Tea Industry News and Features

Certified Organic Flavors Now Required for Certification

By Scott Svihula January 22, 201

The National Organic Program (NOP) published a final rule that amends the National List of Allowed and Prohibited Substances (National List). This rule will be fully implemented January 28, 2019, with the exception of the amendments for the substances ivermectin, flavors, cellulose, and glycerin, which will be implemented December 27, 2019.  The new ruling on flavors requires the use of organically certified flavors whenever commercially available. Since the USDA did not post guidelines or list what is commercially available, each certifying agency will have its own set of requirements, ranging from a simple form to more complex documentation. Regardless, any certified organic tea using natural flavors under the 95 percent rule will need to be re-evaluated using organic certified flavors or collect documentation that its needed flavor is not commercially available. Each agency will have to determine if a flavor is considered commercially available or not at this time.  To read the final rule in its entirety, please reference the federal register here.

Bergamot fruit (Getty Images/NakornChaiyajina)

Most flavors used in the tea industry are organic compliant natural non-GMO flavors, but these will no longer qualify for certification. Certified organic flavors will have to be used if commercially available.

The definition for commercial availability is in the rule 205.2 Terms defined. “Commercially available. The ability to obtain a production input in an appropriate form, quality, or quantity to fulfill an essential function in a system of organic production or handling, as determined by the certifying agent in the course of reviewing the organic plan.” The reason why something is not commercially available must comply with the definition above: form, quality or quantity to fulfill an essential function and must not be based on price.

This poses several questions that are currently unanswered. For example, let’s take strawberry. There are many ways to make a strawberry flavor: typical strawberry used in kids’ drinks and medicines, red ripe strawberry, sweet slightly over ripened strawberry, unripe strawberry, wild strawberry, earthy strawberry, candied strawberry, etc. Even though certified organic strawberry flavor is readily available; can it be made organically in all these variations? Since each certifying agency will be making their own determination of what is considered “commercially available”, if one company submits strawberry as organically certified, will that mean that for that agency everyone will need to use certified organic strawberry flavor, even if your specific taste profile is not available? What about flavor suppliers? What if the flavor supplier you use and have partnered with cannot make your flavor certified organic? Is there an expectation that you would need to find another supplier to make it certified organic before you state it is not “commercially available”? And how many flavor companies will you need to contact? As you may know, not all flavor houses know how to create flavors for tea, some excel at this while others struggle. Not to mention that, certified organic flavors are typically about 20-30 percent costlier and have about 1/3 the strength in aroma and taste.

In talking to several tea manufacturers, the decision of what to do next will be challenging. There are basically 3 paths to take to comply with this new regulation.

1. To keep your organic certification, change the application of your 95% certified organic flavored teas to the 70%/30% category. The new ruling does not affect this category; though you will not be able to use the USDA seal. (see chart below for more details)
2. Drop the 95% certified organic flavored teas from your organic certification; though you would only be able to mark the ingredients as organic in the ingredient statement. This could cause confusion with your customers, and if you are not certifying these, does it make sense to certify any of your teas?
3. Work with your flavor supplier (and most likely other flavor suppliers) to create the same tasting flavor but in a certified organic form; knowing this will drive up the cost of goods. Once approved, you will wait 3-12 weeks to get the certification from the flavor company and then another 3-12 weeks to get your flavored tea certified. With a December 27^th deadline, you will need to start working on this change over now and have the new flavors approved by the end of the second quarter.

Regardless of the route you take for your business, the decision is not an easy one to make. This new requirement for certified organic flavors will in some way affect your bottom line and will inevitably cause confusion for consumers and reduce the number of certified flavored teas (and other organic flavored products) available. My recommendation is to seek out support from your flavor houses, industry peers, and industry consultants who specialize in blend development and product sourcing to help your company navigate through these options.

 FINAL RULE – FLAVORS

Peppermint (Getty Images/Amy_Lv)

“Flavors The final rule amends the National List to revise the annotation of flavors in § 205.605(a) to change the allowance for nonorganic flavors to require the use of organic flavors when they are commercially available. The listing of flavors in paragraph (a) reads as follows: Flavors—non-synthetic flavors may be used when organic flavors are not commercially available. All flavors must be derived from organic or nonsynthetic sources only and must not be produced using synthetic solvents and carrier systems or any artificial preservative. This rule retains requirements that all flavors must be derived from organic or nonsynthetic sources only and must not be produced using synthetic solvents and carrier systems or any artificial preservative. This rule applies to products in the ‘‘organic’’ and ‘‘made with organic (specified ingredients or food group(s))’’ categories. This rule change does not apply to nonorganic ingredients that may be used in up to 30 percent of ‘‘made with organic’’ products. Due to the number of distinctly different natural flavors and the pace of new product development in flavors, AMS has determined it would be impractical to list individual flavors on the National List to indicate which are commercially available in organic form. AMS has reviewed and agrees with the NOSB recommendation that the annotation for flavors be amended to clarify its use in organic handling. AMS received comments on the proposed rule for amending the annotation.”

