant and Specialty Tea Mixes
  • The Rise of Chai
  • New Product Activity, 2002-2003
  • Ready to Drink Packaged Tea Beverages
  • Ready-to-Drink (RTD) Tea
  • RTD Tea Highly Sub-segmented
  • Cold-Fill RTDs
  • Hot-Fill RTDs
  • New Product Introductions: Innovation in Review
  • 2000 - An Elixir for Arizona
  • 2002 - Innovation Continues
  • 2003 - Bold Flavors
  • Freshly Brewed Tea for Immediate Consumption
  • Tea Houses
  • CoffeeShops

Chapter 3: The Market

  • Table 3-1: U.S. Retail Sales of Tea and Ready-to-Drink Tea by Category, 1999-2003
  • Figure 3-1: U.S. Total Sales of Tea and Ready to Drink Tea, 1999-2003
  • Market Size and Composition
  • Segments on the Rise After Disappointing Period
  • Table 3-2: 5-Year Compound Annual Growth Rates, Tea Categories and Overall, 1999-2003
  • Table 3-3: U.S. Retail Tea and Ready-to-Drink Tea: Share of Dollar Sales by Category, 2003
  • Ready-to-Drink Category Controls Overall Market Share
  • Figure 3-2: U.S. Retail Tea and Ready-to-Drink Tea: Share of Dollar Sales by Category, 2003
  • Table 3-4: U.S. Retail Tea and Ready-to-Drink Tea: Share of Dollar Sales by Category, 1999 2003
  • Bagged/Loose Tea Control IRI-Tracked Sales
  • Table 3-5: IRI-Tracked Sales of Tea and Ready to Drink Tea by Category, 1999-2003
  • Table 3-6: IRI-Tracked Tea and Ready to Drink Tea: Share of Dollar Sales by Category, 1999-2003
  • Figure 3-3: IRI-Tracked Tea and Ready to Drink Tea: Share of Dollar Sales by Category, 2003
  • Private Label Shows Modest Gains in 2003
  • Table 3-7: IRI-Tracked Sales of Tea and Ready-to-Drink Tea: Branded vs. Private Label, 1999-2003
  • Projected Market Growth
  • Market to Reach $6.6 Billion by 2008
  • Table 3-8: Projected U.S. Retail Sales of Tea, 2003-2008
  • Figure 3-5: Projected Total U.S Sales of Tea and Ready-to-Drink Tea, 2004-2008
  • Projected U.S. Retail Sales of Tea by Category: Loose/Bagged, RTD, Instant, Refrigerated, 2003-2008 (in millions of dollars)

Chapter 4: Market Dynamics

  • A Very Full and Continually Growing Supermarket Aisle
  • Marketer or Manufacturer?
  • Distribution Agreements
  • Pepsi Lipton International
  • Beverage Partners Worldwide
  • Table 4-1: Select Marketers of Packaged Tea Products: By Brand and Product Type
  • Competitive Retail Overview
  • Retail Leaders in a Very Branded Business
  • The Tea Big Three
  • Variety, Variety, Variety
  • The Alternative Beverage Context
  • Outside the RTD Sector: Consolidation vs. Independence Hain Celestial and Tata/Tetley
  • FV&S and Bigelow Remain Independent—For Now
  • Competing by Fielding New Products
  • The Slowly Growing Organic Market
  • Health Is Key Factor
  • Table 4-2: IRI-Tracked Sales of Tea Packaged for Future Brewing or Mixing
  • Top Five Marketer Sales and Shares 2003
  • Table 4-3: IRI-Tracked Sales of Tea Packaged for Future Brewing or Mixing
  • Top 10 Brand Sales and Shares 2003
  • Table 4-4: U.S Retail Sales of Tea Bags Top-Three Marketer Sales and Shares 2003
  • Table 4-5: U.S Retail Sales of Tea Bag: Top Ten Brand Sales and Shares 2003
  • Table 4-6: U.S Retail Sales of Instant Tea Including Specialty Instant Tea Mixes: Top Three Marketer Sales and Shares 2003
  • Table 4-7: U.S Retail Sales of Instant Tea Including Specialty Instant Tea Mixes: Top Five Brand Sales and Shares 2003
  • Table 4-8: U.S Retail Sales of Ready to Drink Packaged Tea Beverages: Top Three Marketer Sales and Shares 2003
  • Table 4-9: U.S Retail Sales of Ready to Drink Packaged Tea Beverages:
  • Top Five Brand Sales and Shares 2003
  • Competitive Profiles: Thomas J. Lipton Co.
  • Dominates U.S. Tea Sales
  • Product Activity: 1996-2002
  • Lipton Cold Brew
  • Lipton, Pepsi, and RTD Tea
  • Lipton Brisk
  • Lipton Brisk Lemonade Launched This Year
  • The Changing Face of Hot Filled Lipton Iced Tea
  • Competitive Profile: Nestle
  • Competitive Profile: Snapple
  • The Rebirth of Snapple
  • Cadbury Consolidates
  • Snapple Temporarily Takes New York
  • Competitive Profile: Salada
  • Competitive Profile: Hain Celestial Group
  • Celestial Leader in Herbal Tea
  • Celestial Seasonings
  • Reasons for Success
  • Entrepreneurial Origins
  • Wide-Ranging Retail Presence
  • International Scope
  • Celestial’s Product Line
  • High Profile Promotion
  • Competitive Profile: Ferolito, Vugtaggio & Sons
  • Continuing Success with AriZona
  • A Beacon of Independence
  • Design Not Advertising Led
  • Cutting-Edge Formulations
  • FV&S Collaborates with Celestial
  • The AriZona Rx Line
  • Innovation Continues
  • Recent Introductions
  • Competitive Profile: R.C. Bigelow
  • A Leader in Specialty Tea
  • Mass-Retail Sales
  • Competitive Profile: PepsiCo, Inc
  • Corporate Background
  • SoBe
  • Competitive Profile: Tata Tea/Tetley
  • Tetley No. 2 in World Tea
  • Tetley in the U.S. Market
  • Tetley Acquired by Tata
  • Great Synergistic Potential
  • Tetley Says Good-Bye to Its Private Label business
  • Corporate Restructuring
  • New Strategy for 2003
  • Competitive Profiles: Tazo Tea
  • Specialty Tea Competitive Focus
  • Oregon Chai, Inc.
  • The Stash Tea Co
  • Twinings
  • The Republic of Tea
  • Numi
  • Honest Tea
  • Frontiers
  • Allgoode Organics
  • Traditional Medicinals Profile

