On April 2, a class action lawsuit was filed against AriZona Beverages in the United States District Court for the Eastern District of New York by two consumers who claim the popular tea labeled “Green Tea with Ginseng and Honey” does not actually contain ginseng. This lawsuit is an impetus for consumers to examine what is really in tea.
The main selling point for this particular tea is its ginseng content. AriZona’s website claims its Green Tea with Ginseng and Honey is “America’s best-selling green tea,” and goes on to say, “Ever wonder how it became so popular? 100% natural green tea. Just the right amount of ginseng and a touch of delicious Sue Bee Premium Orange Honey.”
The plaintiffs, Kalesha Niles and Jason Lahey, accuse the tea company of mislabeling its product, which would constitute common law fraud, deceit and unjust enrichment/restitution if found guilty. The ingredients list has ginseng extract. However, two food safety labs tested the tea and found zero evidence of any trace of ginseng.
This raises the question: What constitutes “ginseng”? A search for ginseng extract on eBay yielded four thousand results. There is wild ginseng, American (the best) and Korean; white, which is lower in therapeutic constituents; red, steamed and then dried; ginseng leaf; many plants carrying the name but not part of the panax genus: Siberian, Peruvian, female and five-leaf. The AriZona label simply states “extract.”
The company similarly lists “premium green tea”—more vague terminology that does not correspond to any established international classification of tea categories.
Then there are the sweeteners. These have been the base of the appeal of ready-to-drink teas, whose main competition has been sodas rather than other teas. The ginseng tea comes in cans, bottles, jugs, and bags, as powder, liquid or tea stix. AriZona offers its gingseng tea varieties with “natural sugar”, sugar-free, sucralose artificial sweetener, Splenda, acesfulfame posassium additive, and high fructose corn syrup. None of these contain a ginseng specification beyond “extract.”
The lack of clarity and specificity of the ingredients may not be an issue for a low-end, mass market consumer item. On a sales level, AriZona has been meeting a market demand in a fiercely competitive market and is a leader in its packaging, distribution and process management. Even in 2019, its iced tea sells for 99 cents for a 23-ounce can—a price it has maintained for more than 20 years. The centrality for RTDs of the convenience and price draw is signaled by the constant references to its being sold as a gas station staple in addition to grocery stores.
Its buyers appear to love the tea, which gets very high reviews from its large customer base: 4.7 out of 5.0 from 2,800 people on Amazon. That is just a weathervane indicator, of course, but other sites rate it even higher. They do, though, include recurrent comments about the ginseng being hard to detect. Which brings up the court case—the plaintiffs say the ingredient is not there at all.
Obviously, consumers are not the judge or jury in the court case. But they take on the role when choosing a tea and should at least know what they are buying, particularly in such a prominent market segment.
The RTD market is not only the fastest growing segment but marked by a focus on the three main driving forces in innovation: (1) Attract customers through the appeal of wellness, (2) Expand their range of exploration and willingness to pay a premium for premium teas (RTDs are the only market segment where prices are growing faster than volumes). (3) Retain them through transparency along the entire bush to cup supply chain.
The AriZona case is about all three of these; the claim of wellness from green tea and energy-boosting ginseng, the appeal of the new flavor of the ginseng and the Sue Bee Honey extract (which is premium and natural in all regards) and the lack of transparency in the marketing and labeling.
Consumers want to know what they are paying for and drinking.