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Tea and RTD Tea - US - August 2017

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
WHAT’S 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
WHAT’S 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*
WHAT’S 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
WHO’S 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 aren’t 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

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