Consumer Survey Shows Tea Consumption Rising

CHICAGO, Ill. 

A national survey released this week found 10% of U.S. consumers are purchasing more iced tea by the cup or glass than they did two years ago. Hot tea was the choice of 28% of customers and 34% report drinking dispensed iced tea. When it comes to flavors, 73% of consumers chose antioxidant-rich green tea because of its healthful benefits, making it the most appealing flavor for hot or iced tea.

“We asked consumers about whether they had “hot or cold specialty tea” in the past month, at home or away from home,” says Mary Chapman, Director of Product Innovation with Technomic, a market research firm specializing in away-from-home.

“Consumption rates (tea) were low, at 9%, but they skewed  much higher for those 18-34 (17%) and Asian consumers (20%),” adds Chapman. She said about 2% of consumers said they were drinking specialty tea such as chai and tea lattes at restaurants or foodservice locations more often than they were two years ago.

Sixty percent of respondents reported a preference for drip coffee, both regular and decaf, or black tea, according to the Technomic Consumer Trend Report.

The Chicago-based market research firm’s MenuMonitor shows prices continue to rise. A cup of tea averaged $2.57 this year up from $2.40 in 2008. Drip coffee averages $2.36 per cup, up from $2.25 in 2008.

Most consumers prefer regular drip coffee or a simple cup of black tea over the onslaught of non-fat lattes, cappuccinos and other espresso-based drinks, according to the report.

Technomic Vice President Joe Pawlak says understanding consumer motivations during various dayparts can help improve sales for operators and suppliers. “Consumers who regularly purchase coffee on their way to work are motivated by the convenience of the location,” Pawlak says, “but significantly, they are actually more motivated by the quality of the coffee, making them important loyal customers who return often, integrating the same locations into their normal routines.”

Quoting from the 2011 Market Intelligence Report: Coffee and Tea,  Pawlak cited:

– Green tea, healthful and antioxidant-rich, is of interest to nearly three out of four consumers (73 percent), making it the most appealing flavor for hot or iced tea. In recent years, the number of green tea products has increased significantly on chain menus, according to MenuMonitor data. Lemon and honey are also appealing tea flavors for a sizeable percentage of consumers (61 percent and 60 percent, respectively).

– In the second half of 2010, 6.4% of tea drinks on the menus of the top national and emerging chains and leading independent operators were described as being green tea, says Chapman. “In the second half of 2009, that figure was 5.2%. Same period in 08, it was 4.9%. So while it’s not taking the world by storm, green tea is showing some nice growth.”

– Overall, grocery, drug and mass-merchandise stores have experienced a 15.9 percent increase in coffee sales from 2007-10. Sales of packaged tea were $764 million in 2010 with about 92% of that at food stores. Unilever products comprised more than a quarter of that $764 million, says Chapman.

– Although each type of retailer saw a gain, mass merchandisers achieved the biggest increase (53.1 percent) to coffee sales of $318 million in 2010 from $208 million in 2007. While price increases played some role (see below), the rise is also due to mass merchandisers such as Target expanding their food and beverage offerings, increasing pressure on traditional food stores.

– With the exception of frozen/blended coffee drinks, all other types of coffee and tea drinks have steadily increased in price since 2008.

Technomic, a Chicago-based consultancy focused on away-from-home eating and drinking. To learn more about beverage trends in foodservice or on other issues visit www.technomic.com.

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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.