ORGANIC CATEGORIES

100% Organic	•       All organic ingredients •       Any processing aids must be organic •       Flavors must be certified organic •       No non-organic ingredients are used •       USDA seal allowed •       Must list organic certification agency •       List ingredients as organic in ingredient statement
Organic 95% Rule	•       At least 95% organic ingredients •       Remaining 5% can be non-organic allowed ingredients •       Flavors must be certified organic when commercially available •       All agricultural ingredients must be organic unless not available •       USDA seal allowed •       Must list certification agency •       List ingredients as organic in ingredient statement
Made with Organic Ingredients 70%/30% Rule	•       At least 70% organic ingredients •       Remaining 30% can be non-organic allowed ingredients or non-organic agricultural ingredients •       Flavors must be natural non-gmo organic compliant •       USDA seal prohibited •       Must list certification agency •       List ingredients as organic in ingredient statement
Products with less than 70% Organic Ingredients	•       Any level of organic ingredients •       No restriction on remaining ingredients •       No certification claims can be made •       USDA seal PROHIBITED •       Only mention organic in ingredient listing

I love this publication for the beverage industry! Thanks Beverage Industry online!

2016 State of the Industry: Natural, organic vital to tea market

Tea lattes, sparkling teas offer more options

The U.S. tea market has seen an evolution over the years as consumers’ on-the-go lifestyles put an emphasis on convenience and ready-to-drink (RTD) teas. However, natural and organic trends seem to be the next big push within the tea market.

“Natural and organic are very important to tea consumers; however, all-natural is significantly more preferred than organic is,” said Elizabeth Sisel, beverage analyst at Mintel, Chicago, inBeverage Industry’s June issue. “GMO-free and Fair Trade claims are also gaining traction, but do not have the same impact on consumer purchasing decision as does all-natural.”

Eric Penicka, research analyst for Chicago-based Euromonitor International, also noted that natural is having a greater impact than organic when it comes to hot tea because of its inherent natural properties. RTD tea also is seeing a greater influence when it comes to natural attribute claims.

“Within RTD teas, there has been a very clear movement toward the creation of naturally brewed teas and this continues to bring consumers into the category,” he explained inBeverage Industry’s June issue.

For example, Pure Leaf, a product of The Pepsi Lipton Tea Partnership, Purchase, N.Y., released its Pure Leaf Tea House Collection, a super-premium line of the organic tea leaves brewed with fruits and herbs. In addition to its Pure Leaf Tea House Collection, the brand added to its Unsweetened Iced Tea with the launch of two new flavors — Unsweetened Black Tea with Lemon and Unsweetened Green Tea.

Varietal trends also are impacting the U.S. tea market. According to the Tea Association of the U.S.A. Inc.’s 2015 Tea Fact Sheet, about 85 percent of American consumers drank black teafollowed by 14 percent who chose green tea. Oolong, white and dark made up the remaining amounts, states the association’s fact sheet.

However, opportunities could abound for these minority variants. Noting that hot tea sales are forecasted to have a compound annual growth rate of 4.3 percent from 2015 to 2020, Euromonitor’s Penicka said premium trends within tea retailers could start to impact the consumer packaged goods market.

“Fueled by premium tea retailers, growing interest in teas more complex than standard black or green teas has already begun to permeate its way through traditional retail channels like supermarkets with oolong and rooibos teas making their way onto shelves,” he said. “We expect to see more of this development in specialty teas and herbal teas over the forecast period.”

The U.S. tea market also has seen impacts from hybrid beverage trends. “Tea lattes have continued to be a trend (tea and milk), while sparkling tea is on the forefront of the hybrid market — e.g., Sparkling Ice’s Sparkling Tea and Lipton’s Sparkling Tea,” said Lauren Masotti, client manager of U.S. beverages at New York-based Kantar Worldpanel, in Beverage Industry’s June issue. “There are some players offering coffee and tea blends — giving consumers the health benefits of tea and the energy boost most often sought [from] the coffee segment.”

Contributing to the tea and dairy beverage segment, Boulder, Colo.-based Celestial Seasonings, a division within The Hain Celestial Group, developed its own coffeehouse-style teas. The barista-style Celestial Lattes are available in in four flavors: Dirty Chai, The Godfather, Mountain Chai and Matcha Green.

