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Herbal tea update in the U.S.

Herbal tea. Does the thought take you back to Woodstock, or do you immediately think of Birkenstocks and granola?If so, you're in for a shock because herbal teas have gone upscale, they're now more yuppie than hippie. Over the past 10 years, in fact, herbal teas have come to represent a $100 million business. The big three, Celestial Seasonings, Bigelow and Lipton, have maintained steady shelf space in grocery stores over this period, but they are increasingly sharing space with smaller companies who have created specialized niches in this beverage market and who are taking a bigger piece of this profitable pie.

Reasons for the expanding herbal tea market are numerous and frequently cited. Primarily there is a health trend that is pushing consumers towards products that are free from caffeine, sugar, and fat, a claim herbal teas have always been proud to make, but there is also an environmental "green think" trend which is motivating consumers to purchase all-natural products, no flavorings, preservations, or additives. Herbal teas made only with ingredients we can pronounce, and which were often in grandma's cooking fit the bill. On the scale of politically correct purchases, herbal teas rank right up there with recycled garbage bags and phosphate free laundry detergent.

Furthermore, while the age old debate over caffeine continues to rage, "evil drug" vs. "inspirational tonic", "heart diseases" vs. "increased sex drive," the herbal tea market in the last decade has experienced annual growth of sometimes up to 15-20% a year.

Currently the market seems to have settled into an annual growth of 7%, a comforting margin in today's economic climate.

But why don't consumers simply switch to decaf tea? Unlike coffee which is simply a bit hardier at the raw commodity stage, tea suffers degradation during decaffeination which causes the final product to have a bedraggled appearance and a weak taste. Furthermore, tea is not exposed to the same final processing stages as coffee, mainly roasting, which would qualm fears of solvent residue. So, herbal beverages have benefited from the skepticism amongst consumers and industry alike over decaffeinated teas. They simply don't meet the quality criteria in flavor and appearance that many consumers now demand.

The new consumer that is fueling the migration of herbal teas from health food stores to specialty stores is young (25-45), in the upper-middle income bracket, and college educated. This is the same group that seems to be buying balsamic vinegar and goat cheese, and demanding organic produce. This is a consumer base that is making informed choices about food. They are not thirsty for health and environmentally conscious alternatives, they are hungry for information.

Gurusimran Singh Khalsa of the Yogi Tea Company in Los Angeles, has been witness to the evolution of herbal teas. His company began when he was manager of Golden Temple Foods in 1980. They made Yogi Tea as an after class pick-meup for yoga students, and sold the ingredients (cinnamon sticks, cardamom pods, fresh ginger. black pepper, and cloves) so people could create the beverage at home. Getting the ratios correct proved to be a challenge and the company soon began to market a Yogi Tea Mix, sold loose in a brown coffee bag. The original market was the California health food industry. Today, Yogi tea comes in variety of flavors and can be enjoyed loose, in tea bags, or through a cappuccino machine.

"In the last two years especially, the market has really changed. We are having great sales in gourmet markets, where there is a demand for natural products that are high quality. This niche in the gourmet and upscale grocery simply didn't exist-when we began Yogi Tea," notes Gurusimran. "What we're doing is making herbal teas that are more than healthy, they're healing. But most importantly, they taste really good. The whole idea of "yogiccino" is that it's very healing beverage in a form consumers already like but are trying to cut down on." The yogiccino Gurusimran refers to is a special grind of Yogi Tea made for the cappuccino machine and carried by hundreds of restaurants. The tea is brewed in the machine just like espresso and then mixed with steamed milk. The result is a sweet caffeine-free alternative to a 1900's addiction, and is a prime example of how herbal products are moving in sophisticated circles.

The idea of herbal teas as not only healthy but healing is an ancient concept. Herbs have historically been the medicine of mane. (Today, we are still reliant on Mother Nature. The research on the Yew tree for a cancer cure is a prime example.) While in the Western world we don't expect herbs to ward off the evil eye or turn the tide of unrequited love, we are gaining new respect for the use of herbs as both curing and preventative agents. The interest in holistic medicine as a whole isn't surprising given the cost of modern pharmaceuticals. However, it also follows in the wake of interest in alternative medical practices as a whole, and the established medical communities move towards preventative medicine versus treatment.

Traditional Medicinals, an herbal tea company based in Sebastapol, CA, has carved out a distinct place for itself in the herbal tea industry based on this interest. The company features a full line of medicinal herbal teas, each aptly named for its curative purpose such as: Throat Coat,..Breathe Easy, and Smooth Move. At their start up in 1974, the company's only market was the health food industry. But in the early 80's, the introduction of natural foods sections in grocery stores widened their distribution, and today the medicinal line is found in drug stores as well. Moving into the gourmet and specialty market, Traditional Medicinals has introduced a line of beverage teas as well as their medicinal beverages. This line, includes all natural herbal teas such as French Vanilla and After Dinner Mint.

"Our line is divided into the medicinal remedies which are in dosage form and where delivery is in a tea bag, and then the beverage teas," explains Lynda Sadler of Traditional Medicinals. "The medicinal remedies fall under the jurisdiction of the FDA and we spend a tremendous amount of money testing for the amount of active ingredients in the teas, essentially treating the product as one would a pharmaceutical." With an emphasis on the all natural aspect of both types of products, the company has been able to experience continuous double digit growth since its conception. "These products began in the 60's," says Sadier, "and the concerns that fueled their invention, such as holistic medicine, healing oneself, the use of natural products, are on the minds of mainstream consumers today."

Along with the rediscovery of herbal teas as health beverage and cure for the common cold, there is also a more conservative side to the herbal industry as well. There are a number of consumers who buy herbal teas simply as an alternative beverage and who aren't buying as part of an alternative lifestyle. This interest provides a way for the more traditional specialty tea purveyor to capitalize on general consumer interest in herbal tisanes.

Dick Sanders of Grace Rare Tea in New York is such a traditional tea man. His company carries Assams, Darjeelings, and Keemuns for the tea connoisseur. But recently his mail order list sported two new entries, Egyptian Camomile "Earth's Apple Flowers" and Pure Peppermint.

Sanders explained the decision to add these herbal alternatives, "We had a survey amongst our mail order customers, who probably represent a third of our business, and asked them numerous questions about regular Camellia sinensis. But, almost as an afterthought we asked, "Do you drink herbal teas, and if so, how many times a year?" Somewhere between 40-50% of these customers stated that yes, sometimes during the year they drank an herbal tea. Based on that information, we decided to offer the camomile and peppermint. We really haven't marketed it or spent much effort on it other than to add it to our list of teas." Like the rest of Grace Rare Tea's offerings, the herbs are top-quality. Most of us have experienced these herbs in tea bags, as Sanders himself says, they are fairly traditional type herbal teas. But, unlike their teabag counterparts which are crushed or finely chopped into dust, the camomile from Grace Tea is whole flower and the peppermint is coarsely cut. Like any spice or herb, the difference that maintaining the integrity of the plant makes is one of flavor and aroma. The difference it makes in marketing is that these herbal infusions make their way into specialty tea stores carrying loose varietal and estate teas.

Herbal teas have moved into the mainstream to stay. Given the diversity of products, the expanding herbal tea market promises to be one of the most exciting segments of the specialty tea industry.

By Wendy Rasmussen Moore Editor of The Tea Quarterly.
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.

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Author:Moore, Wendy Rasmussen
Publication:Tea & Coffee Trade Journal
Date:Oct 1, 1992
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