Sales of tea heating up in the U.S., amid economic recovery

(Dariusz Sas)

Americans are willing to pay more for products they think are healthier -- especially tea, whether in loose leaf form, in innovative tea bags or blended into ready-to-drink specialty beverages, according to Packaged-Facts, the Maryland-based market research publisher.

Americans are willing to pay more for products they think are healthier - especially tea, whether in loose leaf form, in innovative tea bags or blended into ready-to-drink specialty beverages, according to Packaged-Facts, the Maryland-based market research publisher.

Tea, which is often touted as healthy, affordable and tasty, has remained a profitable category, posting a 2 percent yearly growth in the last two years, the firm stated in the report "Tea and Ready to Drink Tea in the U.S.," which will be published December 1.

Prior to the recession, the tea market enjoyed double digit growth but sales simmered down after 2005. As new research reveals more healthful and functional benefits of drinking tea - particularly green tea - the market is poised for a rebound, according to the report.

Teas sold through retail and foodservice channels were estimated at $9 billion in 2009, a figure that's expected to increase by 5 percent in 2010 and to exceed $12 billion by 2014.

The introduction of new products, including exotic flavored teas, tea and fruit infusions and premium and novelty loose tea bags are leading the way in innovation, bolstered by social and ethical claims as well as evolving forms of publicity, like social media, the report says.

"Tea's healthfulness is still, of course, the beverage's primary appeal, but in the current market environment consumers are increasingly recognizing good quality, customized tea as a comforting, affordable premium beverage splurge," said Don Montuori, publisher of Packaged Facts, in a news release.

PepsiCo, Coca-Cola and Nestlé have also become more involved in tea products, and specialty brews continue to make their way into restaurants and coffee/tea shops like Starbucks and Peet's Coffee & Tea.

Tea beverages are also competing against sparkling waters, energy drinks and superfruit juices.

Key players in the U.S. tea market and ready-to-drink tea sector include:

Arizona Beverages: A leader in premium ready-to-drink beverages, the company partnered with Nestlé Waters North America in July 2009 with the launch of low-calorie, certified organic tea waters in a range of flavors.

Lipton (Unilever): In April 2009, the tea powerhouse, together with PepsiCo, launched the beverage Lipton Sparkling Green Tea. In May, its Rainforest Alliance-certified brand of teas was launched in the United States.

Mighty Leaf: The upscale purveyors of fine artisinal teas that were once only available in select specialty stores went after the free-spending "masstige" customer with a January 2009 supermarket roll-out.

Tazo Tea: The once-quirky brewer of specialty teas was bought by Starbucks in 1999 and it has since boosted the coffee giant's profits with a range of iced teas, juiced teas and herbal infusions.

Bigelow Tea: At the start of 2009, the 60-year old Connecticut-based company famous for its flavored teas launched a full line of flavored organic teas.

Honest Tea: Earlier this year, the bottled organic tea company launched a functional blend of green tea and mango, reportedly rich in healthful antioxidants; in 2008 it entered a partnership with the Coca Cola Company, which bought a 40 percent stake in the firm as part of its foray into the health beverages market.

http://www.packagedfacts.com/Tea-Ready-Drink-1939949/