Tea - US - June 2003

SUMMARY

Tea - US - June 2003

This report provides a detailed analysis of the tea market in the U.S. Bag and loose teas have experienced steady but unspectacular growth, while sales of ready-to-drink and refrigerated teas have increased rapidly over the same time period. Instant, meanwhile, has experienced a precipitous decline, as demographic shifts have deprived it of old customers, and the ready-to-drink segment captured new ones.

Among the key issues covered in this report are the disparity of performance in different segments, multicultural and multigenerational marketing strategies, health trends, demographic shifts, and domestic and imported teas and ingredients. Original research examines consumer preferences and behavior by age, gender, ethnic and economic groups. The major players in the market are scrutinized, and a six-year trend analysis predicts future growth.

Research data and analysis answer questions such as:

• How much do consumers spend on tea?
• Which countries are poised to make significant inroads in the U.S. tea market?
• Who has been most successful in the ready-to-drink category?
• How do tea-drinking habits vary by age, race, region and gender?
• Where are the opportunities for growth in this market?

This report covers teas pre-packaged in tea bags, loose-leaf varieties, ready-to-drink tea (bottled or canned), and refrigerated tea. By type, this report covers black, green, and herbal teas.

This report focuses on tea purchased for at-home consumption and purchased from food stores, mass merchandisers, and drug stores. Tea sold through other outlets such as restaurants, cafes, specialty shops, foodservice, convenience stores, and vending machines is generally for consumption away from home and is not addressed in this report.

This report contains US IRI InfoScan data.

TABLE OF CONTENTS

INTRODUCTION & ABBREVIATIONS

• INTRODUCTION
• OTHER RELEVANT REPORTS
• DEFINITION
• ABBREVIATIONS & TERMS
• Abbreviations
• Terms

EXECUTIVE SUMMARY

• A MATURING MARKET
• PREPARED TEAS DRIVE THE MARKET
• URBAN COOL VS. THE GREAT OUTDOORS
• SUPERMARKETS DOMINATE IN RETAIL
• THE TEA CONSUMER
  • Regular tea preferred by the majority
  • Coffee and tea are equally popular
  • Purchases in the last month appear to match market segmentation
  • Quality is the most important purchase consideration
• THE FUTURE OF TEA

MARKET DRIVERS

• APPEALING TO DIFFERENT DEMOGRAPHICS
  • Figure 1 U.S. population projections, by age, 2000-2010
  • Number of young adults impacts RTD and loose tea sales
  • Gen X for regular, herbal and loose/whole leaf
  • Boomers and Swing Generation need attention
  • Household composition impacts segments
  • Figure 2 American households, by race/ethnicity, 1995-2010
• DRINKING TO HEALTH
  • The benefits
  • The confusion
  • The impact
• INCREASED AVAILABILITY OF TEA AWAY FROM HOME
  • Figure 3 Average annual spending by consumer units on food and beverages at home and away from home, 1997 and 2001

MARKET SIZE & TRENDS

• Figure 4 Total FDM sales of tea, at current and constant prices, 1997-2002
• Graph 1 Trends in sales of tea, at current and constant prices, 1997-2002

MARKET SEGMENTATION

• OVERVIEW
  • Figure 5 FDM sales of tea, by type, 2000 and 2002
  • Graph 2 Share of FDM tea sales, by segment, 2002
  • Graph 3 Trends in sales of tea, by segment, 1997-2002
• BAG/LOOSE TEA
  • Figure 6 Sales of bag/loose tea, 1997-2002
• READY-TO-DRINK TEA
  • Figure 7 Sales of ready-to-drink tea, 1997-2002
• INSTANT TEA
  • Figure 8 Sales of instant tea, 1997-2002
• REFRIGERATED TEA
  • Figure 9 Sales of RTD/refrigerated tea, 1997-2002

