Brewing tea sales

Sales of ready-to-drink teas may have slowed, but new introductions will continue to fuel the category. A recent Mintel report forecasts a sales increase of 18% from 2012 to 2017 for the segment.

Lemonade-and-tea drinks — sometimes called “Arnold Palmers” —  have become more popular with consumers. Arizona Beverage Co.’s Arnold Palmer line had strong growth last year, and Snapple and Sweet Leaf both launched lemonade-and-tea beverages.

Arizona leads the tea category with a 16% market share followed by Pepsi Lipton Tea Parnership, which has a 14% share. Dr Pepper Snapple Group’s Snapple brand holds third place. Sales of premium teas outpaced the category with double-digit growth, possibly because they contain less sugar. Mintel expects teas with less sugar and those not containing high fructose corn syrup to perform best in the future.

Coca-Cola is gearing up to build brand share for Fuze since the company will lose distribution rights to Nestea once Nestle Waters North America takes back  distribution rights to the brand later this year. Coke recently introduced three Fuze teas: a lemon tea, a honey and ginseng green tea and a half-lemonade-half-tea. The one liter bottles are priced at 99 cents, putting the brand in direct competition with Arizona’s popular 99-cent tall segment.

Hansen Beverage Co. also plans to ramp up its fast-growing Peace Tea with new packaging later this year. The brand has seen sales more than double in early 2012.

The article above is part of the DSN Category Review Series. For the complete Beverages Buy-In Report, including extensive charts, data and more analysis, click here.