A range of tea products from Tata Tea, the world's second-largest branded tea company announced it was leaving the US market.
The sharp decline in tea sales to foodservice and office coffee distributors in 2020 forced many smaller specialty distributors to exit or consolidate.
In April Tata Consumer Products, owners of Tetley branded tea, announced it sold its stake in two US-based joint tea ventures – parting ways with Empirical Group, a major foodservice supplier, and the Harris Tea Company’s Southern Tea. Tetley is one of North America’s highest grossing tea brands.
Sunil D’Souza, managing director and c.e.o., Tata Consumer Products, called the divestment “another step towards consolidating and strengthening our presence in international markets and will enhance our focus on the branded tea and coffee businesses in the US market.” Tata is the second-largest branded tea company in the world.
In a release announcing the acquisition, Harris writes that the new company will be called Harris Tea Food Service, “offering foodservice customers innovative products, consistent quality, and service.”
Ray Borooah, Harris Tea’s c.e.o. said, “This acquisition will accelerate our efforts to provide competitive tea and allied beverage products for the recovering foodservice industry, as customers seek immediate and innovative solutions.”
In addition to Tetley and Good Earth, Harris Tea Foodservice will now offer Southern Breeze, Ready Sweet, Newman’s Own Organics, Red Rose, Salada Tea, Tea India, Chai Moments, Wonder Drink Kombucha, and Secret Squirrel Coffee, according to the release.
Empirical will retain a close relationship as manufacturers of packaged Tetley and the Good Earth brands.
The Harris acquisition are mainly packaged offerings except for Kombucha Wonder Drink and Secret Squirrel cold brew Vietnamese coffee.
Beverage Industry News reports RTD teas generated $1.7 billion in US multi-outlets and convenience stores in the 12 months ending May 2020. The Pepsi-Lipton brands (Brisk and Pure Leaf) accounted for $571.4 million of RTD tea sales in convenience outlets.
“Consumers want convenience, which has made RTD tea a big winner,” according to Nielsen research.
The tea industry globally generates about 20% of its revenue in foodservice, primarily restaurants but RTD tea sold in convenience stores is significant. Working from home boosted multi-serve and multi-unit offerings consumed at home, according to market research firm Mintel. Consumers accustomed to single-serve at vending or lunch venues now stock pantries and purchase tea concentrates and larger quantities of canned and bottled tea and coffee.
Harris Tea Company, a division of Harris Freeman & Co., is the largest blender and packer of private label teas in North America with two production facilities in the US (in Georgia and New Jersey), one in Newcastle, UK and, an affiliated factory in India.
Borooah writes that Harris “has been adept at driving traffic and increasing sales tailored to the cuisine, format and region of the foodservice purveyor. The company’s goal in a rapidly changing post-Covid-19 world is to provide restaurants and distributors the support and innovation required for success.”