By Dan Bolton
Overall, consumer spending in the US and Canada is down, but tea sales online and on Amazon have increased, according to market research firm JungleScout.
At the height of the lockdown, Amazon customers were spending $11,000 per second on virtually anything carried in grocery, apparel, housewares — even automotive. The company hired thousands to meet demand and earned the loyalty of hundreds of thousands of new Prime members, despite the inability to guarantee same day deliveries. Prime membership rose to 52.4% from 45.2% during April largely due to COVID-19.
Grocery was one of the top sales categories and, as a staple, tea fared well. Kathy Cummins, Head of Data Analysis at Hinge Global said the US Amazon total tea category (counting bagged tea, loose-leaf, and ready to drink) is $29 million. This is small compared to the $1.2 billion of coffee sales, which consists mainly of single-serve capsules and pods generating $929 million. Hinge is a Cincinnatti, Ohio-based e-commerce consultancy founded in 2015 with deep expertise in sales and marketing on Amazon.
“Like coffee, we have seen an average 34% annual growth rate for tea on Amazon, suggesting that consumers are adopting this channel for this category.” said Cummins, adding, “The Subscribe and Save program, as well as the huge assortment of flavors, options, and product formats, are contributing factors.”
The “teas” category on Amazon consists of ready-to-drink, bagged, loose-leaf, capsules & pods, powders, and liquid concentrates, explains Cummins.
“Because of this diversity, sales for tea tends to be more volatile than coffee, and there is more head-to-head competition/switching with non-teas (such as flavored waters, water flavor enhancers, and non-tea ready-to-drink alternatives), according to Cummins.
“Sellers competing in teas should take special care to have strong copywriting and efficient paid marketing to stand out in the crowd,” she said.