Sparkling teas also continue to pop up in the U.S. tea market. Earlier this year, Bhakti, Boulder, Colo., announced its line of natural sparkling teas, which are available in Lemon Ginger Black, Mango Lime Matcha, Tart Cherry Rooibos and Mint Maté. Bhakti Sparkling Teas are a combination of carbonated teas, organic fresh-pressed juices and the company’s signature fresh-pressed ginger, it says.

Yet, one format of tea has remained challenged to find a core consumer base. “While tea has certainly grown within the single-cup brewer segment, the impact Keurig and similar machines have had hasn’t been nearly as profound as what we’ve seen in the U.S. coffee market,” Euromonitor’s Penicka said.

Kantar’s Massoti also noted the challenges for the single-cup tea segment, but adds tea lattes and iced variants could offer potential. “Tea lattes and iced tea occasions may continue to do well in this format as it offers consumers a ‘fool-proof’ occasion they can enjoy in a single cup,” she said. BI

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Exploitation of Labour???

Just Sharing....

On Wed, Jul 13, 2016 at 1:30 AM, Indi - Tea 'n' Teas <indi@teanteas.com> wrote:

Every single time that I travel to N America or the US, a question about 'labour exploitation in the tea industry' is almost a de rigueur certainty.

Each time I have to go to great pains to explain that WITHIN the Indian context, Tea Estate labour is far better off than workers in other industries.

This cutting from the newspaper of a photograph taken by some staff reporter on a day when the Nilgiris was being lashed by torrential rains and being almost blown away by the gusty winds leaves one with no need for words:

And this on a day when even the family dog had decided that cowering under the bed was the smarter option.

Does it appear as though these women are the 'exploited' kind??

P.S: Can't help but also add that while we get hit with 'you must provide adequate care to the workforce'

when we request buyers to pay that little bit extra to support the effort,

there is an immediate turning in of the toes.

Rather ironic, is it not?

"Thikana"

Coonoor - Kotagiri Road, P.O.Kattabettu,

Nilgiri Hills 643 214

India

Phone: 91 4266 27 9933 / Mobile: 91 9442 60 9442

eFax: 1 309 409 6254 / Skype: indikhanna

Fuso / Pyramid Tea Bag Materials and Biodegradable info

I am often asked about biodegradable and safe pyramid tea bag materials.  Here is a company you can ask your questions, order your custom tags, and send to your co packer with your label.

http://www.teabagfilter.com/products/mesh_filter/soilon.html

TEAROAD SOILON is a filter made with the biomass material known as polylactic acid, the base material of which is plant starch.
Burying this product into the ground after use causes microorganisms to completely break it down after being hydrolyzed into shoter fragment. Such is the nature of this filter for beverage use created with mankind and the environment as a top priority.

Characteristics

1. Using plant starch as its base material, this product is manufactured through processes that include lactic acid fermentation and polymerization of ｌactic acid. Then polylactic acid is rendered into fibers and woven together. Its uniform opening affords the product a superior level of permeability, making it perfect for tea bag filters used with tea leaves.
2. No harmful substances is detected upon extraction using boiling water. SOILON　is compliant with food, additive and other standards under the Food Sanitation Act (No. 370).
3. Upon burying SOILON in the ground, following hydrolysis, the material is completely broken down by microorganisms, after which it is eventually turned into water and CO2 (materials cited). The speed of degradation varies largely depending on the temperature, moisture and PH level of the soil, as well as the types and number of microorganisms present.
4. When burning SOILON,the harmful gas (dioxin etc.) is not generated. Also the generation of greenhouse gas (carbon dioxide) is less than usual plastic. (reference literature)
5. Polylactic acid, the material used in SOILON, has reported to have bacteriostatic and mildew-proof properties.
6. Plants, which are renewable, are used as the basic materials in SOILON, thereby helping to contribute to the development of a sustainable society. This aspect has enabled us to acquire "GreenPla" membership (No. 243).

Environmental circulation　of polylactic acid

What's GreenPla

"GreenPla" is a registered trademark of the Japan BioPlastics Association (JBPA), which is a N.P.O. engaging in study, research and development to promote commercialization of plastics which are made from non-petroleum resources, and are biodegraded. Yamanaka Industry Co., Ltd. is a member of the JBPA "Mark". For more details, please access the JBPA homepage.

User

Filters for green tea, black tea, healthcare tea, herb tea and others.

Physical properties

Product number	Mesh count Filaments/inch	Open space ratio(%)	Remarks	Sealing adaptability
SLA1	97	62	Transparent Type Biodegradable	Ultrasonic seal
SLC3	97	40	Semitransparent Type Biodegradable	Ultrasonic seal

• Material : Polylactic acid

• * The above physical properties are measured, but are not guaranteed.

