Green Tea Market | A 2008 Zpryme Study
Austin, TX - (ZPRYME NEWS) – 12/14/08 – The preferred flavor among all teas in the U.S., green tea is placed in a privileged position to thrive among customers and suppliers alike. In a 2007 national survey conducted by Mintel, 48% of the respondents chose “green tea” as the taste of preference that respondents enjoyed the most with the next preferred taste being the traditional “black tea” at 45%.
This key finding reflects how green tea has eclipsed a long-standing tradition. Between 1997 and 2002, the on-trend green tea market grew 37%. It also falls within the product segment of tea and ready-to-drink (RTD) market which was over $3 billion in 2006. During 2001-2006, sales grew 48% at current value or 29% growth with consideration of inflation. In terms of leading suppliers, Unilever is the lead supplier with 26.3% market share supported by its Lipton brand of teas. Ferolito Vultaggio & Sons’ AriZona brand of teas occupied second place with 12.6% market share, and Snapple Natural Beverage Company is the third supplier to the market with 9.1% market share with its trademark Snapple branded teas. This oligarchic market structure with these three top-level suppliers adds up to about 50% of category sales (48%) with the remaining suppliers comprised of mid-level, low-level, and private label suppliers, which also render this market quite fragmented.
U.S. Tea and RTD Tea Market Share by Company, 2006
(excludes Private Label and Other Sales)
With respect to market share of tea in cans and bottles, Unilever Bestfoods leads segment sales commanding more than 31%. It more than doubled segment sales with its trademark Lipton RTD branded tea experiencing explosive sales increases between 2004 and 2006. The significant gains can be attributed to marketing support and Lipton’s “Tea Can Do That” campaign as well as flavor innovations, such as Green Tea with Orange and Passion Fruit and White Tea with Tangerine. Ferolito Vultaggio’s AriZona brand of RTD teas also launched several new flavors under the AriZona label including Extra Sweet Green Tea and Red Apple Green Tea; under the Arnold Palmer brand, it launched Half & Half Lite Green Tea Lemonade. Ferolito Vultaggios AriZona brand experienced substantial growth of nearly 75% in the same time frame. With growth of 16%, Snapple also gained sales, yet not at the rate of the top manufacturers in the segment where the segment as a whole grew nearly 50%. Absence of strong marketing support could be curtailing growth potential, given Snapple’s extensive line of RTD teas. Sales in RTD tea in cans and bottles between rose 70% from 2001 to 2006.
During 2007-2012, total US sales of tea and RTD tea are forecast to rise 63% in current dollars and increase 38% in constant. Further, sales in RTD tea in cans and bottles are forecast to increase 94% (and increase 64% in constant dollars). The market for green tea is also expected to grow about 15% in the next several years. Why? The answer is simple: Because green tea has officially been mainstreamed….Here are the key industry drivers that support this notion. U.S. customers are becoming more and more cognizant of this healthy beverage with an antioxidant-rich profile and are ready for more. They are ready for more tea flavor offerings as they experiment with this beverage that the rest of the world has been drinking for years. They are also demanding more and more convenience from suppliers who are responding quickly to customer needs, especially with tea flavor innovations with “superfruits” compounding the antioxidant might. Suppliers in parallel want to keep this momentum going for this on-trend green tea in a high growth stage of its product life cycle, buoyed by the media. The media assists suppliers by reporting healthy attributes of this exotic tea and by heralding the educational marketing campaigns to end-users for tea suppliers. Though more work is needed, suppliers are starting to better inform potential customers of this healthy and tasty beverage alternative and to affirm and reaffirm the purchase of newly acquired green tea customers that are becoming increasingly more diverse. The diversity of the U.S. population coupled with market information of customer usage gleaned from this analysis might reflect future market opportunities in terms of market penetration and development of new green tea customers, especially with the Black Hispanic customers.
By
Mark Ishac & Zpryme Think Group
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Tags: beverage industry, beverage trends, green tea, green tea market, Health and Wellness, mark ishac, tea and beverage industry, Zpryme