Tea Innovations That Move the Needle

Dan Bolton

Seventy-three percent of consumers report they are always willing to try something once, but true beverage innovations result in reorders, not one-offs.

Manufacturers and retailers understand that innovation only matters if it moves the needle toward profitability, either by leading to more sales from existing customers, enticing new customers to buy or both.

Everett M. Rogers’ pioneering theory on the Diffusion of Innovations (1962),  showed that while invention comes from the lab, innovation is driven by users. A few individuals first adopt the invention, then spread the word among their circle of acquaintances—a process which typically takes months or years, writes Rogers.

In the West, specialty tea is still trudging through the early stages of adoption, a period when people seek out others like themselves who have already adopted the nuances of selection and practice new methods for preparing tea.

But there are exceptions. Use of the internet, for example, has spread more rapidly than any other innovation in the history of mankind.

This, in turn, has sped up the acceptance of new beverages.

Lightly carbonated “sparkling” beverages reached a value of $1.8 billion in 2017, double the amount sold in 2013 and triple that of 2010, when a little-known bottler in La Crosse, Wisconsin, first noticed a spike in sales of its flavorful $6 12-packs of healthy fizz.

National Beverage, the company behind the pastel colored cans of seltzer, reported last year that sales of La Croix grew to $827 million from $646 million in 2015. Annual profits top $100 million.

As reported by Fortune magazine: “How does a line of sparkling, lightly-flavored canned waters inspire parody pieces, rankings, Halloween costumes, pop art, cocktail guides and, yes, even a New York Times endorsement? The short answer: fortuitous timing plus savvy marketing.”

Success inspires imitation. In January Diet Coke launched Ginger-Lime, Zesty Blood Orange, Twisted Mango, and Feisty Cherry seltzer water. PepsiCo launched Bubly in February with a rather pedestrian range of flavors that include Limebubly, Grapefruitbubly, Strawberrybubly, Lemonbubly, Orangebubly, Applebubly, Mangobubly and Cherrybubly.  In March, San Pellegrino (Nestle) launched sparkling tea in two flavors: Frizzante Limone+tea and Pesca+tea (peach).

Meanwhile La Croix Cúrate (COO-rah-tay) just introduced Pĩna Fraise, Pomme Bayá and Cerise Limón alongside its popular Pamplemousse (21 exotic flavors in all).

Influencing Micro-influencers

“Highly engaged customers are incredibly valuable, purchasing 90 percent more frequently than average customers and spending 60 percent more per purchase,” according to Ilya Pozin, at Pluto TV. Innovation is critical, “half of your customers will choose a new brand if a business does not anticipate their needs,” he said.

While the tweets of internet celebrities reach millions, La Croix is a convincing example of how just a few thousand highly motivated fans engage their personal network. When marketers find ways to excite these micro-influencers―remarkable results follow.

Will this work in tea?

Innovation is not an event. It must be made part of everyday business life for a firm to keep ahead of the change curve in a volatile, dynamic environment. Continuous innovation creates a virtuous circle that has kept La Croix from falling by the wayside as the big bottlers move in.

Tea suppliers can expect the same passionate engagement once they achieve critical mass.

Rogers describes the tipping point in terms of market share. “Innovators” comprise 2.5 percent of the market with “early adopters” accounting for 13.5 percent. But it is not until the “early majority” adds the weight of its 34 percent share that the competitive game gets really interesting. A “late majority” (also 34 percent) converts at the peak of saturation with “laggards” (16 percent) eventually following.

The initial target must include but is not exclusively innovators. This is because they are a broad category flitting between any idea, practice or object that is perceived as new, according to Rogers.

The role played by early adopters, as individuals and clusters within social networks, is critical. It is their enthusiasm for a product, combined with their use of communication channels that makes it possible for diffusion to occur.

Innovation initiates and fuels the cycle.

No Need for Magic

Innovation is not some genius-inspired, high-wattage headlamp that shines the way to success. Innovation is learned—and not limited to the gifted few. It is simply an effective approach to problem solving. Resolving difficult problems is often more a matter of iteration than innovation.

The two are closely aligned.

Kevin Ashton, author of To Fly a Horse has written a quite extraordinary book dispelling many myths about innovation. In its 336 pages he eloquently describes the most important aspect of successful innovation, the realization that creation is a result—a place that thinking leads us.

“When you say someone is a creative thinker you are praising the result of their thinking, not some magical process,” he explains. “The root of innovation is the thought: ‘I can make this better.’”

“The creativity myth implies that few people can be creative, that any successful creator will experience dramatic flashes of insight and that creating is more like magic than work,” writes Ashton. “A rare few have what it takes, and for them it comes easy. Anybody else’s creative efforts are doomed. How to Fly a Horse is about why the myth is wrong.”

Together Let’s Solve the Tea Industry’s Most Pressing Problem

Here is a simple exercise asked of participants attending the World Tea Expo presentation Retail Innovation: The Case for Tea Authenticity and Why Retailers Should “Be More Tea.”

PROBLEM: Each day insufficient numbers of commodity tea drinkers sample and hear the story of fine tea. This is because customers patronizing specialty tea retailers already understand the many benefits and pleasure of tea.

What can you do to identify and encourage occasional tea drinkers to discover and convert to specialty tea?

Popups are something to consider. Here are recent example created by tea firms large and small:

Industries that embrace innovation are more resilient to changing market conditions. Ashton writes that “creation is a destination, the consequence of acts that appeared inconsequential by themselves, but when accumulated they change the world.”

During the next week, think of other examples of what the tea industry can do together to introduce large-scale sampling.  Jot them down for discussion during the presentation Wednesday, June 13.

World Tea Expo logo

 

Retail Innovation: The Case for Tea Authenticity and Why Retailers Should “Be More Tea” By Dan Bolton, President, Mystic Media Custom Publishing. This session introduces attendees to the Information Supply Chain, how to be authentic, storytelling and creative problem solving. 11:30 a.m.-12:40 p.m. Wednesday, June 13, room 230