Chapter 5: Distribution and Sales Channels

  • Retail Distribution Methods
  • Some Packaged Tea Beverages Are Perishable. Retail Cafes
  • Retail Sales Overview
  • Supermarkets Account for Most Retail Sales
  • Tea in Natural Foods Stores
  • Tea in Gourmet/Specialty Stores
  • Tea and Convenience Stores
  • Tea and Drug Stores
  • Table 5-1: Share of US Tea and Ready-to-Drink Tea Sales by Outlet, 2003
  • Table 5-2: U.S Tea and Ready-to-Drink Tea: Share of Total Sales of Tea Bags by Outlet, 2003
  • Table 5-3: Specialty Tea: Share of Sales by Outlet %
  • Table 5-4: Herbal Tea: Share of Sales by Outlet %
  • Table 5-5: U.S Tea and Ready-to-Drink Tea: Share of Total Sales of Instant Tea by Outlet, 2003
  • Table 5-6: U.S Tea and Ready-to-Drink Tea: Share of Total Sales of Specialty Tea Mixes by Outlet 2003
  • Table 5-7: U.S Tea and Ready-to-Drink Tea: Share of Total Sales of Packaged Tea, by Outlet
  • Pricing of Retail Tea Products
  • Table 5-8: Suggested Retail Price of Select Packaged Tea Products for Future Use
  • Table 5-9: Suggested Retail Price of Select Packaged Tea Beverage Products
  • Private Label the Value Proposition
  • Table 5-10: Private Label vs. Branded Pricing of Tea Bags
  • Table 5-11: Private Label vs. Branded Pricing of Instant Tea
  • Table 5-12: Private Label vs. Branded Pricing of Specialty Instant Tea Mixes
  • Alternative Distribution Channels
  • Warehouse/Club Stores
  • Mail Order/Catalog
  • Internet
  • Gift Baskets
  • Tea House Distribution Overview
  • Tea House Distribution Methods
  • Focus On Starbucks Tazo Distribution
  • Other Products Sold

Chapter 6: The Consumer

  • The Simmons Survey System
  • Rates for Tea Consumption Strong
  • Nearly Half Are Ready-To-Drink Tea Consumers
  • Table 6-1: Demographic Characteristics Favoring Purchase of RTD Tea, 2003
  • Baby Boomers and Diet Iced Tea
  • Consumer Profiles of Top RTD Brands
  • RTD Brand Consumption By Age
  • RTD Brand Consumption By Race
  • RTD Brand Consumption By Region
  • RTD Brand Consumption By Education
  • RTD Brand Consumption By Income
  • Other Descriptors
  • The Instant Tea Mix Consumer
  • Table 6-2: Demographic Characteristics Favoring Purchase of Instant Tea, 2003
  • Young Use Tea Bags for Iced Tea
  • The Tea Bag Consumer
  • Table 6-3: Demographic Characteristics Favoring Purchase of Tea Bags, 2003
  • The Loose Tea Consumer
  • Table 6-4:Demographic Characteristics Favoring Purchase of Loose Tea, 2003
  • The Herbal Tea Consumer
  • Table 6-5: Demographic Characteristics Favoring Purchase of Herbal Tea, 2003
  • The Flavored Tea Consumer
  • Table 6-6: Demographic Characteristics Favoring Purchase of Flavored Tea, 2003

Chapter 7: Trends and Opportunities

  • 1995-2000: The Heady Days of the Tea Explosion
  • 2001and 2002: Growth Stopped in its tracks
  • 2003: Growth Hits Back
  • Private Label Eeks Back
  • Regular Tea Improves
  • Green Tea Means Green for Marketers
  • Specialty Offers New Cache
  • Herbal and Flavored Go Mainstream
  • Chai Driving Tea Mixes
  • Wellness Teas
  • Ready-to-Drink Tea
  • Tea as Ingredient
  • Opportunity Focus: Tea Houses
  • Starbucks and Tazo
  • Change Is Brewing
  • Tea Houses: The Future?

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