Iced tea trends cover the spectrum.
The iced tea market has come a long way from the commercial instant powders that served this segment 10 years ago. In those days you had your choice of either sweetened, unsweetened and either natural or lemon. Today's premium iced tea market encompasses formats from eye-catching bottles to quality loose leaf in bags designed for home coffee brewers. The flavors range from tropical to orchard. The base tea can be anything from green tea to decaffeinated black, and even chai has made its appearance over ice.
The oft-quoted consumption figure for iced tea remains at a steady 80-85% of the tea consumed in the U.S. But today's consumer is more sophisticated, more knowledgeable about the category in general, and more willing than ever to treat iced tea as a serious beverage choice. Here, then, is a look at how some U.S. iced tea companies are handling this diversifying and profitable market.
One of iced tea's latest contenders has placed tremendous faith in the consumer's readiness to treat iced tea as a beverage choice, and they're hoping the consumer will ask for it by name. Sir Aubrey's Fine English Iced Teas out of Scottsdale, Arizona, offers a very complete line of premium teas for retail, grocery and foodservice. Their secret weapon is the charming and affable tea ambassador, Sir Aubrey Franklin. If you have been in the industry for some time you probably remember Sir Aubrey's tour as spokesperson for the Tea Council of the U.S., where he is credited with sage advice such as "beware of waitresses bearing warm water." Although he was a standard bearer for raising awareness of hot tea in foodservice, it is clear that his attention these days is in getting a good "cuppa" on ice. While his tea may be served a lot cooler these days, his passion for the product still runs hot.
"Many tea companies hide behind their bags," Sir Aubrey says of quality in the iced tea market. "We've found that if you don't cheat people, and you give them good leaves, then you're sure to win them over as a customer." The Sir Aubrey's line includes mango and passion fruit flavors, and more interestingly a mint version with a green tea base, as well as a Chai. The freshest thing about the Sir Aubrey's line is its walking, talking brand identity. Taking a chapter out of the books of Orville Reddenbacher and Colonel Sanders, Sir Aubrey's packaging prominently displays the visage of Mr. Franklin - mutton chops, pith helmet, and all. At store openings and during the product launch, Sir Aubrey himself is on hand to talk to consumers. "One of the most surprising things," says president, Kathryn Petty, "is the number of people who buy a box of tea to have Sir Aubrey sign it." "I probably signed 95% of the tea we sold at the Publix grocery stores in Florida," added Sir Aubrey. The company supports the branding in more traditional ways as well. The distinctive Union Jack, brightly colored, and foil embossed packaging has elements that are repeated in everything from shippers to sample bins to product coupons. While other premium iced tea companies have always been aware of the importance of branding, there isn't another company taking such a personal route to building a relationship with the end consumer.
IS PASSION FRUIT PASSE?
"Certainly not," says Dan Schweiker, chairman and c.e.o. of China Mist in Scottsdale, Arizona. "Tropical flavors are still the biggest selling."
According to Schweiker, however, the whole flavored market is beginning to peak. "Flavored sales are still increasing, but at a decreasing rate," he explains. The growth of this category has settled down to annual percentages in the low teens. While inner America is catching on to premium flavored iced tea and there is plenty of room to grow there, the trendy coastal areas are working in opposition and embracing "comfort foods." "I think the next trend will be going back to traditional iced tea, straight black tea which is sweetened or not depending on your geography," states Schweiker. "It's the familiar flavor profile people remember as iced tea."
Of course, China Mist hasn't put all its ice into one glass. They have also rolled out a new brand: Greenstar[R] iced green tea in natural, kumquat, and blackberry jasmine. The products are aimed at the consumer segment currently drinking bottled water and fortified health drinks. When asked about wooing younger drinkers, Schweiker was quick to respond, "I'm not convinced that we pull Diet Coke drinkers over to iced tea." Rather, he says, "Our competition is the glass of tap water. My feeling is that when somebody sits down in a restaurant they have already decided between a sweetened carbonated or an unsweetened, non-carbonated beverage." The goal for iced tea makers is to get the consumer to choose iced tea over water. Enlisting the aid of the foodservice operator is easier than you think when you point out that the glass of water isn't free (there is the cost of container, service, ice, etc.) and neither wait staff nor establishment get anything in return for serving it.
