Tea On the Menu

While coffee will continue to boost industry sales, it’s the $20 billion foodservice tea market that likely will have the edge in future growth momentum as sales are expected to increase through 2018 and beyond, according to market researchers at Packaged Facts.

The newly released Foodservice Tea Market Trends in the U.S., describes in detail consumer preference for hot and cold tea and tisanes.

LOGO-Packaged FactsOverall demand for tea has increased due to its perceived health benefits, convenience, and availability, according to Packaged Facts analyst Sarah Schmidt. “In the United States, volumes in the ready-to-drink tea category grew by 3.7%, outperforming carbonated soft drinks, which declined 1%,” she said.

Ordering tea in restaurants is influenced by a myriad of factors including price, time of day, outside temperatures, convenience and health. Schmidt said that each draw at least a 15% response rate as a “most” important choice based on the researcher’s consumer survey.

Characteristics including brand, Fair Trade and organic certification are not a strong influence.

Taste is by far the most important factor in deciding to order restaurant tea. “But taste also has a high degree of correlation to quality and flavor preference,” according to the report. “Indeed, flavor enhances the mild taste of most tea drinks, so it’s understandable that getting a specific flavor would influence nearly 3 out of 10 tea drinkers,” reports Packaged Facts.

Operators should ensure that at least a few quality teas are available in universal flavor preferences for both hot and cold consumption. Trends clearly point to variety and flavor expansion to create a more interesting tea menu, according to the report.

Demographic preferences

TeaServiceMillennials are motivated by health and wellness. This interest escalates among more affluent young adults in households with incomes over $100,000 as they are especially influenced by tea associated with fair trade, organic, and healthfulness, according to the report.  “Men age 18-54 much more likely to claim that fair trade, organic, and healthfulness influence their decision when deciding to get a tea drink at a restaurant, which suggests that men likely associate these attributes with better taste and higher quality,” according to Packaged Facts.

“While healthfulness is a hallmark attribute of tea, not enough menu developers leverage the drink’s positive health positioning. Tea can be used as way to integrate health on the menu by offering a natural and low-calorie beverage in place of soft drinks. At the same time, menu developers can woo guests with taste descriptors/innovations—especially since trying something new/different also has power to influence choice among Millennials across income barriers,” according to the report.

On the menu
Soda accounts for nearly 30% of non-alcoholic beverages listed on U.S. restaurant menus and diet soda accounts for another 6% but hot tea is “gaining some traction, with a 2% increase in restaurants serving hot tea during the period 2011-15,” according to Packaged Facts.

WTN140616_ART_GreenTea Undefined varieties of hot tea now appear on 97% of all menus. Specific varieties of tea are also beginning to appear on menus with green tea listed on 18.7% of the nation’s menus and herbals on 10.7% of the menus.  “Green tea continues to gain momentum as a result of its positive health alignment and both jasmine and chamomile increased their presence,” according to the report. Tea lattes, Rooibos, chai and matcha all showed increased presence on menus in the past year.

Next up: blends
In developing menu offerings restaurant operators should retain pure tea drinks that aren’t sweetened or flavored. Operators can also leverage menu descriptors such as strength, power, energy, fitness, and focus.

According to Schmidt unique beverage blends that combine different categories— such as tea and energy drinks— are expected to be a continuing trend. “These tea fusions give consumers access to an array of exciting flavor profiles and more premium options that may come with higher price points,” she writes.

Learn more at Packaged Facts

Sources: Market Realist, Packaged Facts

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Dan Bolton

About Dan Bolton

Dan Bolton edits STiR Tea & Coffee Industry International. He was formerly editor and publisher of World Tea News and former editor and publisher of Tea Magazine and former editor-in-chief of Specialty Coffee Retailer. He is a beverage retail consultant and frequent speaker at industry seminars and conferences. His work has appeared in many beverage publications. He was a newspaper reporter and editor for 20 years prior to his career in magazines. Dan is the founding editor of Natural Food magazine and has led six publishing ventures since 1995. He lives in Winnipeg, Canada.