SUPPLY STRUCTURE

• FOREIGN TRADE
  • Imports
  • Figure 10 Imports of tea, value and volume, by country/region of origin, 2000-2002
  • Exports
  • Figure 11 Exports of tea, value and volume, by destination country/region, 2000-2002
• MANUFACTURER SALES AT FDM
  • Figure 12 Manufacturer sales of tea at FDM, 2000 and 2002
  • Graph 4 FDM sales of tea, by manufacturer, 2002
• BRAND SALES BY SEGMENT
  • Bagged/loose tea
  • Figure 13 FDM brand sales of bag/loose tea, 2000 & 2002
  • Ready-to-drink
  • Figure 14 FDM brand sales of RTD tea, 2000 and 2002
  • Instant tea
  • Figure 15 FDM brand sales of instant tea, 2000 and 2002
  • Refrigerated tea
  • Figure 16 FDM brand sales of refrigerated tea, 1998 and 2000
• COMPANIES AND BRANDS
  • Unilever
  • Nestle
  • Cadbury Schweppes
  • The Hain Celestial Group, Inc.
  • Bigelow
  • Ferolito, Vultaggio & Sons

ADVERTISING & PROMOTION

• INTRODUCTION
• MAJOR MANUFACTURERS AND BRANDS
  • Lipton
  • Nestea
  • Snapple
  • Celestial Seasonings

RETAIL DISTRIBUTION

• OVERVIEW
  • Figure 17 FDM sales of tea, by channel, 2000 & 2002
• SUPERMARKETS
  • Sales
  • Figure 18 Supermarket sales of tea, 1997-2002
  • Supermarket sales and stores
  • Figure 19 Top supermarkets, by number of stores, March 2003
  • Figure 20 Top supermarket retailers, by sales, financial years ending 2002 & 2003
• MASS MERCHANDISERS
  • Sales
  • Figure 21 Mass merchandiser sales of tea, 1997-2002
  • Mass merchandiser and warehouse club sales and stores
  • Figure 22 Number of mass merchandiser retailers, March 2003
  • Figure 23 Top mass merchandiser retailers, by sales, financial years ending 2002 & 2003
• DRUG STORES
  • Figure 24 Drug store sales of tea, 1997-2002
  • Drug store sales and stores
  • Figure 25 Top drug store retailers, by number of stores, March 2003
  • Figure 26 Top drug store retailers, by sales, financial years ending 2002 & 2003
• OTHER CHANNELS

THE CONSUMER

• INTRODUCTION
• HOUSEHOLD CONSUMPTION OF TEA
  • Figure 27 Household consumption of tea, January-September 2002
  • Figure 28 Household consumption of tea, by age of race/ethnicity, January-September 2002
  • Figure 29 Household consumption of tea, by age of head of household, January-September 2002
  • Figure 30 Household consumption of tea, by household income, January-September 2002
  • Figure 31 Household consumption of tea, by region, January-September 2002
• REGULAR TEA
  • Figure 32 Household usage of regular tea, hot/cold, loose/bags, regular/decaf, by race/ethnicity, January-September 2002
  • Figure 33 Household use of regular tea, hot/cold, loose/bags, regular/decaf, by region, January-September 2002
  • Volume of tea consumed
  • Figure 34 Number of cups of regular tea drunk, mean summary, by race/ethnicity, age of head of household and region, January-September 2002
• ICED TEA
  • Figure 35 Household consumption of instant iced tea, by number of people in household, January-September 2002
  • Types of iced tea
  • Figure 36 Types of instant iced tea used, by race/ethnicity, January-September 2002
  • Figure 37 Types of instant iced tea used, by region, January-September 2002
  • Volume of iced tea consumed
  • Figure 38 Number of cups of instant iced tea drunk, by race/ethnicity, January-September 2002
• PERSONAL CONSUMPTION OF TEA
  • Figure 39 Whether tea and/or coffee are consumed, April 2003
  • Figure 40 Whether tea and/or coffee are consumed, by age, April 2003
  • Figure 41 Whether tea and/or coffee are consumed, by household income, April 2003
  • Figure 42 Whether tea and/or coffee are consumed, by region, April 2003
  • Figure 43 Whether tea and/or coffee are consumed, by race, April 2003
• TYPES OF TEA PURCHASED
  • Figure 44 Types of tea purchased, by gender, April 2003
  • Figure 45 Types of tea purchased, by age, April 2003
  • Figure 46 Types of tea purchased, by household income, April 2003
  • Figure 47 Types of tea purchased, by region, April 2003
• MOST IMPORTANT CONSIDERATION WHEN BUYING TEA
  • Figure 48 Most important consideration when buying tea, April 2003
  • Figure 49 Most important consideration when buying tea, by age, April 2003
  • Figure 50 Most important consideration when buying tea, by household income, April 2003
  • Figure 51 Most important consideration when buying tea, by region, April 2003
  • Figure 52 Most important consideration when buying tea, by type of tea bought, April 2003
• TEA CONSUMPTION COMPARED TO OTHER BEVERAGES
  • Figure 53 Consumption of selected beverages, all respondents vs. RTD tea consumers, January-September 2002
• TEEN CONSUMPTION OF RTD ICED TEA
  • Figure 54 Teen consumption of RTD iced tea, by gender, race/ethnicity, and region, January-September 2002
  • Figure 55 Teen consumption of RTD iced tea, types and brand type usage, by race/ethnicity, January-September 2002

