Tea Gains Market Share at Restaurants

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Technomic, a foodservice research and consulting firm, released its 2017 Away-From-Home Beverage Study, which shows a continued increase in iced and hot tea sales.

“Beverages account for $1 out of every $5 consumers spend away from home,” David Henkes, senior principal at Technomic, said in a company press release.

Hot and cold beverages garnered $181 billion in annual foodservice sales in 2016; and tea sales represent an increasingly significant portion of the U.S. beverage market at restaurants.

Iced tea prevails in U.S. restaurant tea consumption. Iced tea accounts for 8 percent of total cold beverage sales, according to the report, amounting to roughly $9.6 billion in sales. During the last two years, consumer spending on iced tea has increased by 5.2 percent. Technomic attributes iced tea’s rising popularity to its reputation as a healthy alternative to carbonated soft drinks. Consumers perceive fresh-brewed teas as more natural than sugary beverages, and they have more variety to choose from as new flavors have made it to market in recent years. For restaurateurs, it is a highly profitable product.

Though hot tea’s sales figures are behind those of iced tea, hot tea continues to rise in popularity and represents a growing segment of the hot beverage market. In recent years, the annual growth rate of hot tea has surpassed that of the hot beverage market overall. Consumer spending on hot tea increased at an annual rate of 5.4 percent during the past two years, while total hot beverage spending grew at 4.8 percent. Hot tea is also profitable for beverage operators, reports Technomic.

Like iced tea, hot tea has a healthy connotation and presents an alternative to coffee. The launching of new tea blends offers consumers more options in terms of taste. Lately, there has also been much innovation surrounding chai. Green and black teas are still consumers’ top hot tea choices.

Green tea has gained ground, according to the report, which found green slightly edges out black tea among restaurant-goers. Its growing appeal is attributable to green tea’s beneficial properties combined with its caffeine content. Green tea sales have escalated in both iced and hot sectors of foodservice.