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Diverse Factors Driving Burgeoning U.S. Tea Industry.
ISSUE:
Page:
59
After decades of slow to moderate growth, current demand for most categories of tea beverages is increasing at a steady pace. Sales of U.S. tea products are experiencing record sales growth. There is considerable debate regarding what factors are driving the consumer thirst for tea.

While Ready-To-Drink (RTD) tea beverage consumption is increasing, the typical RTD consumer -- a younger male who prefers sweeter, flavored drinks -- is rarely the same consumer who prefers high quality, loose leaf or bagged tea. Increasing consumption of higher quality flavored and unflavored teas is a developing trend much like the specialty coffee market of 10 years ago. Specialty coffee segment sales now account for 30 percent of the entire coffee market. The consumers who will likely stimulate tea industry growth are the specialty-gourmet customers, not RTD tea fans. The non-RTD tea consumer demands better preparation, tea quality, and generally takes time to appreciate properly prepared tea at home or in food-service settings.

Surprisingly, the nomenclature of tea has not been standardized within the U.S. tea industry, adding confusion to many of the emerging non-RTD categories. Among those experiencing excellent growth are:

- Gourmet Tea -- Non-herbal, typically black teas, that are naturally or artificially flavored (e.g., cinnamon spice black tea) or simply packaged in whole leaf form after harvesting and drying.

- Specialty Tea -- Sub-segment of the gourmet category considered to be higher quality, limited production teas, typically unflavored blacks, from exclusive tea-producing regions or estates around the world (e.g., TGFOP Darjeeling).

- Herbal -- Single or blended "teas" containing no caffeine, made by infusing leaves, fruits, barks and/or flowers of almost any edible, non-tea (Camellia sinensis) plant.

- Functional -- Any type of tea or herbal "tea," blended or fortified to produce specific physiological benefits. This category includes diet, athletic, medicinal, and longevity formulations. Many of these teas are included by market researchers in the herbal or gourmet market figures.

Indicators of burgeoning growth and awareness from U.S. tea consumers include the vast amount of popular media dedicated to following tea trends and tea culture, RTD's growth, hundreds of coffee establishments, including Starbucks, adding tea to their product mixes, and dozens of new wholesale tea companies nationwide. The Northwest U.S., typically known as coffee country, is rapidly becoming the "tea capital" of the U.S., with at least seven new wholesale tea companies started in the last three years.

In response to the expanding demand for finer quality tea products, producers of gourmet and specialty tea have created a nonprofit tea association (American Premium Tea Institute(3)) for the purposes of educating consumers in the area of fine/gourmet tea, while stimulating demand through media and trade related publicity.

FACTORS DRIVING INCREASED TEA CONSUMPTION

- Scientific validation of healthy attributes being covered in major U.S. media on a consistent basis

- An endless diversity of flavors, scents, and accessories to enhance the consumer's tea experience

- Increased education by trade associations, tea houses, and cafes regarding proper tea preparation and serving is resulting in better quality tea offerings

- Broader worldwide tea supply keeps cost per serving generally lower than coffee with its fluctuating prices.

EMERGING TEA TRENDS

- A proliferation of flavored and unflavored Green teas and their use in new consumer products

- Specialty ethnic teas, including Chai, Thai, and South American blends

- Nutrients and herbal concentrates being added to tea to fortify human health.

Sage Group offers diversified product development and marketing services for tea and functional-nutraceutical products. The company's U.S. Tea is `Hot' Report provides in-depth analysis of the U.S tea market. Sage Group, 206/2821789; 206/282-2594 fax for more information. Each tea report sale generates a $5.00 donation to the Herb Research Foundation, Boulder, CO. References (1.) Gourmet Retailer, Nov. 1995, p. 52. (2.) Ibid, Nov. 1995, p. 52. (3.) American Premium Tea Institute Estimate, 156 Arch St., Redwood City, CA 94062, Phone 415/367-7601. (4.) 1994 Yellow Pages survey. Article copyright American Botanical Council. ~~~~~~~~ By Brian Keating and Mike Razor