WATER AS COMPETITOR
Steve Smith of Tazo in Portland, Oregon agrees with Schweiker that tea's largest competition is water. In fact, at a company goal setting session, one employee boldly stated that the goal should be to beat water out of its number one position in world consumption. Unbelievable to most consumers, tea is already number two. While Smith found the goal a lofty one, he admits that this would be an industry project.
Meanwhile, Tazo, with the newly acquired market strength of Starbucks, is prepared to help pave the way. "There will be expanded iced tea offerings at Starbucks this year for sure," stated Smith, "which will go hand in hand with our push to get tea products in the hands of consumers." One of the specific educational aims is to let consumers know that iced tea is not a mystery. He feels that one of the problems in gaining acceptance for premium iced tea is the conception of it as an "in and out program" on store shelves. There hasn't been any shelf space dedicated to this product because it's seen correctly as seasonal, and nobody wants to put in the effort and money for shelf talkers, and other promotional strategies for a short selling period.
Because of this, Smith points out that the shelves continue to be dominated by traditional brands. "We're letting people know our products taste good over ice," explains Smith, "just go to the store, buy them, brew them and pour them over ice." He also remains a strong proponent of Ready-To-Drink (R-T-D). "As anybody in the iced tea business in foodservice knows, you are at the mercy of the operator as to how your product is prepared," says Smith. All of us in the industry have war stories about operators cross-contaminating product with coffee, keeping brewed product for days on end, or failing to properly clean equipment. Who can forget the bacteria boogey man of a few years back? "Our bottled beverage teas are highly portable, and we've taken the inconsistencies out of them," explains Smith, "to get a great tasting glass of traditional black iced tea you almost have to give the operator brewed beverage."
What's around the corner? "The plethora of products based on chai being served this summer should be awesome," Smith predicts. He also points to more blending in R-T-D of fruit juices and tea.
As for the next new iced tea beverage? "It may be 3,000 years old," says Smith, "with its roots in ancient tea history but a new and unique twist to it." Finding this beverage, offers Smith, is a challenge to the category.
PARADISE IN YOUR OWN BACKYARD
Paradise Tropical Tea, of California, now owned by Superior Coffee, headquartered in Chicago, Illinois, was the first up-scale iced tea and the first tropical flavored tea on the market. It made a huge, albeit regional, splash and became the beverage of choice for people who "do lunch." According to Sue Bietsch of Superior Coffee, the product is now primed for national coverage.
"We're ready to attack the premium category," says Bietsch, "the Paradise line is now available nationwide for the first time." The audience in middle America is thirsty for Paradise too. "Some of our drivers can't get the product in fast enough. People remember the bright yellow box and the refreshing taste of the tea, from vacations to California," explains Bietsch. Because of this, Paradise is in a great position to experience some of the "honeymoon effect" that keeps sales of Kona coffee riding high. To make sure the product maintains its characteristic clear color and exotic flavor, Superior is spending a lot of time on operator training. Says Bietsch, "We're really trying to push training all the way down to the server, from sanitation to holding, to being able to describe the flavor of the tea."
Other positive forces at work in the nationwide market are the increasing numbers of vendors dedicated to serving tea and a more adventuresome consumer. "We still face regional challenges in how consumers perceive tea. In the Southeast, for example, they are used to a really dark liquor, and it's hard to get them to judge by taste," states Bietsch. Sampling is Superior's answer, as well as continued work on the branding. The future for Paradise could be as bright as their packaging. "We look at how many iced tea brewers came to market last year," says Bietsch, "and the restaurants are going to have to meet the level of what the consumer is experiencing at home, which is good iced tea." The Paradise line will also continue to grow. "We are going to continue to bring out new flavors, and we're definitely looking at a green tea," states Bietsch.