Ingredient Hub and consulting

Ingredient Hub:  Desiree Nelson - Your Trusted Sourcing Partner:
My passion for tea, herbs, spices,  and the marketing and supplying of them has lead me to some more than interesting opportunities this year. I will announce them as soon as it is okay to.
I have managed to partner with some of the most respected tea and ingredients suppliers, as well as packaging companies in the U.S. and abroad.   I imagine this could only grow and get better.

What does this mean for your business?  
Relationships and integrity,  with your "tailored to suit" needs in mind ~ in ingredients AND packaging.  Small to large scalability- sourcing is about what YOU and your TIME.  I hope to save you that.  Send me your inquiries and let me work to solve your need > be it time, money, logistics, certifications,

Purpose:  INGREDIENT HUB: Matching my network of best partners in the tea/herb industry to match best tea business with client: per project or brand as a whole.  Collaborating domestically and globally. Using my knowledge and partnerships to best serve the client.

About Me :  Industry expert since 2002. You have a brand, need, or tea product or concept and I have the industry solutions.  I facilitate your brand (or generic / spot item)  to partner with the best fit for your concept in the industry. From competitive bidding on single origin ingredients as a spot purchase or contract, to R&D of a new line in bulk or bottled RTD, iced tea formulation to packaging, blending in smaller 50 lb quantities to 500 lbs plus... I will match you with the best supplier for all of your needs.    From pricing, logistics, to quality – there is a best fit for you, or a possibly a few.  Competitive bidding on pallet to container quantities – just shoot me an email.

Intimate knowledge of industry’s best: Iced teas, single origin sourcing of loose teas or tea bag cut, herbs, formulation, R&D, Single Serve cup formulation and packaging, ingredient sourcing, innovative packing in tins, packaging of tea bags ALL TYPES and sizes, pyramid bags, iced tea cello and filter bags, blending of teas, RTD bases and components.  STI Certified highest Level: Industry Specialist since 2002.  Partnering with the best in the Industry to bring you best products and pricing in ALL things tea and herbs.

Specializing in all things tea: bulk & container purchasing and management, R&D of new blends all types, packing of food service iced teas, all the way to development of single serve blends. By the case, pallet, container. Custom Formulation and R&D.        I can help you find partners and suppliers that have their finger on their pulse on the industry and excellent garden supplier relationships. Matching needs in best practices and QC Compliance, Kosher, Organic, Fair Trade, ISO 9001, HACCP, GMP, and SQF.

One Stop contact / Time  and Money saving:  Starting with the most important needs and backing in to the solve, I can help build sales for my partners as well as solve the needs of the client, be it short or long term > by contacting me as one source vs. several – thereby saving them time.  These needs may be: timing, logistics, spot fill, new project, competitive bidding, etc.  My partnerships are direct and pricing is same as direct. For the cases of rare, obscure or short ingredients that are outside my 10+ vendors, I will search and find for you outside my group for an upcharge to my find (brokering for you).

In conclusion:  Sending one email or call to me is the ultimate goal I would want my client to feel they need to do in order to find, solve, or collect on to solve their tea and herb needs of/by the industry’s best.  I will do the timely finding of all options for them.

Desiree Nelson

teaconsultantd@gmail.com              /           http://desntea.blogspot.com/

949.374.7552

Tea Harvest Times Chart

Tea Harvest Times - Chart

Desiree Nelson

Desiree Nelson...Your trusted Tea Sourcing Partner

You have a tea product or concept and I have the industry solutions.

I facilitate your brand to partner with the best fit for your concept in the industry. From competitive bidding on single origin ingredients, R&D of new line in bulk or bottled RTD, iced tea formulation to packaging, blending in smaller 50 lb quantities to 500 lbs plus, I will match you with the best supplier for all of your needs.        From pricing, logistics, to quality – there is a best fit for you, or a possibly a few.  Competitive bidding on pallet to container quantities – just shoot me an email. 

All areas of industry’s best: Iced teas, single origin sourcing of loose teas or tea bag cut, herbs, formulation, R&D, Single Serve cup formulation and packaging, ingredient sourcing, innovative packing in tins, packaging of tea bags ALL TYPES and sizes, pyramid bags, iced tea cello and filter bags, blending of teas, RTD bases and components….

2014 State of the Industry: Tea and RTD tea | 2014-07-11 | Beverage Industry

 2014 State of the Industry: Tea and RTD tea | 2014-07-11 | Beverage Industry

Consumer interest in healthy beverages has led to an evolving marketplace within the industry, experts note. For instance, the tea category has experienced sales increases due to consumer emphasis placed on healthy living habits, according to a January report from Santa Monica, Calif.-based IBISWorld titled “Tea Production in the US.”

