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Herbals dominate specialty tea segment.

Ingredients: lemon grass, ginger root, rose hips, dates, cinnamon, chamomile flowers, orange rind, spearmint leaves. A recipe for some exotic culinary fantasy? No - just common ingredients that go into a product you can find on any supermarket shelf: herbal tea.

Twenty years ago, no one could have predicted hat herbal teas, long confined to health-food stores, would ever be sold in supermarkets. Or that they would become not only a mainstream beverage but also one of the fastest-growing segments of the U.S. food industry, expanding into a $100 million business during the past decade. Shedding its counter-cultural image, herbal tea has turned into a must-have for the health-conscious '90s - an all-natural caffeine- and sugar-free alternative to carbonated sodas chock-full of sugar,artificial flavors and preservative.

Herbs have, of course, been used for centuries - in the food, cosmetics and medicines of ancient Babylon and Egypt as well as in the potions brewed in medieval Europe to mend broken hearts, cast spells, ward off evil spirits and, on occasion, speedily dispatch enemies. But herbal beverages have never had any connection with traditional tea.

Technically, "tea" refers only to the plant camellia sinensis and he infusion made from its plucked and dried leaves. Although the word "tea" can be used as a substitute for "extract" - as in "beef tea," for example - a herbal tea, which doesn't contain camellia sinensis, isn't really a tea and trade groups don't classify it as such.

The Tea Council, for example, concerns itself only with those teas that have camellia sinensis as a base. "One reason for that is that we really don't know a lot about herbal products," said Joe Simrany, the council's executive director. "No one does. They aren't closely monitored. We pride ourselves on knowing everything - the chemistry and everything else about the products coming from camellia sinensis. But the herbal ea market is much too varied, and the world body of knowledge on it is not extensive."

Herbal tea blends can contain not just combinations of herbs but also spices, seeds,fruits, flowers, barks, roots and grains. Perhaps the most accurate word to describe them would be tisanes, the French term for herbal beverages. Tisane derives rom Greek, via the Latin ptisana, and in ancient times referred to a drink made from husked barley.

Companies and consumers

The U.S. herbal tea market is dominated by three companies - Celestial Seasonings Inc, Thomas J. Lipton Co and R.C. Bigelow Inc. Market leader Celestial Seasonings has vastly outgrown its health-food store beginnings in 1970. Having successfully weathered acquisition by kraft Inc in 1984, fended off a takeover by Lipton (with the help of rival Bigelow) and bought back the company from Kraft in 1988, Celestial Seasonings now has sales of over $40 million annually and a 50.3% share of the herbal tea market. Lipton and Bigelow, which entered the market in the early 80's, have market shares of 21.2% and 14.6%, respectively, and the remainder is accounted for by specialty businesses. Celestial Seasonings offers 19 different kings of herbal teas. Lipton produces a dozen and Bigelow makes eleven.

Except for Celestial Seasonings, most companies that manufacture herbal teas still consider them a minor product line. Nevertheless, "I think the market will continue to grow," says Bob Crawford, Bigelow's executive vice president. "It has gone through its early growth spurts when it was growing 15-20% a year. It's kind of settling down a little bit, but it's still growing faster than a lot of categories in the food industry." He estimates current annual growth at 7-8%.

Sparking that growth is an expanding consumer base. In the 70's the "typical"herbal tea drinker was a 35-year-old, college-educated woman in the upper-middle income bracket. Today that profile has changed to include both younger and older women (25-45 is Bigelow's target age group) and, to a lesser extent, adult males and teenagers. From a marketing standpoint, herbal tea has the advantage of not having to compete with other hot drinks, since many herbal tea consumers drink multiple hot beverages.

In the U.S., herbal tea manufacturers rarely emphasize the medicinal or therapeutic aspects of their products, although they may bin the teas as "soothing," "calming" or "relaxing." The medicinal value of herbal beverages is more commonly recognized in Europe - one reason why Europeans prefer "straight" herbal teas to blends of herbs, fruits, flowers and seeds - but they have became popular in the U.S. mainly because they don't have caffeine. "The research shows that early uses of herbal tea were really not necessarily looking for a healthful alternative but maybe for an alternative to coffee," explains Crawford. "They were drinking a lot of coffee,and they weren't going to give it up, but maybe at the end of the day or in the evening after dinner when they wanted to drink something hot, they wanted something that didn't have caffeine in it. Herbal teas were the answer."

Posing a major marketing problem for herbal tea producers, however, is the fact that most tea drinkers don't know difference between herbal and flavored tea, and often confuse both with decaffeinated. Manufacturers themselves often blur the categories. Many flavored teas, for example, are blended with black teas, and herbs are frequently used in decaffeinated or flavored teas. Even people in the food industry can't always distinguish between traditional teas and herbals. Says Crawford. "When you go to a restaurant, for instance, if you ask for a herbal tea, quite often you'll be offered a flavored tea or even a traditional tea like an Earl Grey or a Darjeeling or something like that."

