Printer Friendly

1991 Nielsen tea report.

There have been many occasions to celebrate during 1991 depending on your individual. perspective.

For the tea industry, we have reason to celebrate, as the latest sales figures show tea pound sales rose 2%. Dollar volume increased 6%. The last time the number looked this good was back in 1983, when the tea category was up 4%.

Retail sales of tea improved 2% to 128 million pounds. Dollar volume expanded 6% from a year ago. The numbers presented here are slightly different from those you have seen in the past for two reasons.

These figures reflect retail grocery sales of tea as measured by Nielsen's nationally projectable sample of 3000 stores representing the 31,000 supermarkets with annual sales of $2 million or more. Previous reports were based on a universe of the $4 million stores. The continued penetration of scanning systems, which is the basis of Nielsen's data collection methodology, allowed us to increase our coverage of these smaller stores. This new sample covers 82% of total grocery all commodity volume.

This report now includes information on liquid tea. Whether it is canned, bottled, aseptic or cartons, chilled or self stable. While the liquid segment is small it is the fastest growing, as we shall see.

The 2% advance for total tea was driven by the growth of tea bags and iced tea mixes. Tea bags, whose trend has steadily improved, posted a 1% gain this year while iced tea mixes surged 8%.

Herbal bags, which had been a strong performing segment, actually dropped 2% versus the previous year. Instant tea and loose tea declines continued, although not to the extent that had been observed in recent periods.

New this year is the addition of liquid tea data. This category has shown double-digit expansion during each of the past three years, albeit off a relatively small base.

Obviously these tea trends are very positive. Let's step back and analyze some of the causes for this. Tea velocity improved despite a slowdown in the growth of retail food outlet dollar sales, currently up 3%. The percent that food commodity sales represent of disposable income held year to year.

At the same time, money spent on food eaten out of the home grew 4% from 1990.

This growth rate outpaced that seen for food at home, therefore, food away form home's importance rose slightly. However, neither segment matched the change in the consumer price index, meaning there was no real growth, when adjusted for inflation, in either of these industries.

Tea sales rose despite, or perhaps because of, the impact of the recession on the overall food industry.

One of tea's strengths has been it's low cost per serving relative to other beverages, and this has not changed. At the same time that the growth rate for American's disposable income was slowing to 5% and the consumer price index accelerated to 7% retail prices of tea rose only 4%.

While you as manufacturers can, for the most part, control the price, promotion, advertising and distribution of your product, one element that cannot be controlled is the weather. In trending the average U.S. temperature change in degrees, five out of the past six bimonthly periods have been hotter than the comparable year ago period. This factor has probably contributed to tea's sales improvement, particularly the bags and iced tea mix segments.

Several beverage categories continue to record strong tonnage growth, particularly refrigerated juices and drinks, carbonated beverages and powered soft drinks. Despite the strength of these categories, tea managed to post a positive trend while outperforming frozen and canned juices and drinks and coffee.

Of the selected beverages from the prior chart, coffee was at the bottom of the list in terms of performance. Pound sales of coffee, measured at 1.3 billion, were down 1% from last year.

As the coffee and tea trends went in opposite directions, the ratio of tea to coffee pound sales rebounded this year. Tea movement now represents 9.6% of coffee volume.

Given the iced tea mixes strength, which were up 8%, it comes as no surprise that this segment again increased it's importance to total tea sales, rising 1.3 share points to 21.7%. This progress came at the expense of all the other types except the ready to drink liquids.

When looking at the tea category on a pound basis, liquids, since they are mostly water, account for only 1% of actual tea leaf tonnage. However, due to the convenient packaging and resultant high cost, fluids are five times more important on a dollar basis, representing 5.2% of the category. Similarly, iced tea mix and herbal bags are also more important on a dollar basis compared to their share of pounds. On the other hand, tea bags, which constitute over 60% of all tea sold, contribute less then half the retail dollars.

In the past we have seen niches within the bag segment which have provided ongoing growth opportunities. This year only decaffeinated tea bags remain strong. Herbal and specialty bag's pound movement were off from year ago levels.

Nationally, tea volume increased 2%, with three of the four areas recording gains. In the west, where per capita consumption is only half that of the U.S. average, tonnage fell 2%. Northerners, already heavy users of tea, purchased 3% more pounds than they did last year.

The 3% growth of tea in the north was driven almost entirely by the iced tea mix segment, which jumped 10%. In the west, declines for tea bags, instant and loose tea offset gains on the iced tea mixes and liquid teas. Tea bags and iced tea mixes contributed to the expansion within the central and southern areas of the country.

Similar to the national level, iced tea mixes became more important in all four regions. Liquid tea, a small price of the business in each area, skews toward the north where it accounts for 1.5% of total sales.

Stephen Ruggerio of the A.C. Nielsen Co., in Port Washington, New York, presented this speech at the annual tea convention of the U.S. Tea Association in Scottsdale, Arizona
COPYRIGHT 1992 Lockwood Trade Journal Co., Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:extensive statistics presented at U.S. Tea Association's annual convention
Publication:Tea & Coffee Trade Journal
Date:Apr 1, 1992
Previous Article:Javamania in Japan.
Next Article:U.K. Tea Council: healthy drinks project.

Related Articles
UK tea trade holds first-ever convention.
China improves its tea export sales.
Darjeeling poised for specialty tea market.
Argentina: tea and coffee report.
The reanimation of the German tea market.
Foodservice tea sales continue to increase.
U.S. Tea Convention review.
A toast to tea - a "new" role for an ancient beverage.
Tea consumption in Canada.
Tea is tops for healthy Canadians: a report by the Tea Association of Canada.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters