By Dan Bolton
Beverages are growing faster globally, on average, than consumer staples, making bottled drinks one of the more attractive categories of fast-moving consumer goods.
A combination of investment, innovation, and marketing is convincing consumers to seek out more natural beverage choices that deliver full-flavor functional benefits, according to Christian Dinkler, head of sales at Martin Bauer Group, a company providing expertise in teas, extract, and botanicals.
“The past 10 years have seen a significant rise of high-end teas,” he says, adding that premiumization is driving value addition.
“Major trends include formulations that can be steeped cold like the new Twinings Cold In’fuse infusion bags for use in 500ml water bottles.
“More than 5,000 new blends are created every year,” says Dinkler, citing the company’s new TeaPlus Herbs and Fruit. “Specialty tea is trendy. Brands such as T2 (Australia), Teavana (USA), Twinings and Pukka (UK), have brought this segment back to consumers’ awareness, especially within the younger generation of millennials,” he said.
One of the more active segments is ready-to-drink (RTD) tea with an estimated $60 billion retail value and climbing. Several brands of sparkling tea and water, effervescent juice, and fusions (such as Coke Plus Coffee) are racing to break through the billion-dollar barrier.
Examples include Coca-Cola owed Fuze Tea, which was a stand out last year, along with Honest Tea. Four new flavors of sparking Diet Coke showed stellar power, helping lift the entire portfolio 4% from organic sales growth with a 9% increase in operating income. It was the first time Coca-Cola reported both volume and revenue growth year-to-date since 2010.
In April, Coca-Cola c.e.o. James Quincey told analysts, “our tea portfolio has grown over the past several years chiefly behind the strength of brands, Fuze Tea, Ayataka, and Gold Peak as well as strong local and regional brands such as Honest Tea.” Fuze is now available in 50 countries, after a rollout in 37 countries in a single day. The expansion doubled the value of the brand globally, said Quincey.
This spring Nestlé Waters introduced San Pellegrino + Tea in sparkling lemon and peach, each without coloring, sweeteners, or preservatives. Starbucks announced in June it will add sparkling craft iced teas to its Teavana RTD lineup, already one of the top five premium tea brands nationwide. The sparkling tea, which sells for $2.39 a bottle is brewed and distributed by Anheuser-Busch InBev. Flavors include blackberry lime and unsweetened white peach nectarine, both green teas. Currently available at Northeast and Midwest grocers, a national rollout in 2019 will expand the line to 12, with six sweetened and six unsweetened teas. Teavana sold 4 million RTD bottles in its debut year.