As consumers continue to cut back their consumption of carbonated soft drinks (CSDs), they are turning to a variety of beverages. Manufacturers and retailers are both reporting a huge interest in teas and ready-to-drink  (RTD) teas.  In addition, manufacturers are picking up on the growing demand for organic teas and have started launching and marketing new product lines.

The latest data from Innova Market Insights, based in the Netherlands, indicates that manufacturers launched 157 RTD teas in the U.S. last year. Of these, 43.3% had an organic label.  A total of 1,966 bagged or loose leaf tea products were introduced and 20.9% of these also came with an organic label.

The RTD tea market has grown over 9% in the past year and reached sales of $1.3 billion. While this sector was seen as a specialty market for many years, industry leader Arizona Teas now accounts for over $333 million in annual sales. These phenomenal growth rates have attracted the interest of major beverage products firms like the Coca-Cola Company which has reported huge sales increases for its Gold Peak product, available in bulk packaging and successful in the home market.

Richard Haffner, head of global beverage research with Euromonitor International, Chicago, says marketers are relying on 2 main features when promoting their RTD tea products:  “Convenience and perceived health benefits.” Mindful of consumer interest in weight watching, marketers are also rolling out products with lower calories or those that contain cane sugar instead of artificial ingredients.

In the brewed tea market, specialty companies are also promoting products that target the health conscious consumer with messages about antioxidants, digestive health and heart health. Packaging innovation plays a role in this sector. Marketers have introduced pyramid-shaped tea bags packed with whole premium leaves.

Industry watchers believe the tea market has nowhere to go but up and new marketing campaigns will fuel this growth.

[Source: Jacobsen, Jessica. Consumers enjoy their cup of tea. Bevindustry.com. 20 Jun. 2011. Web. 5 Jul. 2011]