Making herbal tea

Buying and blending colorful, aromatic, often exotic ingredients is, of course, the fun part of the herbal tea business. Manufacturers generally buy from wholesalers and blend the raw materials to suit their own recipes. Herbal teas can range from simple one-herb products to fanciful concoctions containing a dozen or more ingredients. Bigelow's Fruit and Almond Herb Tea (member of the Bigelow family create the firms master recipes), for example, is a blend of natural orange and almond flavors, cinnamon, orange peel roasted carob, rose hips, hibiscus flowers, roasted chicory root and lemon peel. Celestial Seasonings' Cinnamon Apple Spice tea packs a flavor punch with its blend of cinnamon, roasted chicory root, hibiscus flowers, chamomile flowers, rose hips, orange peel dates, licorice root, ginger root, blackberry leaves, natural cinnamon and apple flavors and all-spice.

Celestial Seasonings has developed a well-deserved reputation for using only the finest quality natural ingredients, which it buys directly from growers. Its high-profile, globe-trotting botanicals purchasing manager, Kay Wright, buys about 10 million pounds of over 90 different botanicals, spices and flavorings a year. A 17-year veteran of the company, Wright travels to herb farms located as far away as Chile, Argentina, India, China, Singapoire and Thailand, and has braved rain, hail, sleet, mudslides, and guerrilla warfare to get the pick of the crop.

Wright brings home pre-purchase samples, which are taste-tested to see if they match Celestial Seasonings' master recipes. Suppliers then ship containers of the selected ingredients to the company headquarters in Boulder, Colorado, where they are cleaned, cut, blended packaged. Teas are blended 1,000 pounds at a time, with each batch taste-tested to match it with the master recipe. Says Wright, "One reason we have a good cup of tea - a cleaner, clearer cup with more flavor - is that we also taste-test each herb individually before it goes into a blend. So, for example, we'll know that if the Argentine crop had too much rain or something, it'll be a little bitter, so we'll have to add more Egyptian sweeter pollen."

The vagaries of weather are particularly important in the herbal tea industry, because of the vast quantity and variety of plants involved. Besides developing an intuitive sense for the right herb or spice, herb buyers must understand agricultural cycles, monitor weather conditions in different part of the world and develop strong supplier relationships that can carry then through rough spots, "With agriculture being such a cyclical business, anything could happen to the crop," says Wright. "There's always something going on with one of the ingredients. So you've got to barter back and forth to keep everybody happy. My grandmother in South Dakota always used to tell my grandfather, "There's no sense worrying about the weather, George! And here I am - I never thought I'd be worrying about the weather!"

Marketing strategies

Herbal tea sales have leveled off since their spectacular growth in the 1980's and future market expansion is likely to be modest. One major growth opportunity exists, however: the booming iced tea segment. Nearly 127 million Americans drink tea, and iced tea accounts for an estimated 80% of this consumption. Herbal tea, by contrast, is perceived as a hot beverage, to be drunk in winter. For most manufacturers, herbal tea production sales are seasonal peaking between October and March and slumping during the summer months.

Vigorous campaigns are therefore afoot to get consumers to drink herbal tea iced. Celestial Seasonings has recently introduced Iced Delight, an herbal tea meant to be drunk cold, and is planning to launch a ready-to-drink herbal tea in a bottle. "Americans, especially, when they think of tea, think of iced tea," says Wright. "So we think that's a good niche to go into."

Other marketing strategies for herbals include the following:

Broadening the consumer base. Publicists for the large tea companies are using every gimmick imaginable to make herbals appealing to people who may not consider drinking them otherwise. Exhausted after running a marathon? Cool off by quaffing herbal tea mixed with mineral water. Want a refreshing, low calorie, all-natural alternative to diet sodas? Try herbal tea. New party ideas for children? Throw an old-fashioned tea party complete with plates of scones and cups of herbal tea. Weaning your teenager off Pepsi? You get the idea.

Blending herbs and spices with black teas. Although manufacturers are now paying more attention to this strategy, it is by no means new. For example, Bigelow's famous "Constant Comment,' the tea with which Ruth Campbell Bigelow launched the company in 1945, was flavored with orange rind and sweet spices. It still remains one of the company's most popular products. Lipton entered the flavored tea market in 1977,and in 1986 created a Special Blends line that combined flavored teas with traditional blends like Earl Grey, Darjeeling and English Breakfast.

In 1986, Celestial Seasonings also ventured into specialty teas containing caffeine, combining ingredients to achieve unusual flavors. "Herbal teas are still our cash cow," says Wright. "But we've been expanding. One of our cash cow," say Wright. "But we've been expanding. One of our earliest ventures into black tea was Morning Thunder, where we mixed black tea with mate, an herb from South America. Now that's got its own little following." Another exotic concoction is Swiss Mint After Dinner Tea, a blend of black tea, dates, peppermitn leaves, natural flavors,carob, roasted yeast, rose hips and cinnamon. And the company has just hunched an organic herbal tea, made with ingredients grown without fertilizers or pesticides.

