Iced Tea is America’s Tea

Iced tea is an American innovation that dates to the late 1800s and remains the most popular method of preparation by far.

Wednesday is Iced Tea Day – a fitting tribute to what has become a signature drink worldwide.

The 86% percent of Americans who drink tea are adding momentum with more beverage occasions and more outlets, especially convenience. Overseas the world is discovering the myriad blends of fruit and floral teas on ice. Global chains including Starbucks and Coffee Bean & Tea Leaf are introducing ready-to-drink teas to the Middle East and Asia. In America only 40% of the beverage sold in coffee shops are served cold, coffee shops in Asia and tropical countries mainly serve cold drinks.

Homemade Iced Tea with Lemons and Mint

The largest volume of iced tea is made at home but sales of tea concentrates and refrigerated teas are up. Grocers report a strong preference for the convenience of brewed teas in bottles.

Two Coca-Cola owned tea brands, Gold Peak and FUZE recently joined the exclusive $1 billion brand club. Gold Peak tea, launched in 2006, now holds 30% market share in its segment.

The entire category is up 7.4% to $3.2 billion in sales of canned and bottled tea. Market leaders Pepsi-Lipton $1.3 billion has 40% of the canned market, up 15% following a global advertising campaign. Arizona sold $890 million last year down half a percent to 27% market share.

Snapple is number three in the RTD tea market at $400 million during the 52 weeks ending March 15. Snapple holds 12% of the market.

The market for refrigerated tea is up 12% for the year to $1 billion. Gold Peak refrigerated sold $174 million in the year ending March 15, up 33%, according to IRI, a market research firm headquartered near Chicago. Red Diamond reported sales of $148 million up 3% and now holds 14% of the market. Turkey Hill is up 1.2% to $120 million a 12% with market share.

Sales of organic and Fair Trade certified teas are up. Wendy’s in May announced a national roll-out of certified organic green tea made exclusively for the chain by Honest Tea, another Coke brand. Wendy’s operates 6,000 stores and is following a path blazed by Smash Burger, which successfully began selling Honest Tea two years ago.

WTN150406_Inko's Organic White TeaTea sales ales in convenience locations continue an upward climb that has displaced soda as the thirst quencher of choice.  Fast-food burger chains like McDonalds generate more than a billion in sales of iced tea which is brewed fresh  no longer limited by regional preference. Classic sweet tea is now a staple cross the southern United States with chains like Popeye’s chicken building marketing campaigns around their sweet tea selection.

Restaurants proudly promote the health advantages of green tea and hibiscus and pomegranate flavored teas and herbals

Iced tea continues to benefit from innovation in both flavors and brewing technique. Fresh-brewed, flash-chilled tea is growing in popularity and in some locations tea even fizzes.

Carbonated beverages dominate the refreshment beverage segment representing 40% of sales globally.

Last year Starbucks introduced Fizzio in Spiced Root Beer, Golden Ginger Ale and Lemon Ale. Teavana later introduced teas which can be carbonated using the company’s Fizzio machine for an extra 50 cents.

SOURCE: Forbes and Tulsa World

Industry Insight, News
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.