Cool or brisk, RTDs are making a splash in the tea industry.

Whether it's Nestea Cool, Lipton Brisk or Tetley Splash, Ready To Drink Teas are stacking momentum in the race for cold drink sales. To be specific, cold fill process (as opposed to hot fill) is the fastest growing category in RTD teas. In 1992, this writer reported the RTD tea niche was a $600 million category. Today, it's close to $2 billion, and despite a dip in sales in 1994, still averages an annual growth rate of approximately 60%. Those figures represent the U.S. Just think of the potential exploring worldwide markets!

The hot story in the industry, according to John Sicher, Publisher/Editor, Beverage Digest, is the cold fill process.

Sicher reports, "Cold fill is sold like soft drinks and are therefore displayed in the soft drink sections in all distribution channels." The following figures were reported by Sicher and are based on data from August 1995- August 1996:

The two categories indicating the most potential are the two cold filled teas, Lipton Brisk and Nestea Cool. While distribution plays a key part in this success, the cold fill process enables the teas to be packaged in cans and sold in multiple units. Coca-Cola Co. distributes Nestea Cool in partnership with Nestle Beverage Co., while Pepsico, in partnership with Unilever's Thomas J. Lipton Co., is the distributor of Lipton Brisk. Snapple, which was a industry leader early on, is in third place, but maintains a strong position in convenience stores and gas stations. In addition to Snapple, other premium tea leaders are Arizona, Mistic and Celestial Seasonings (iced herb teas). As of this report, Snapple, Arizona, Mistic and Celestial Seasonings produce single serving units in glass bottles using the traditional hot fill method.

Leading the "packs" is Lipton Brisk, a product from the Pepsi-Lipton Tea Partnership. According to Gary Yoshioka, marketing manager for Lipton Brisk, the brand is double the size of Nestea Cool. Riding on the tea's 100 year brand accomplishments, Brisk achieved recognition the moment it filled the Lipton can. With the Pepsi partnership, the team has been able to design products and create taste preferences for their target market, adults 18-34. Their focus, reported Yoshioka, is on communicating that Brisk is a "refreshment experience." Sources at Pepsi position Lipton Brisk as an alternative to soft drinks; not everyone wants the same taste, so Lipton Brisk offers refreshing taste without the carbonation. To communicate their message, the Partnership has launched television commercials and will add more promotional programs in 1997. Currently, there are six Brisk flavors available: Natural Lemon, Diet Decaf with Lemon, Raspberry Black, Tangerine Twist, Caribbean Cooler (peach and guava flavor), and Pineapple Coconut. Like soft drinks, Brisk comes in the same sizes: 12 pack, 24 pack, 6 pack and 2 liter take home bottles. Consumers find Brisk in the same outlets as Lipton Brew and Fountain Beverages throughout the U.S. and Canada.

Brand                 Market Share   Percent Change (Aug. 1995-96)

Lipton Brisk          28.6               + 28%
Lipton Brew           13.1             - 16.9%
Nestea Cool           14.6             + 99.7%
Nestea Hot Fill        6.1             - 29.5%
Snapple               19.8              - 7.2%
Arizona Tea            9.4             - 12.1%

According to Scott Jacobson, spokesman for The Coca-Cola Co. in Atlanta, Georgia, Cool from Nestea tripled in volume in 1995 and was among Coca-Cola USA's fastest-growing brands. In June, 1996, The Coca-Cola Co. announced an improved Cool from Nestea product formula, new plastic 1-liter and 20-ounce packages, a new positioning, and an advertising campaign featuring the tag line "made different, made cold, to cool you to the core." Currently, Cool is secure in its number two spot. Television spots, radio spots and regional print advertising support the brand. Jacobson further explained that teas aren't brewed with the cold fill process, thereby creating less of a traditional "tea taste," which appeals to the younger generation generally preferring soft drinks over tea drinks. Distinguishing between the two process, Jacobson added "hot fill has more brewed tea, which is more expensive to produce."

In March, 1996, Tetley launched their cold filled product called "Splash." Two primary markets are Ohio and Texas, with the northeast providing developmental markets. Splash is distributed through independent bottlers and will have a national rollout although no date was scheduled as of this report. When asked about the increase in cold filled sales versus hot filled, Linda Taylor, vice president/marketing RTD Beverages for Tetley responded, "The real driver for cold fill is their packaging and distribution. While hot fill has been primarily sold in single serving units, cold fill is packaged in 12 or 24 paks and in vending machines." Taylor said the market for cold filled is not necessarily tea drinkers, but people who are looking for a refreshing beverage, an alternative to soda. Splash's target market is 18-35 as well as those who are 45ish.

Modern technology may be the reason for RTD tea's current popularity, but according to Robbin McCool of Cookbook Brands, Inc., "ready-to-drink" tea has been used at home for generations in the form of the old Teabrew, a concentrate grandmother used to make up so she wouldn't have to steep tea for every meal. Today, Cookbook Brands, Inc., manufacturers a tea concentrate, which is sold to companies to make RTD teas. According to company history, liquid tea has been around 50-75 years. Restaurant personnel brewed the tea concentrate in advance, to be added to water during busy times of the day. Several small regional beverage manufacturers began mixing instant tea to mimic the new liquid concentrate trend. By the mid-1970's liquid tea was being sold by distributors to the foodservice sector and that is when the liquid tea industry officially began. Since then, and more specifically 1976, tea concentrates have undergone many remarkable changes and applications.

McCool is enthusiastic about the cold fill process, which utilizes both a tea concentrate or powder. "Procter & Gamble has educated the public that a concentrate is more economical than a powder," said McCool. "Using powder to make tea calls for preservatives; using lemon flavor helps to offset any preservative taste," he continued. "A concentrate is much more economical for everyone because it is sold by the gallon while tea powder is sold by the pound. Furthermore, a liquid is based on flavor, not solids," McCool continued. The industry taste standard seems to be lemon flavored and sweet. While Cookbook Brands has a number of private label customers, they have a retail tea concentrate marketed under the name "Ready Bru," sold in supermarkets. Inquiries from specialty tea companies indicate RTD teas are going more upscale, observes McCool.

He foresees more private label RTD's from specialty companies who are expanding their bulk and packaged business into the liquid category. As if he is reading the tea leaves, McCool's forecast is to look for gourmet teas with names like Darjeeling and Blackberry Sage to be appearing in RTD's on supermarket shelves. Fortunately, there is market demand for quality products with versatile applications. With several national brands entering this market, the industry is becoming rapidly educated. Chain managers and foodservice distributors are demanding specific applications of custom packaging and concentration levels, noted McCool. Certainly, if a company that manufacturers a key ingredient for a growing product category is producing its own retail brand, perhaps there is plenty of stacking room for RTD's on shelves, in fountains and vending machines all over the world.

Suzanne Brown is a coffee and tea marketing consultant based in Atlanta, Georgia at SJB Associates, Tel: [phone] or Email: [e-mail].