Store Brands

DEC 2015

Store Brands delivers unprecedented strategic and tactical information needed by retail executives to develop and support compelling, differentiated store brand programs to build customer loyalty.

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5 4 Store Brands / December 2015 / www.storebrands.info merica might be a nation of coffee drinkers, but tea's versatility makes it a year-round favorite beverage, too. According to data from global market research firm Mintel, tea sales grew 20.6 percent from 2010 to 2014, and are projected to climb upward another 19.7 percent between 2015 and 2020. The firm's "Tea & RTD Tea — US" report, released in July, notes that the category has seen "stellar growth" in recent years. And for retailers, attention to market trends means more growth for their store brands. Trends with traction One growing trend is tea that goes beyond the ordinary and offers benefits besides refreshment. "Specialty teas with flavor upgrades and health benefits are trending due to the focus on decreased sugar consumption and increased nutrient benefits," says Kim Cipriano, director of marketing for Lincoln, R.I.-based Finlays Extracts and Ingredients USA, which offers a number of tea products and extracts. She adds that specialty teas are among the top five beverage trends. Howard Telford, senior industry analyst for beverages for London-based Euromonitor, a market insights firm, agrees, noting that "health, functionality and variety" will all remain drivers of growth in tea sales for developed markets. Flavor is also important, with Telford noting in a May presentation for the World Tea Expo that lighter, fruitier hot teas are becoming more popular, as are more indulgent tea lattes. One tea variety that is trending is green tea. "Green tea is one of fastest-growing segments in the tea industry, given increased health- consciousness and enhanced consumer awareness about the health benefits specific to matcha green tea," Cipriano says, adding that matcha has seen "consumer demand outpace store-level availability." Described by food-focused website Eater as the "current darling of the tea world," matcha is a tea powder made from finely ground Japanese tea leaves, and health experts such as Dr. Oz have reported that some of its supposed health benefits include stress reduction and weight control. Trends on the horizon Sparkling teas are also gaining traction. "As consumers seek to reduce consumption of carbonates [sodas], they are turning to alternatives like carbonated RTD tea sales, with health claims aiding the majority of the growth," Cipriano says, adding that brands such as Preston, Wash.-based Talking Rain, which sells sparkling tea in a variety of fruit flavors, will likely increase consumer awareness of the market. Premium varieties could also grab a greater hold of the market. "I think the opportunity for retailers may be in exclusive partnerships at the higher end rather than budget private label," Telford says, noting the Matcha LOVE line of green teas, produced by New York-based ITO EN (North America) Inc. and exclusive to Whole Foods this year, as an example. Whatever trends retailers choose to pursue for their store brand offerings, the bottom line is that when it comes to tea, they need to offer consumers something new. "Traditional styles of consumption are old- fashioned," Telford notes. "New tastes and new occasions lead to new opportunities for value growth." — M. Hogan Tea-up for sales To grow own-brand tea sales, retailers need to address trends toward health, functionality, variety and more. TeA One growing trend is tea that goes beyond the ordinary and offers benefits besides refreshment.

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