Customers proceed to achieve for his or her cup of tea. Primarily based on knowledge from Chicago-based Circana, the general bag and loose-leaf tea market noticed greenback gross sales improve 2.6%, totaling $1.7 billion, for the 52 weeks ending April 20. Quantity gross sales additionally elevated barely at 0.9% throughout that point.
When it comes to segments, luggage and loose-leaf tea fared higher than single-cup tea with luggage and loose-leaf tea gross sales up 3.6%, with greater than $1.6 billion in gross sales, in contrast with single-cup tea gross sales down 17.2%, totaling $64 million.
The moment tea mixes class additionally has struggled with gross sales down 1.2%, totaling $514 million with quantity gross sales down 5.1%.
For canned and bottled tea, greenback gross sales have been flat totaling $4.8 billion, but quantity was down 3.3%.
One class that fared nicely, although, was refrigerated teas, which noticed gross sales up 5.1%, totaling $1.7 billion with quantity up barely at 0.5%.
Paige Leyden, analysis supervisor of foodservice for the U.S. at Chicago-based Mintel, wrote in its 2024 report “Tea and RTD Tea – US” that tea’s gross sales achieve has come whereas quantity declines have continued.
“Tea has posted regular greenback gross sales good points in recent times. Nevertheless, a more in-depth look reveals the good points are a results of worth will increase amid a local weather by which shoppers are consuming much less tea,” Leyden famous within the report. “Manufacturers should keep away from alienating customers via continued worth hikes, particularly contemplating they’re lukewarm on their enjoyment of tea style.”
The diversion of efficiency throughout the tea class might be attributed to shoppers perceptions of well being advantages.
Within the Tea Affiliation of the united statesA. Inc.’s most up-to-date Tea Reality Sheet, it notes this, amongst different product attributes that contributed to the class’s efficiency in 2024.
“Customers drank tea to ease stress, loosen up, calm, and heart themselves,” the Reality Sheet states. “Moreover, analysis validating tea’s means to spice up immune programs actually helped, as did a current peer-reviewed paper on bio-actives in tea highlighting tea as the very best supply of those necessary compounds.”
Roger Dilworth, senior analyst at Beverage Advertising Company (BMC), Wintersville, Ohio, famous in Beverage Business’s June concern that the wellness facets of tea have been well-documented, however the ready-to-drink (RTD) section has different attributes which have counteracted these facets.
“A few of the health-and-wellness attributes of tea appear to have been accounted for already, i.e., the targeted vitality of l-theanine and caffeine that tea brings to the desk,” he mentioned. “RTD teas are sometimes sugar-laden, which counteracts a few of the well being message. And those which have much less sugar are doing satisfactorily however have but to ignite the RTD tea section.”
Nevertheless, Mintel’s Leyden famous that with regards to tea’s attributes, producers have a possibility to increase the standard facets that customers would possibly affiliate with the class.
“Tea drinkers usually tend to affiliate tea with leisure and luxury than as a supply of vitality,” she acknowledged within the report. “Whereas leisure is necessary, given the prevalence of stress in fashionable instances, there’s additionally alternative to advertise tea as a viable choice for reinforcing productiveness and clear focus.”
Leyden additionally wrote that among the many prime claims throughout the section, environmental stewardship will be seen all through.
“Whereas this moral method is admirable, shoppers are extra apt to hunt a private profit first,” she wrote within the report. “Particularly amid instances of worth hikes, manufacturers can extra straight show worth via private profit.”
This all comes after the FDA launched in December 2024 its closing rule on the usage of “wholesome” on meals labels. The meals and drinks that qualify to bear the declare meet limits on added sugar, sodium, and saturated fat, primarily based on Day by day Worth suggestions throughout the Dietary Pointers for People 2020-2025.
Sure tea merchandise, together with tea luggage and bottled tea, can now show the “wholesome” declare on packaging, offered they include lower than 5 energy in every 12-ounce ounce serving, in response to the Tea Council of the USA Inc.
“We’re thrilled that the FDA’s new ruling formally acknowledges unsweetened tea as a ‘wholesome’ alternative,” mentioned Peter Goggi, president of the Tea Council of the USA, in a press release on the time of the announcement. “For many years, we’ve identified that tea delivers vital well being advantages, and now shoppers can extra simply establish it as a ‘wholesome’ alternative proper on the label. This designation not solely validates tea’s position in a balanced weight-reduction plan, however may even encourage extra People to achieve for this naturally refreshing, calorie-free beverage.”
Taste focus
Because the tea market may gain advantage from the usage of “wholesome” for unsweetened merchandise, analysts notice that addressing taste and sweetener utilization performs an element within the improvements for this class going ahead.
In Beverage Business’s June concern BMC’s Dilworth famous earlier, for RTD tea, sugar discount traits have a had a unfavorable affect on the section.
“If something, the sugar discount traits have prompted some shoppers to exit the class altogether in favor of PET water, glowing water and practical drinks,” he mentioned.
Dilworth additionally highlighted the contributions of out-of-home and specialty teas.
“There’s a glimmer of hope with tea cafés which have revolutionary tea drinks reminiscent of boba tea and ‘cheese’ tea,” he mentioned. “As soon as confined to Asian enclaves, these cafés appear to have grown in quantity in white suburban areas, at the very least in some pockets of the nation.”
Dilworth added that mate tea has proven a rising reputation, however has not established itself within the RTD area.
Embracing taste additionally might be a method for tea producers going ahead.
“Fewer than 40% of tea drinkers price the commonest kinds of tea as a style they get pleasure from,” Leyden wrote in Mintel’s report. “Provided that taste leads meals/drink alternative, the class should increase its style notion with a view to compete with different drinks. Tea introductions that rating highest for ‘tasty’ promote daring flavors, sweetness, and acquainted ingredient blends.”
Prepared-to-drink tea manufacturers although are addressing taste and sweetness in artistic methods.
Honest Hills Farm Organics introduced the launch of its Natural Black Tea line, a ready-to-drink assortment of teas naturally sweetened with cold-pressed apple juice produced from the farm’s personal fruit.
The brand new line consists of 5 blends: Unique Black Tea, Black Tea & Chamomile, Black Tea & Mint, Black Tea & Cinnamon, and Black Tea & Ginger. Every tea is crafted with out added sugars or synthetic substances, providing a gently candy, fruit-forward profile that highlights the integrity of its substances, the corporate says.
Lipton is also leaning into the hybrid method with its Lipton Fusions Lemonade Iced Tea, which mixes crisp lemonade with Lipton Iced Tea and pure fruit flavors, with 50% much less sugar than common sodas, the corporate says. The brand new releases can be found in Strawberry Lemonade and Pineapple Mango Lemonade in 16-ounce cans nationwide.
The Tea Affiliation of the united statesA. additionally factors to taste as among the many attributes that the tea class can supply shoppers to assist it rebound following the affect skilled from COVID and provide chain points in 2022-2023.
“Tea’s selection, comfort, well being advantages, sustainability efforts, availability, continued innovation, and the invention of distinctive, flavorful, and high-end specialty teas will proceed to offer the gasoline,” the Reality Sheet states. “Lengthy-term success depends on the continued adoption of tea by new shoppers who consistently search wholesome meals and beverage decisions. We’re seeing this precise habits, notably from millennials, Gen Z’s, and child boomers.”