The report also notes that beverage manufacturers are capitalizing on these trends through marketing efforts. “Backed by the scientific community, tea manufacturers are marketing the various health benefits of tea consumption, such as its effect on lowering cholesterol,” the report states. “Additionally, as Americans become more health conscious, they will seek alternatives to sugar-rich, carbonated beverages.”

Dana LaMendola, beverage analyst with Euromonitor International, Chicago, stated in Beverage Industry’s June issue that tea’s positioning as a functional beverage as well as consumer education have helped the U.S. hot tea market and ready-to-drink (RTD) tea market grow in both volume and dollar sales between 2008 and 2013.

According to Chicago-based Information Resources Inc. (IRI), sales for bagged and loose-leaf teas increased more than 6 percent to
$1.2 billion in sales for the 52 weeks ending April 20 in U.S. multi-outlets. Showing more modest growth, canned and bottled tea sales were up just more than 2 percent to $3 billion in sales.

Within bagged and loose-leaf teas, IBISWorld’s Hester Joen reported that although bagged tea sales make up a majority of the hot tea market, the loose-leaf tea format has cut into its market share.

“The consumption of loose-leaf tea has grown on the back of the growing popularity of specialty tea and coffee shops,” Joen said in Beverage Industry’s June issue.

Adding to this trend, Seattle-based Starbucks Coffee Co. and Oprah Winfrey collaborated to co-create Teavana Oprah Chai Tea. The tea blends cinnamon, ginger, cardamom and cloves with loose-leaf black tea and rooibos.

The category also has seen varietals outside of the black and green tea segments gain in popularity. “Herbal and white teas have also grown in popularity in recent years,” Joen said. “Herbal teas appeal to drinkers who are looking for a refreshing beverage, while white teas appeal to drinkers who want a lightly caffeinated beverage.”

 At Natural Products Expo West, Boulder, Colo.-based Celestial Seasonings, an operating unit of The Hain Celestial Group, introduced two new varieties to its Holiday Tea line: Caramel Apple Dream Holiday herbal tea and Cranberry Vanilla Wonderland Holiday herbal tea.

The category also has seen health and wellness trends benefit the RTD category as consumers seek an alternative to carbonated soft drinks, Euromonitor’s LaMendola explained. Brand owners continue to churn out new products that fit this billing, such as Atlanta-based The Coca-Cola Co.’s Honest Tea Unsweet Lemon Tea. The Pepsi Lipton Tea Partnership, a joint venture between PepsiCo Inc. and Unilever, also recently announced the release of Pure Leaf Tea & Lemonade.

However, the segment could be impacted by the proliferation of single-cup tea and liquid concentrates, experts note. “Consequently, liquid concentrates provide convenience to consumers who regularly consume iced tea,” IBISWorld’s Joen said. “While liquid tea concentrates have grown slightly in popularity, their impact on other tea segments has been minimal.”

Large players have entered the segment with AriZona Beverage Co., Cincinnati, and Nestlé Waters North America, Stamford, Conn., releasing lines last year.  

Single Serve continues to grow...let us help your brand win that segment in tea

Single Serve Snapshot from 2012

Overall single serve beverage market tripled to an $8 billion business in 2011.[1]

“Single-serve coffee pods are expected to reach $959.1 million in retail sales this year, up 32 percent, according to Euromonitor International. That would account for about 10 percent of the overall coffee market, which is expected to grow by only 6 percent this year.”[2]

o   Celestial Seasoning's single-cup pods grew 162% from April 2010-2011.[3]

o   Dunkin Donuts “In the quarter ended June 30, sales of K-Cups — single-serving coffee pods designed for home use with Keurig brewers — accounted for 40 percent of same-store sales increases at domestic Dunkin’ Donuts locations, which account for more than 70 percent of Dunkin’ Brands’ total revenue.”[4]

o   Starbucks single serve sales were $1.2 billion (15% of the overall single serve market) for 2011 alone.[5]

o   Snapple recently partnered with Green Mountain Coffee Roasters to create a new line of single serve iced tea products, expected to hit stores in 2013. [6]

The world’s largest beverage brands are investing heavily in developing single serve brewing devices.