A GLASS A DAY KEEPS THE DOCTOR AWAY
News about tea and health has kept the tea industry very busy, and is also helping to make it very profitable. The Republic of Tea, Novato, California has been a forerunner in keeping abreast of all the latest developments and translating the data into useful information for the consumer and savvy marketing for its products. Their healthy approach to iced tea isn't any different. Barbara Graves, v.p. of marketing, says, "Brewed tea is pretty big business for us. We have accounts like Barnes & Noble bookstores, which keep us very busy in brewed iced tea." The company offers full leaf teas in 3-oz. and 1-oz. brew bags for foodservice, in about eight varieties. Top sellers follow pretty closely to their hot line: ginger peach, mango, and standard issue (plain black tea). However, following the trend in green teas, they are selling a lot more green over ice. "We recommend our Moroccan mint," says Graves, "when asked to supply a green tea compatible with ice. It makes a very refreshing iced tea." Barnes & Nobles will be doing a spring promotion with The Republic's spring cherry green tea, a pretty bold statement about what the "average" consumer is willing to drink on ice. In conjunction with the increased interest in green, Graves also sees more of their herbal line going out for iced tea. Again, this seems to be in direct answer to news about related health benefits of teas and certain herbals. "Our Ginseng Peppermint is our number one herbal iced tea; it tastes good and it's good for you. We're really seeing the health benefits news creeping into the iced category," says Graves. Two of its ingredients, echinacea and ginseng, have made big news in health circles.
CONQUERING THE SWEET TOOTH WITH TEA
Another new entry into the iced tea market is Honest Tea of Bethesda, Maryland, with a little bit of everything we've talked about so far. Seth Goldman, tea-eo, says the company started with the idea of bringing a less sweetened beverage to the market. "We definitely wanted something in the R-T-D category," says Goldman, "but we were looking at the overall beverage category, not the tea category." It turns out, this larger perspective gave Honest Tea a competitive edge. Once they had decided on tea as the vehicle, they set about putting it in a bottle and in the process used the parameters for making tea, not the parameters for making a bottled beverage. No concentrates, no high fructose corn syrup, and the water used for brewing actually comes to a full boil. The result is a bottled beverage that clearly speaks the language of tea, and the varieties speak worlds about what trends are happening in the tea industry. For example, there is both a chai and a green tea flavored with mint, two herbal infusions (berry and cinnamon flavors), and an origin specific black tea (Assam).
The new company isn't afraid of making inroads where nobody else in R-T-D has gone before. Their naivete proved a boon in creating processing methods that were quality tea-oriented. It has also been a blessing to product development. Their latest creations are a decaffeinated Ceylon.
"We use Ceylon tea that has been decaffeinated using the CO2 process, and flavor it with lemon-grass." says Goldman, "It has a wonderful flavor." It also falls right in line with a traditional flavor profile for black tea with lemon.
Secondly, they have also created an organic peppermint herbal infusion, sweetened with agave nectar called First Nation. "First Nation is exciting not just because it is the only organic R-T-D tea on the market, but because it is created in a partnership that can serve as a business model that affects positive social change," says Goldman. Following an ancient recipe of the Crow Indians, Honest Tea has partnered with I'tchik Herbs, a woman-owned company based on the Crow reservation of central Montana. In addition to sourcing the organic peppermint through I'tchik Herbs, Honest Tea will also pay royalties on the sales which will go directly back to the Crow community.
"One of the great things about tea is that every culture in the world has a tea," says Goldman. "We've simply brought a truly American tea to a broader market."
Regardless of whether its green, spiced, bottled or bagged, the iced tea market continues to be exciting and fertile ground for the industry. It offers the consuming public a refreshing taste of what the world of tea has to offer.
Wendy Rasmussen is executive director of American Premuium Tea Institute. She also co-authored the book, Tea Basics.