Tea is trending in a big way, with everything from tea tablets to creamy tea lattes hitting the market. As specialty tea and its corresponding products continue to rise in popularity, consumers everywhere will be reaching for a cup, bottle, or single-serve pod of the fine-leaf beverage.
According to Euromonitor International, the United States tea market now has a retail value of $43.1 billion. It has experienced a 7.7 percent compounded annual growth since 2009, and has seen $13.3 billion in absolute retail value growth since 2009.
“One of the things we’re noticing in the United States is non-traditional patterns of consumption that are driving tea trends,” said Howard Telford, Euromonitor’s senior tea analyst. Telford points to everything from consumers being more experimental in their beverage consumption habits to functional teas with health claims as drivers for the renewed interest in tea.
Numi Organic Tea co-founder Reem Rahim also believes changing lifestyles and a greater focus on health and wellness are encouraging a greater interest in tea beverages.
“The health benefits of tea just keep expanding and expanding,” she explained. “That trend has not gone away; it’s only increased.”
It’s more accessible than ever, too, said Dorothy Arnold, vice president of marketing for Stash Tea Company. “Tea is more widely available today in many more store formats,” she said, “not only traditional grocery, natural foods, and specialty stores, but also drug, mass merchandisers, and … online.”
Specialty tea has also overtaken the total tea market in the U.S., according to the Specialty Food Association’s 2015 “State of the Specialty Food Industry,” with 51 percent of all sales in the segment being specialty products. Specialty tea grew in sales by 16.1 percent since 2012, and compared with 10 percent growth for all teas in the same period.
Convenience Tea
Once reserved for the coffee crowd, single-serve pods have been making a major dent in the tea market. Dan Bolton, managing editor of STiR Tea & Coffee International, told delegates at last month’s World Tea Expo that he expects single-serve capsules to account for 10 percent of all loose-leaf tea sales in the U.S. in 2015.
Both Numi and Stash recently introduced single-serve cups to their product lines, with Numi’s RealCup packaging being among the first semi-recyclable single-serve options on the market.
“That convenience factor is something that consumers are certainly interested in,” Telford said, “[though] it remains to be seen whether that’s a long-term phenomenon.”
Ready-to-drink tea beverages are also gaining exposure, with many claiming to offer health benefits and a quick pick-me-up. Martha Stewart has partnered with Ulivjava on a line of functional iced coffee–style beverages made from yerba mate and green tea, with guayusa and ginseng. New styles and flavors of bottled iced teas from well-known brands are also driving sales of RTD teas, Telford said.
Bottled tea lattes have piqued Telford’s interest, especially a version from Ito En, which he describes as less sweet than typical bottled teas. The product offers a good combination of health benefits and a slight indulgence for consumers, he noted.
Zilla Tabs’ Teablets were highlighted at the World Tea Expo in May, promising a perfect cup of tea from a tiny tablet. A high-pressure process compresses chopped tea leaves into a tablet form, which dissolves in hot water to create the brew.
New Tastes, Types, and Flavors
With a larger variety of teas hitting the market, new flavors and old favorites are picking up in popularity. Telford predicts teas like oolong, as well as others that American consumers may be less familiar with, will go more mainstream, and standard black teas will get a boost from exotic fruits to make them more appealing to a younger audience.
Many tea companies are playing with bold flavor profiles, with everything from chocolate and pomegranate to acai and turmeric being added to tea sachets.
“People are just being a lot more explorative with their taste buds when it comes to beverages,” Rahim said. “That exploration is going into hot water as well.”
Numi recently launched a line of turmeric teas, which Rahim said are exploding in the market. Two Leaves and a Bud is touting a line of tart and sour teas, including tart berry, tart Meyer lemon, and tart blood orange.
Staying relevant in the tea game today means keeping things innovative and fresh, Telford advised. “It’s an ultra competitive segment,” he said. “You really have to find a way to differentiate your tea brand on the shelf.”