Everyone in tea will want to study the American Botanical Council’s newly released Tea Market Report. It is the most thorough analysis of the American tea industry sales by channel I’ve seen. The report, which appears in the November issue of the American Botanical Council’s HerbalEgram, is authored by Sage Group principal Brian Keating and ABC Executive Director Mark Blumenthal with Ash Lindstrom and Mary Ellen Lynch, SPINS director of consumer insights.
Sales of tea (loosed, bagged, concentrated and herbals) grew by 5.9% in the U.S. in 2013 reaching $1.7 billion while ready-to-drink teas in mass market, natural and specialty gourmet channels remained flat at $2.4 billion compared to 2012. Total RTD sales including convenience are estimated at $5.1 billion in the report which cites a Canadean study predicting RTD tea will grow by 6% to $5.3 billion in 2014.
The authors predict “a banner year” for both brewed and RTD tea sales in 2014.
The significance of their work is the breadth of sales channels covered. Herbals and medicinal teas are tallied as well as chai and Rooibos. These are important, fast-growing categories that can be difficult to research.
Chai in bags grew 21.4% compared to 2012 across all channels while Rooibos sales are up 3.5% in bags and 11.1% in loose leaf.
ABC’s first tea market report includes 12 tables covering mainstream, multi-outlet, natural and specialty/gourmet channels along with details on niche categories that include organic, Fair Trade teas and non-GMO labels.
“More impressive than the current size of the tea industry is the fact that, for more than a decade, annual sales totals … have grown consistently in the United States with very few types of tea showing anything other than consistent gains,” wrote the authors. “The onslaught of hundreds of new retail tea outlets — and thousands more projected to open in the next few years — parallels the germinal stages of the fledgling US natural foods industry circa 1980-2000.”
A significant advantage to this report is that it brings to light data on the herbal segment. The top selling herbal is chamomile with 2013 sales of $48 million, followed by mint infusions which earned $35 million and ginger which brought in $3.8 million, a distant third. Medicinal tea in bags enjoyed sales of $177 million.
Even packaging is documented with sales in cardboard boxes accounting for $1.1 billion of all tea and canisters grossing $276 million. Conventional packaging is challenged by tea in capsules and pods which saw a 32.8% increase in sales in 2013 to $138 million surpassing packet tea for the first time.
ABC plans to present its 2014 annual tea market report in HerbalGram issue #105 (January-March 2015).
Shared with permission from the Tea Biz Blog.