Sales ofsparkling teas marketed as “good for you” are bubbling.
Thecategory launched decades ago but remained a small, slow-growing niche throughthe early 2000s while carbonated sodas (CSD) dominated the market for refreshmentbeverages.
Thatlandscape changed with the realization that sugar-saturated sodas wereunhealthy. Consumers, in large numbers, abandoned CSDs in an accelerating trenduntil volumes had declined to 30-year lows.
Troubleis, everyone missed their fizz.
Sparklingwater brands including La Croix, Spindrift, Sparkling ICE and Topo Chico helpedfill the void along with tea entries launched nationally by PepsiCo and Pellegrino.
Meanwhile,reformulations and price increases kept revenue from falling as the top fivebottlers developed healthy alternatives to CSDs, primarily flavored waters. Sparklingwater surged 16.1% in 2017 according to IRI and was up 14.5% last year to morethan $3 billion.
Duringthe past year PepsiCo and Coca-Cola managed to halt the slide by introducingproducts like Bubly, a sparkling fruit flavored beverage on track to reach a $1billion in sales. FoodNavigator reports that “while unit sales of regularsoda are still in negative territory (down -2.7% in the past year), they edgedinto positive territory (+0.1%) in the last year) for diet soda.” The trend isled by Coke Zero Sugar and PepsiCo’s Bubly.
Iced teasin bottles and cans annually account for $3.1 billion in sales in multi-outletstores, according to Nielsen market research. Growth has been modest, averaging2% in recent years. The category is down -0.7% for the year except in thenatural retail channel where market research group SPINS reports sales growthof 12.4% for the category.
The keyto maintaining growth is to move beyond “no-sugar” with ingredients that eitherpromote health or offer condition-specific claims.
Healthyresurgence
Spadeworkby tea innovators set the stage for the emergence of sparkling tea brands.
Teatulia organic tea began selling a sparkling tea at its Denver tea bar in 2012. “Our handcrafted Tea Soda has been our No. 1 best seller from the day they were introduced,” according to the company. The tea recently received a “Great Taste Award” from Tea & Coffee Trade Journal and praise for its colorful tins by Thirst Craft.
This yearfounder Linda Appel Lipsius decided to capture the magic in cans. The neworganic line includes black tea with pineapple, peach, lime and cucumber.Lemongrass tea with wild berry, lime and lavender, a green tea with blackberry, lime, cilantro and peach and a mint tea blend.
“Our teacomes from our own organic tea garden in Northern Bangladesh. This is totallyunique to the tea industry in the United States. Why is it important? It meanswe're able to control every aspect of how we treat the tea, the land it’s grownon, and the people who cultivate it,” according to the company.
“Whereand how your tea is cultivated makes all the difference in its taste andquality, as well as its overall impact on the planet and its people,” saysAppel Lipsius.
In 2015 PepsiCo and Unilever teamed up to distribute LiptonSparkling Iced Tea in peach, raspberry and lemonade. That year saw volume fall 1% to 6% for Coke,Diet Coke, Pepsi and Diet Pepsi. Pepsi suffered the steepest decline asdrinking diet sodas to lose weight became suspect due to concerns aboutartificial sweeteners. Sales of ready-to-drink tea spiked as soda declined butmuch of the tea sold at that time contained sugar, artificial color and flavor.Bottled water emerged as the healthiest option and is now the No. 1 beverageproduct in the U.S. by volume, according to the International Bottled WaterAssociation.
Last yearTeavana introduced two sparkling teas, a blackberry lime green and a peachnectarine green tea and has since expanded the line to include a sparklingblood orange mango white tea. Starbucks and Anheuser-Busch jointly manufactureand distribute these premium “craft teas” which sell for $2.39 per bottle.
Below areseveral brands that are successfully expanding the category.
- Sound tea, launched in 2015, describes its products as tea-infused sparkling water. The teas are unsweetened, certified organic with natural flavors and no preservatives. The line includes chamomile, white tea, green tea rose tea and yerba mate blends popular in health food stores.
- Minna Sparkling Tea is a lightly brewed blend with low caffeine. Flavors include Tropical Green Tea with pineapple and passionfruit, a decaffeinated Citrus Black Tea with orange peel, mango and Lime Hibiscus Tea combining rosehips and hibiscus.
- Sun-Rype is based in Kelowna, British Columbia, Canada. Among its diverse product offerings is a line of sparkling teas. The canned teas are brewed with a little sweetness and only 90 calories. Sun-Rype’s line includes Black Tea with a Twist of Lemon, Black Tea Mango Peach, Green Tea Honey Lemon and Rooibos Tea Raspberry.
- Sparkling ICE is based in Preston, Wash. Flavors include Lemon, Peach, Raspberry and Half & Half. The teas are sold in plastic bottles, so they are great for people with active lifestyles who want to drink their sparkling tea on-the-go.
Competingwith these brands are a fast-growth segment of functional teas. Zest Tea High Caffeine Energy Tea contains more caffeine than coffee, paired withL-Theanine. Founded in 2014, the company was a World Tea Expo new productwinner in 2015. Zest is a pacesetter in the natural food channel, the mostcommon pathway to mainstream distribution.
Cham ColdBrew Tea takes tea a step further by pioneering a better way topreserve the goodness of tea before adding functional ingredients.
Cham isnever heated. It is a functional tea with claims to revitalize, calm or defend(antioxidant). Like all the new entries it contains little or no sugar (fromhoneybees), no preservatives and is cold pasteurized. Flavors includehoneybush, apple, hibiscus with rosehip and raspberry and chamomile lemon (withreal honey) and Ironwort, known as mountain tea, imported from Greece.
The company explains that “Steeping tea incold water over a long period of time produces a superior tasting tea that issmoother, less bitter and truer to its original flavor profile. Additionally,cold brewing helps preserve as many naturally occurring benefits that heat intraditional brewing can deteriorate.”
The brand addresses the market-eagerchallenge of freshness by offering seasonalbottlings, the latest is a black tea lemonade with ginger root called the“Ginger Palmer.”
Seasonal teas will prove even more popularmarketed as freshly picked, cold-brewed and bubbly.
Sources: FoodNavigator, BevNet