Americans consumed more than 80 billion servings of tea last year, which is more than 3.6 billion gallons, according to the Tea Association of the USA. It estimates these servings were worth $10.8 billion dollars – a 10.7% increase from about $9.8 billion in 2012.
The astounding growth of tea likely will not slow any time soon, according to the Tea Association, which predicts tea sales will double in the next five years.
Health claims drive growth
A driving force behind this growth is increasing consumer interest in health and consuming better-for-you products, explained Michelle Debruyn, digital marketing and PR coordinator at Numi Organic Tea.
“There has been a big shift in focus to health, and tea brings a lot of different health properties depending on which type you drink, when you drink it and how you drink it,” she explained.
In response, Numi offers blends of several teas that are associated with health benefits, including its most recently launched line of Turmeric Tea, which hit stores shelves in late 2013.
While the company does not make any health claims on the four turmeric teas, Debruyn explains the root is a balancing ingredient for Ayurvedic diets and is known for easing inflammation.
Numi also launched a line of four Indulgent Teas that combine the rich taste of ground cacao beans with Earl Gray, mint, spices and rooibos for a “guilt-free” treat that is ideal for people watching their weight or reducing their sugar intake because they are calorie- and sugar-free, Debruyn said.
Tea offers new experiences
Consumers also are increasingly turning to tea because they seek new experiences and flavors and are drawn to the craft of brewing tea, said Kristina Richens, minster of commerce at The Republic of Tea.
The Republic of Tea constantly launches innovative blends and tea products to capture consumers attention, she noted. For example, in April it launched a line of three iced teas made from fine wine grape skins. The line of Sonoma Teas include Sonoma Chardonnay, made from pressed chardonnay grap skins, Sonoma Rose, from pinot noir and sauvignon blanc grape skins and Sonoma Cabernet, from cabernet sauvignon grape skins, Richens said.
She explained that the Sonoma Teas come in large pouches so they can be made by the pitcher – which positions them as an easy, healthy alternative to soda, juice and alcoholic beverages at parties.
In September, the company will expand the line with the seasonal launch of Mulled Zin Hot Tea, which combines warm spices of cinnamon, ginger, cloves and orange zest with herbal tea made from zinfandel grapes.
An alternative energy drink
Consumers desire for natural energy sources also is driving the growth of tea sales, and The Republic of Tea is meeting this demand with a line of Hi Caf teas.
“Our strategy here was to give a healthy antidote to some of the ways you can get caffeine,” Richens said. She noted that each tea has a distinct amount of caffeine labeled on the back of the product tin, so consumers can knowledgably consume the amount they want.
She adds that because the caffeine in tea is absorbed more slowly than through coffee, consumers can access the energy without becoming jittery.
Ready to drink tea is exploding
Demand for ready to drink tea also is growing with sales increasing more than 15 fold in the last 10 years to $5.2 billion in 2014, according to the Tea Association of the USA.
Newcomers to this space include Arteasan, a brand that launched 10 months ago, but which already won two awards for its packaging, according to Corina Flushing, engagement manager for Arteasan Beverages, LLC. She noted the teas, which are slightly sweetened with stevia and agave are low-calorie and low-sugar alternatives to juices and sodas.
Sound Sparkling Tea also entered the market in mid-April and is distinct from other ready-to-drink teas because it is carbonated, said Tommy Kelly, company co-founder. He is positioning the tea not as a competitor for other teas, but rather as a flavorful alternative for seltzer water drinkers who are turned off by soda-like mixers.
As the tea category continues to grow and become more crowded, distinctive claims, packaging and positioning, such as those demonstrated by these companies, will become increasingly important. But for a while at least, it is clear from projections that consumption will grow quickly along with the number of products and players in the space.