Tea

by Laura Everage
This article first appeared in the May 2009 issue of "Coffee Talk".

The tea industry is experiencing remarkable change. The explosion of the market, from its multitude of offerings to its ubiquity in a variety of venues, illustrates that there is no stopping the tea category. Even with the economic downturn, "the overall state of the tea industry is very robust," explains Saunam Bhattacharjee, managing director, Assam Tea Company, Ltd., whose business is designed to support small and medium sized tea distributors and retailers. "Our medium size buyers are doing great business and are quite busy," Bhattacharjee says," and our smaller buyers – the single and multiple unit retailers – who are experiencing a slowdown of business, are actually not seeing a growth on year-to-year consumption, as opposed to an actual loss of sales."

In particular, for coffee café owners, tea represents a category that presents high growth potential, even if you think your customers are hard-core coffee people. In fact, Keith Hutjens, director of tea, Starbucks, notes, "tea is one of the few drinks providing positive comps in the coffee environment."

With that in mind, coffee establishments should not underestimate the tea consumer. They have come to expect quality from your coffee offerings, and they expect the same from all you offer - including tea.

"Coffee people spend a lot of time obtaining the best coffees and training baristas," explains Tim Smith of The Tea Smith, but oftentimes when it comes to tea, it is an afterthought. But having mediocre tea offerings affects the customer's perception of your establishment."

To ensure your tea program is up to par with customers' expectations, it is essential to revisit the basics of category management and promotion, and make sure that you are taking full advantage of the potential of the category.

Diversification of Offerings

Just as specialty coffee has expanded to offer customers a plethora of coffee and espresso based beverages for any mood and any day part, so too must the tea industry. Rather than serving as a niche product to live in the shadow of coffee, "retailers must realize that because of the increased awareness in availability and tea's part in a healthy lifestyle, tea is no longer confined to the old demographic," says Smith. "The tea demographic has expanded considerably and is broadening to include people from all walks of life, young and old. The key is to create awareness and education that will welcome customers into the world of tea."

Tea and its many forms offer retailers the opportunity to provide customers with a multitude of beverages. For example, "tea lattes are easy for an establishment to add," explains Hutjens, who says the success of a recent two-month tea latte promotion resulted in the company adding the beverages as core products year round.

Bill Waddington of The Tea Source adds this, "who will thrive in the tea category will be those who have created mini niches, or signature blends that allow them to differentiate themselves from others selling tea. Build your identity in tea, and create a feeling that ‘we are part of your neighborhood' and you'll be able to separate yourself from others and build an identity in tea."

One of the main reason's tea is becoming more popular is because it is more convenient to drink. John Wilson of Allen Flavors notes the solid and continued growth of the RTD (Ready to Drink) market as consumers make an exodus from sodas. "They're turning to tea products because they are better for you. Its further appeal is the more sophisticated flavors." Wilson says, "The popularity of super fruits and the many different flavor combinations available, as well as interest in organics, are helping grow the RTD category."

Kiley Biggins, marketing manager, China Mist Brands says the company has experienced a nice jump in the sale of their newest product, the China Mist Pure Bottle Organic teas. Introduced in late 2008, the tea is finding its place in many foodservice and retail environments. "As dining out is slowing due to the economy, we've found our foodservice customers brewing less tea. However, consumers still want to taste the refreshing flavor of our teas, therefore the graband- go sector has increased."

Specialty tea companies offering the highest quality teas from around the world, now have new opportunities to expand their reach. Having struggled with the mainstream U.S. consumer's preference for brewing tea in a bag, recent advances in tea bags now allow for the full leaf to be used, while also meeting ‘green" standards of many companies. With the new tea bag offerings, high-end companies can provide consumers with the same high quality teas, in a more convenient bag form. SerendipiTea recently launched a small line of teas packaged in a single serve, biodegradable bag. "Customers have been asking for it for a long time," explains Linda Villano, "and I had been resisting. But, a plant-based biodegradable sachet allows us to offer nine of our teas in this more convenient form."

Likewise, Beth Johnston, founder and CEO, Teas Etc. Inc., notes the launch of the company's new line of teas focused on moving consumers into a specialty loose tea product, with the convenience of a tea bag. "The bright packaging colors and the new mascot, Lucy Tea will focus on capturing consumers who might not otherwise try high quality loose leaf teas."

Ice tea is also a great opportunity yearround. The quality of the iced tea will go a long way in getting iced tea customers to return," adds Hutjens.

"As consumers turn away from sugary soft drinks, they seek flavor options like flavored iced teas," says Biggins. "Since our iced teas are naturally flavored and have no sugars of carbonation, it is a natural transition for soda drinkers to move to our teas."

To help meet the needs of the tea-drinking customers, many companies have been focused on the accessories that can help them brew at home and even consume on the go. Companies like Finum are bringing consumers new options that allow consumers to brew tea properly on the go. New introductions, such as the Travel Tumbler, incorporates a brewing basket in the top of a travel mug, and the Tea Control Traveller, a portable version of the Tea Control, which allows the user to brew loose leaf tea, then by using the brew stop insert, closes off the flow of water to the tea leaves, so the beverage does not become bitter from overinfused leaves. These and other similar brewing accessories will be the key to helping consumers easily brew at home and on the go.

Because consumers are demanding more quality, more variety and exciting new ways to enjoy tea, both hot and cold, there is no shortage of opportunities for retailers to capture the consumer with tea. Says Johnston of Teas Etc., "This is a perfect opportunity for retailers to expand their offerings, increase their service and customer communication." In the end, you will build sales in all categories.