FUTURE & FORECAST

• FUTURE TRENDS
  • Older adults younger than they used to be
  • Teen tastes will mature
  • Potential backlash against sugary drinks
  • The multicultural mainstream
• MARKET FORECAST
  • Overview
  • Figure 56 Forecast of FDM sales of tea, at current and constant prices, 2002-2007
  • Graph 5 Forecasted trends in sales of tea, at current and constant prices, 2002-2007
  • Graph 6 Forecasted trends in FDM sales of tea, by segment, 2002-2007
  • Bag/loose tea
  • Figure 57 Forecast of FDM sales of bag/loose tea, at current and constant prices, 2002-2007
  • Ready-to-drink tea
  • Figure 58 Forecast of FDM sales of RTD tea, at current and constant prices, 2002-2007
  • Instant tea
  • Figure 59 Forecast of FDM sales of instant tea, at current and constant prices, 2002-2007
  • Refrigerated tea
  • Figure 60 Forecast of FDM sales of refrigerated tea, at current and constant prices, 2002-2007
  • Forecast factors

APPENDIX: TRADE ASSOCIATIONS

APPENDIX: NEW PRODUCT DEVELOPMENTS

• CATEGORY REVIEW: RTD ICED TEA & COFFEE
  • Introduction
  • New product numbers
  • Figure 61 Number of tea product introductions, 2000-2003
  • Product trends
  • Packaging
  • Forecast/Predictions
• CATEGORY REVIEW: HOT BEVERAGES
  • Introduction
  • New product numbers
  • Figure 62 Number of tea product introductions, 2000-2003
  • Product trends
  • Tea developments
  • Formats
  • Product launches by company/brand
  • Packaging
  • Forecast/Predications
  • NEW PRODUCT BRIEFS
  • PepsiCo: Lipton Brisk Fruit Teazer Fruit-flavored Iced Tea
  • Tazo Tea: Tazo Duets Teas
  • Dr Pepper/SevenUp/Cadbury Schweppes: Country Time Iced Tea with Lemon
  • Nestle USA: Nestea New Instant Iced Tea Formulation
  • Hain Celestial Group: Celestial Seasonings Honeysuckle Peach Spring Tea
  • Oregon Chai: Oregon Chai Ready-to-drink Chai Tea Lattes
  • Trader Joe's: Trader Joe's Organic Earl Grey Tea
  • Ito En USA: Teas'Tea Green Jasmine Tea
  • Vini Imports: La Merced Yerba Mate Dietary Supplement Tea
  • Tazo Tea: Tazo Juiced Tea Tea Lemonade
  • Hain Celestial Group: Celestial Seasonings Teahouse Latte
  • Honest Tea: Honest Tea Flavor Extensions
  • Unilever Bestfoods: Lipton Chai Latta Vanilla Chai Tea Latte Mix
  • Hain Celestial Group: Celestial Seasonings Aseptic Iced Teas
  • Republic of Tea: The Republic of Tea Panda Berry Tea
  • Hy-Vee Manufacturing: HyVee Health Market Beautiful Skin Herbal Tea

APPENDIX: RESEARCH METHODOLOGY

• CONSUMER RESEARCH
  • Sampling & Weighting
  • Presentation & Definition
  • Further Analysis
  • TRADE RESEARCH
  • Informal trade research
• Formal trade research
• DESK & INTERNET RESEARCH
• SOURCES
• DEFINITIONS
• FORECASTS

APPENDIX: WHAT IS Mintel?

• Mintel PUBLICATIONS
• Mintel Services
• Product retrieval
• Retail audits
• Tailored research
• Global New Products Database
• comperemedia
• RESEARCH SUPPORT/CONSULTANCY/MIC
• The Mintel Information Centre (MiC)
• PR Research