CBTL (Coffee Bean & Tea Leaf)

                Tassimo

(Kraft Foods)

 Verismo (Starbucks)

                  

Keurig   (Green Mountain Coffee) 

Single Serve Tea Products

§  Cozy Chamomile Herb Tea K-Cup® Pack

§  Earl Grey Tea K-Cup® Pack

§  English Breakfast Tea K-Cup® Pack

§  Green Tea K-Cup® Pack

§  Green Tea with Pomegranate K-Cup® Pack

§  Mint Medley Herb Tea K-Cup® Pack

§  Green Tea Chai K-Cup® 

§  Chai Latte K-Cup® Pack

 

Hot

§  Antioxidant Max™ Blackberry Pomegranate Green Tea K-Cup® Pack

§  Antioxidant Max™ Green Tea Blood Orange Star Fruit K-Cup® Pack

§  Decaf Green K-Cup® Tea

§  English Breakfast K-Cup® Black Tea

§  Green K-Cup® Tea

§  India Spice Chai K-Cup® Tea

§  Lemon Zinger® K-Cup® Herbal Tea

§  Mandarin Orange Spice® K-Cup® Herbal Tea

§  Sleepytime® K-Cup® Herbal Tea

 

Iced

§  Half and Half Perfect Iced Tea

§  Southern Sweet Perfect Iced Tea K-Cup® Pack

§  Sweet Lemon Iced Tea K-Cup® Pack

§  Sweet Peach Iced Tea

§  Sweet Raspberry Iced Tea

§  Unsweetened Black Iced Tea K-Cup® Pack

 

 

§  Peppermint Herbal Tea

§  Serenity Green Tea

§  English Breakfast Tea

§  Chai Tea

§  Pomegranate Berry Fusion Tea

§  Earl Grey Tea

§  Mango Tea

 

§  Tazo®Awake™ Tea

§  Tazo®Zen™ Tea

 

§  Peppermint Tea

§  Lemon Blueberry Passion Tea

§  Chinese Green Tea

§  English Breakfast Tea

§  Chai Tea

§  Chamomile Tea

§  Earl Grey Tea

§  English Breakfast Decaf Tea

§  Cranberry Twist Green Tea

§  Orange Indulgence White Tea

 

 

§  English Breakfast Decaf Tea

§  African Rooibos Tea

§  Earl Grey Tea

§  Green Tea

§  Pure Camomile Tea

§  Pure Peppermint Tea

§  English Breakfast Tea

---

[1] Read more: http://www2.tbo.com/lifestyles/business/2012/sep/20/starbucks-single-serving-coffee-brewer-also-makes-ar-507149/

[2] Read more: http://www.chicagotribune.com/business/breaking/chi-snapple-kcups-to-roll-out-next-year-20121009,0,6946616.story

[3] Read more: http://digital.bnpmedia.com/display_article.php?id=1079065

[4] Read more: http://nrn.com/article/dunkin-brands-k-cups-key-2q-sales-success#ixzz28pG5Iqtt

[5] Read More: http://www2.tbo.com/lifestyles/business/2012/sep/20/starbucks-single-serving-coffee-brewer-also-makes-ar-507149/

[6] Read more: http://www.chicagotribune.com/business/breaking/chi-snapple-kcups-to-roll-out-next-year-20121009,0,6946616.story

BeverageIndustry – June 2012 : Category Focus, BeverageIndustry — June 2012

Category Focus

Stephanie Hildebrandt

Tea competes for share

Premium brands, myriad varieties entice consumers

WHEN IT COMES TO TEA, THE MORE “COLORFUL” THE BETTER. GREEN, BLACK, white and red teas remain popular varietals, while numerous flavor options, health benefits and positionings have helped to propel the category even further, according to experts.

Last year, sales of tea and ready-to-drink (RTD) tea increased 5.1 percent, reaching $4.3 billion in food, drug, convenience stores and mass merchandisers, excluding Walmart, according to Mintel’s July 2011 “Tea and RTD Teas – U.S.” report. Canned and bottled tea as well as refrigerated RTD tea drove growth in the category, the Chicago-based market research firm reported.

The canned and bottled RTD tea segment accounted for just more than 50 percent of the market share in the respective channels and showed the largest growth in the category from 2009 to 2011 at 19.2 percent, Mintel noted. The second-largest segment, refrigerated RTD tea, made up 13 percent of total category sales in 2011 and grew more than 15 percent from 2009 to 2011, the report notes. Bagged and loose tea sales growth remained small compared to the RTD segment, increasing 3.5 percent from 2009 to 2011.

Instant tea mixes performed the worst in the category, declining 8.1 percent from 2009 to 2011, the report states. Mintel does not expect the segment to recover, predicting a 13 percent decline from 2011 to 2016. In order to succeed in the instant tea segment, manufacturers will need to introduce mixes from brands that have established themselves in the RTD tea segment, the Mintel report suggests. Additionally, growth opportunities might be present among the African-American and Hispanic communities because both groups exhibit higher-thanaverage household consumption of instant tea mixes, according to the report. African- American consumers also report drinking RTD iced tea more often than the average, it adds.

OPTIONS ABOUND

Consumers are looking for healthier alternatives to soft drinks, says Richard Haffner, head of beverages research with Euromonitor International, Chicago. Tea can offer a healthy solution and RTD tea is a convenient format that delivers it, he says.

