RTD Tea Growth Tops Bottled Water

NEW YORK, NY

Bottled and canned tea outpaced bottle water last year, growing by 4.8 percent in volume as Americans consumed 29.5 billion gallons of liquid refreshments.

Refreshment beverage volume, calculated by the Beverage Marketing Corp., was up slightly (.9%) over 2010 as the market continues its shift away from carbonated sodas which are down for the seventh year to 46 percent share.

“Last year marked the second year of growth after two consecutive declines, but it also represented a slowdown from 2010,” according to BMC’s Gary Hemphill, Sr. Vice President for Information Services. He said that higher prices contributed to 2011’s deceleration as lower–income consumers continued to struggle.

“Cold tea remains hot,” said Hemphill. “The RTD category continues to experience solid growth in the U.S.  Strong positioning and solid innovation have helped to boost its growth,” he said.
“The category’s positioning appeals to a growing number of Americans who want healthier refreshment.  Furthermore, innovation abounds with a multitude of flavored teas and expansion of various types of tea in the RTD format,” he said.

Liquid RefreshmentEnergy drinks, ready-to-drink tea and sports beverages grew aggressively despite higher prices.

“Premium beverages such as ready–to–drink (RTD) tea and coffee, sports beverages and energy drinks advanced particularly forcefully during 2011,” said Hemphill, adding that “Larger, more established segments such as carbonated soft drinks and fruit beverages failed to grow once again.”

Energy drinks moved forward faster than all other segments with a 14.4% volume increase in 2011. Despite this advance, the segment accounted for a relatively small share of total liquid refreshment beverage volume. Indeed, the only liquid refreshment beverage type with a smaller share of volume was RTD coffee, which charted the second fastest surge, growing by 9.4%. Not surprisingly, no energy drink or RTD coffee brand ranked among the leading trademarks by volume.

Sports beverages, in contrast, had Gatorade (including all brand variations) as the fifth largest beverage trademark during the year, and the category it led showed exceptional vigor. The brand topped 1 billion gallons for the first time in 2011.

Carbonated soft drinks still stood as by far the biggest liquid refreshment beverage category, but they continued to lose both volume and market share. Volume slipped by 1.7% from 13.8 billion gallons in 2010 to 13.6 billion gallons in 2011, which lowered their market share from 47% to 46%, said Hemphill. “Nonetheless, certain soda trademarks, such as Dr Pepper and Coke Zero, did achieve growth. Moreover, carbonated soft drinks accounted for four of the 10 biggest beverage trademarks during 2011, with Coca–Cola and Pepsi–Cola retaining their usual first and second positions,” he said.

Bottled water had three entries among the leading trademarks in 2011. Like the beverage marketplace as a whole, bottled water declined in 2008 and 2009 but recovered in 2010, when volume grew by 3.5%. Unlike liquid refreshment beverages generally, bottled water’s growth accelerated in 2011, when volume swelled by 4.1%.

Four companies accounted for all of the leading refreshment beverage trademarks. Pepsi–Cola had four brands, including the only fruit beverage brand to make the list, Tropicana. Coca–Cola had three while Nestlé Waters North America (NWNA) had two and Dr Pepper Snapple Group (DPSG) had one.

“The strong showing by high–end and functional products shows that consumers — at least the more affluent ones — are not concerned exclusively with economic considerations when making their beverage selections,” said Michael C. Bellas, chairman and CEO, Beverage Marketing Corporation, the leading research, consulting and financial services firm dedicated to the global beverage industry.

Overall Refreshment by Brand

Source: Beverage Marketing Corporation

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