Promoting the use of herbal tea in foods and in other beverages. Smaller manufacturers and large ones for whom herbal tea isn't a primary business - find this exceptionally useful way to increase product consumption. Bigelow, for example, offers a free booklet to consumers called "Baking with Bigelow Tea," which contains recipes developed in the company's own test kitchen. Among the goodies feature (made with Bigelow herbal teas as part of the ingredients) are |Constant Comment" Tea Cake, Cinnamon Stick Scones Raspberry Royale Brownies and Mint Medley Mousse.

Manufacturers also recommend using brewed herbal teas to perk up drinks like fruit punch, lemonade, ice milk or club soda. For more adventurous p palates, they suggest garnishing herbal tea with fresh fruit or berries, chilling it with frozen fruit juice cubes or stirring it into sorbets, mouses,wine or liqueurs.

Pitching herbal tea's non-food uses. Promoting herbal teas as "natural" beauty aids is a new twist on an old idea. Herbal prerarations (especially those containing chamomile, rose hips or mint) have traditionally been used to cleanse and soothe he skin, and many commercial brands are readily available. But herbal tea, its manufacturers claim, can do double duty n both kitchen and bathroom. So, for example, you can steam your face with hot chamomile tea, add a citrusy herbal to your bath or tighten your pores with a splash of a mint tea infusion. Perhaps the most famous cosmetic use of herbal tea is to soothe puffy eyes. Since many top models supposedly swear by this method, here it is in its entirety: Soak two chamomile or rosehips tea bags in hot water, squeeze and apply to each eyes for 15 minutes. No more puffs,or so they say.

Besides flavor, herbs also offer aroma, and one way to enjoy their scent is to use herbal tea bags as potpourri (simmer a few on the stove) or sachets, to perfume drawers, kitchen cupboards or closets.

La Creme's Herbal Teas Delight the Senses

At the opposite end of the spectrum from a giant commercial herbal tea producer like Celestial Seasonings is the small specialty business that sells hand-flavored and blended herbals.

One of the best of these is Dallas-based La Creme Coffee & Tea, whose award-winning gourmet coffees, teas, food products and accessories are sold to restaurants and hotels in Dallas and throughout the country. Founded eight years ago, La Creme consists of an 11,000 sq ft wholesale warehouse, a retail outlet and a coffee house which also features live jazz and an art gallery.

"Herbal teas are one of the smallest amounts of product we sell," says La Creme's owner, Bonnie Itzig. One reason for that, she thinks, may be that herbal drinks are considered hot beverages, and hot tea just doesn't go down well in the Dalls climate. La Creme does sell a good deal of iced tea, some of it herbal. Itzig also suggests that the spiciness of Southwestern cuisine may reduce the demand for herbal teas, which tends to be mild in flavor.

La Creme's own herbal blends, however, are not. for the faint of heart. Just opening one of the company's low-key packages (predominantly red and white, with some line art) releases a heady fragrance that can be smelled from clear across the room. The tea's visual beauty is stunning - a profusion of herbs, spices,leaves, flowers and dried fruit left whole, jolting your senses with a riot of colors, shapes and textures. This tea is too beautiful, too sensuously perfumed to drink.

"You can't even compare it to commercial teas," says Itzig. "You're talking about two different types of products." There is little, if any, similarity between La Creme's extraordinary herbal creations and the chopped-up, sanitized, teabagged, toned-down - albeit all - natural - offerings of a large commercial manufacturer. Itzig makes her blends by hand and ships fresh batches to customers every week. One of her best-selling herbal teas is Papaya Hibiscus, which, she says, is a hot favorite at the Red Sage restaurant in Washington, D. C., about a block from the White House. "We can hardly keep it in stock!"

One key reason Itzig doesn't venture too far into herbals is the sheer cost of the raw materials. Some of the ingredients used can run as high as $8/lb, which makes the cost of producing herbal teas prohibitive for a small manufacturer. And this cost is passed on directly to the consumer. At about $25/lb retail, La Creme's herbal tea doesn't come cheap. Compare this with a Celestial Seasonings package of 24 herbal tea bags, which retails for about $3.25. But with machines churning out 1,200 teas bags per minute, or 48,000 boxes in a single eight-hour shift, Celestial Seasonings can afford that kind of pricing.

Weather conditions and supply shortages, which don't faze large companies with ample resources, are major headaches for specialty stores. "I have difficulty finding hibiscus sometimes," says Itzig. "In the countries where it's grown, potpourri people have been buying it up. It's different for the bigger companies, because they buy in bulk and have a hand in the market all the time. Herbs fluctuate a lot more than teas do. So I dabble in them less."
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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Title Annotation:includes related article on Dallas-based La Creme Coffee & Tea
Author:Ramaswami, Rama
Publication:Tea & Coffee Trade Journal
Date:Jul 1, 1992
Words:2719
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