In the RTD tea segment, lemonade-and-tea drinks have gained in popularity. Both Snapple and Sweet Leaf launched lemonade-and-tea beverages this year. Dr Pepper Snapple Group, Plano, Texas, launched Snapple Diet Half ‘n Half Lemonade Iced Tea, a blend of lemonade and iced tea made with green and black tea, and Stamford, Conn.-based Nestlé Waters North America’s Sweet Leaf subsidiary launched Organic Half & Half Lemonade Tea.

The lemonade-and-tea flavors also have crossed over into the alcohol category. This year, St. Louisbased Anheuser-Busch, a wholly owned subsidiary of Anheuser-Busch InBev, expanded its Michelob Ultra beer brand with the limited-edition launch of Ultra 19th Hole Light Tea & Lemonade. The flavored malt beverage (FMB) contains 4 percent alcohol by volume, natural flavors and is sweetened with stevia-derived rebiana-A, making it a lighter alternative to traditional FMBs, the company says. Late last year, Cincinnatibased Arizona Beverage Co. Launched an FMB that merges tea and lemonade called Arnold Palmer Hard.

Superfruit flavors, such as pomegranate, acai and goji berry, also are being added to tea drinks to enhance their health and wellness properties, Haffner says. However, lemon remains the top flavor in the tea category, says Garima Goel Lal, senior beverage analyst at Mintel.

“There’s also other additives going [into teas] such as vitamins and stimulants, [which are] looking to segment the category along two lines: one is health properties, and the other is tea has caffeine so it can be a stimulant, so looking to make a more healthy appeal to an energy-type drink,” Haffner says.

Tea manufacturers are marketing the various health benefits of tea consumption, such as its reported effect on lowering cholesterol, and herbal teas are experiencing success as consumers increasingly use them for at-home medicinal remedies, said Los Angeles-based IBISWorld industry analyst Agata Kaczanowska in a statement.

Although they take a backseat to RTD teas, loose teas are showing promise, especially those with specialty and upscale positioning, Mintel's Goel Lal says. Plus, tea houses have been growing in popularity, she adds. According to World Tea Media, the tea retail trend hit its stride in 2011 and will continue its growth streak throughout 2012. Currently, the United States has approximately 3,500 tea retail locations, which is in contrast to the more than 25,000 U.S. coffeehouses, said Kim Jage, sales and marketing director for Las Vegasbased World Tea Media, a division of F+W Media, in a statement.

POLARIZATION AND PACKAGING

Overall, a premiumization trend is taking place in the tea category, which can take form in tea varietals and superior blends of teas, Haffner says. For instance, green, white and red teas can have a premium appeal. Likewise, Lipton Pure Leaf Iced Teas from the Pepsi Lipton Tea Partnership make use of superior fruit-andtea blends, he adds.

Supporting the premiumization trend, the tea industry is working to elevate consumers’ understanding about quality teas.

“The tea industry is educating tea consumers about quality, thus improving their palate and desire for better tea,” World Tea Media’s Jage said in a statement. “We’re still a bit behind here, but many retailers and manufacturers are making progress, and consumers are increasingly looking to buy better teas; they want to know what makes certain teas high quality rather than relying on the manufacturer’s word or enticing packaging.”

Consumers not only are purchasing superpremium teas, but also private-label teas, causing mid-priced teas to shrink, which denotes a trend toward polarization, Mintel’s Goel Lal says.

“Consumers do not perceive enough differentiation in terms of product attributes between mid-priced brands and private labels,” she explains. “Therefore, they decide to buy the cheaper brand, but at the same time they also are looking at the superpremium teas … which basically have proliferated in terms of flavor and quality, but also in packaging.”

In addition to positioning and flavor innovation, RTD teas are turning to packaging to attract consumers. The economic downturn influenced consumers to buy bulk packaging to save money. Therefore, the RTD tea category responded by introducing family-size packaging as well as multi-packs, Euromonitor’s Haffner explains.

During the recession, Atlanta-based The Coca-Cola Co. Introduced familysize packaging for its Gold Peak RTD tea brand that is merchandised in the refrigerated section, which helps the brand better compete, Mintel’s Goel Lal says. Gold Peak increased 12. 3 percent in the 52 weeks ending April 15 in food, drug, gas, convenience stores and mass merchandisers, excluding Walmart, club and liquor stores, according to Chicago-based SymphonyIRI Group data. Tea brands are increasingly finding their way into the refrigerated section in multi-serve sizes to increase their visibility and help them compete with juices, Goel Lal adds.

On the single-serve side, $0.99 pre-priced cans, which appeal to price-sensitive shoppers, performed well last year, she says. The prepriced trend is expected to continue throughout 2012, she adds.

