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Iced tea is hot in foodservice: after years as an afterthought on menus, iced tea is fast becoming a priority item as foodservice operators realize that not only are more consumers favouring the beverage over soft drinks, but it also generates high margins.

After decades of languishing in the back of North American foodservice offerings, iced tea is ascending to its long-overlooked spot as a key menu draw for consumers, while serving as a healthy profit contributor as well. Iced and hot tea were typically afterthoughts for owners and beverage managers who were more concerned with putting forth great food and alcohol-based libations than better tea offerings. Carbonated soda and coffee historically have enjoyed more attention in restaurants, cafes and virtually every other form of foodservice venue.

The tipping point towards better quality iced tea was catalysed by a multi-year decline in soda sales and the medical community's warnings on the downsides of excess alcohol and sugar consumption (ie, diabetes, obesity and other maladies). The decline of soda and alcohol has foodservice operators scrambling for beverage alternatives. Innovative iced tea offerings have been patiently waiting in the wings and their time has arrived most energetically. Creative entrepreneurs and tea companies are promoting a new generation of delicious, exotic and healthy tea options to a wide array of receptive foodservice ventures, which in turn are giving iced tea greater menu predominance within this newly exalted category.

According to the Tea Association of the USA, the majority of tea consumed in the United States is iced tea, and much of that is brewed in the kitchens and beverage stations of foodservice businesses. Savvy beverage managers are often surprised to learn that brewed iced tea is commonly one of the highest margin items on their menus--food or beverage. Within a universal standard portion of six ounces of brewed tea poured over six ounces of ice, and menu pricing rarely under USD $1.50, foodservice management is celebrating. Portion costs for even the finest brewed iced teas still allow a generous mark up and often far higher than most other menu items.

"Consumers continue to enjoy their teas, both iced and hot, as tea is easy on the wallet, tastes great and is good for you," said Peter Goggi, president of the New York-based Tea Association of the USA. "Operators love tea because of its excellent margin and the fact that tea can be offered as a healthy, sugar-free beverage."

Rapid Growth in Foodservice

The foodservice iced tea innovation wave is expressing new depths of flavour, dazzling colours and healthier ingredient propositions with the inclusion of herbs and spices in some brews. Whereas a restaurant owner previously had little to choose from outside of basic black iced tea, the marketplace now offers black, green and endless herbal variations. Additionally, organic, Fair Trade and kosher-certified iced tea now grace the menus of increasing numbers of eateries.

According to Scott Svihula, founder of Hula Consulting, a specialty tea consultancy based in Orlando, Florida, foodservice iced tea is rising rapidly with almost USD $20 billion in sales last year. "Iced tea is booming in the North American marketplace. There are so many innovative new foodservice iced tea brands that an annual iced tea competition takes place every May," he said. "As one of the judges for the Global Tea Championship (GTC), I am excited to see such uniquely inspired blends and flavours entered each year." The GTC is part of World Tea Media, a division of Penton, the company behind World Tea Expo.

A panel of skilled judges is brought together to taste and score an endless array of premium quality iced teas. The competition features high quality black, artfully flavoured greens, and exotic herbal/ tisane iced teas. "These new iced teas are simply inspiring with their emphasis on optimized cup quality and indicative of the boost in foodservice attention to iced tea," said Svihula, who will be teaching a seminar at World Tea Expo, which takes place 13-15 June in Las Vegas.

Global consumption of iced tea increased five percent in 2016, says food and beverage consultancy Zenith Global, based in Howell, Michigan. Iced teas growth has exceeded the soft drinks average over the past five years and is expected to continue this momentum.

National restaurant chain Panera Bread is launching a full line of healthy beverages--many tea-based--and the business is reportedly the first national chain to post nutritional information near the point of pour. CEO Ron Shaich is hoping other foodservice establishments will do the same. Panera has added lightly and unsweetened teas to its menu, including Plum Ginger Hibiscus and Passion Papaya Green. The new beverages are free from artificial sweeteners, preservatives, flavours and artificial colours.

With overall sales in some parts of the foodservice industry sluggish and the fall of sugary behemoth beverage offerings, smart operators understand tea serves many roles in their establishments far beyond adding serious revenue and margin, it brings in a vital element of creativity and fun that consumers value endlessly.

World Tea Expo, which offers more than 60 workshops and seminars for every aspect of the tea industry, will offer several foodservice-focused sessions on tea.

Brian Keating is founder of Sage Group, a Seattle, Washington-based tea think-tank ( He's a tea expert and blend master, having earned the distinction as the first tea blend master and tea buyer for Whole Foods Market (Allegro). He's also an Advisory Board member for World Tea Expo.

Caption: S&D Coffee & Tea is a leading blender of iced teas, and the largest tea and coffee manufacturer and supplier to restaurants and c-stores in the US. The infographic is based on company insights and data.
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Title Annotation:ICED TEA
Comment:Iced tea is hot in foodservice: after years as an afterthought on menus, iced tea is fast becoming a priority item as foodservice operators realize that not only are more consumers favouring the beverage over soft drinks, but it also generates high margins.(ICED TEA)
Author:Keating, Brian
Publication:Tea & Coffee Trade Journal
Date:May 1, 2017
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