Convenience via single-cup pods also could help grow the bagged and loose tea segment, according to the Mintel report. Just as the popularity of single-cup brewing systems has boosted the coffee category, these machines could have a positive side effect for tea, the report states. Mintel research found that 23 percent of all tea drinkers brew tea in single-cup beverage makers.

Based on the success of Celestial Seasonings’ single-cup tea pods, Mintel suggests that the pod packaging format might be the solution to the slow sales taking place in the overall bagged and loose tea segment. The brand’s single-cup pods grew 162 percent in the 52 weeks ending April 17, 2011, in food, drug, convenience and mass merchandisers, excluding Walmart, the report notes.

VARIETALS AND SWEETENERS

In the lead as the most popular tea varietal in the United States is green tea, according to Mintel’s “Tea and RTD Teas – U.S.” report. Approximately 77 percent of all tea drinkers report drinking green tea, while 70 percent of tea drinkers drink black tea, the report states. The next most-popular option is tea with fruit flavors or fruit juice, with 54 percent of tea drinkers opting for hybrid beverages. However, World Tea Media reports that blended teas took the No. 1 spot in terms of popularity with green tea as the second most popular variety for U.S. tea introductions, according to a Rockville, Md.-based Packaging Facts report titled “Tea and Ready-to-Drink Tea in the U.S., 4th Edition.”

This year, Breezy Spring LLC, Lakeland, Fla., launched Swirl Tea, which is a cold-brew green tea. World Tea Media expects this introduction to spark a larger consumer base and awareness of cold-brew green tea. Similarly, Twinings of London showcased its line of all-natural cold-brewed iced teas at this year’s Natural Products Expo West show. The teas are available in the following varieties: Peach, English Classic, Lady Grey, Green Tea with Mint, and Mixed Berries.

Last spring, Rancho Cucamonga, Calif.-based SereniTea launched a line of U.S. Department of Agriculture-certified organic green teas in single-serve liquid packets. The tea mixes can be poured into a hot or cold beverage, the company says.

Nearly half of tea drinkers say they drink herbal teas, such as rooibos or chamomile, and one-third consume white and oolong tea, according to Mintel’s report. Pu-erh and kombucha are still niche varieties with just 10 percent consumption incidence among tea drinkers, the report notes. Women are more likely to drink fruit-flavored teas and herbal teas, while pu-erh and kombucha teas appeal more to men, it adds.

Nevertheless, flavor is the No. 1 reason why consumers drink tea, according to the Mintel report. This explains why flavor innovation in RTD teas helped to drive growth in the segment, the report states. It also calls out the need for future flavor innovation in order to keep driving sales. The second most popular tea attribute is relaxation, and more than half of all tea drinkers report drinking tea for its antioxidant content, the report adds.

Consumers are not particularly fond of artificial sweeteners in their tea, however, because it can undermine the product’s pro-health image, according to the report. More than half of tea drinkers do not like the taste of artificial sweeteners in tea, and 42 percent will not buy tea sweetened with artificial sweeteners, it states. More than half of tea drinkers also believe that RTD teas contain too much sugar. As a result, nearly half of tea drinkers buy fewer RTD teas and brew tea more often at home to avoid consuming too much sugar and also to save money, the report states.

Earlier this year, Bethesda, Md.-based Honest Tea, a wholly owned subsidiary of The Coca-Cola Co., launched Not Too Sweet Tea, which uses organic stevia extract and organic cane sugar to lower the sugar and calorie content of the sweetened tea beverage.

All-natural sweeteners such as stevia, cane sugar and honey are increasingly making their way into RTD formulations, Euromonitor’s Haffner says, because they carry the benefits of using a higher-quality ingredient and being able to label a product as all-natural. Mintel’s Goel Lal adds that natural claims are very positive in the tea category because of its pro-health positioning. An all-natural platform makes the product even more appealing to consumers, she says.

HYBRID DRINKS

In addition to the lemonade-and-tea combinations, tea is making an appearance in juice drinks and other categories. This spring, Purchase, N.Y.-based PepsiCo announced its new Trop50 line of low-calorie tea-infused juices. The line combines peach and white tea, raspberry and green tea, and pear lychee and white tea.

To stay ahead of the innovation curve, Haffner expects tea-makers to maintain a focus on health and wellness by introducing antioxidant-rich varieties, and increase the energy attributes of the drinks by adding ingredients such as B vitamins, ginseng and guarana. Furthermore, to compete with soft drinks, the category might test sparkling tea varieties, he says.

The category also should put some focus on America’s aging population, whose support of tea’s anti-aging and health attributes will be a strong source of future demand and will drive sales of specialty products, especially for green and herbal teas, according to IBISWorld.

Mintel analysts expect total tea category sales to increase 8 percent to $4.7 billion this year, and forecast sales at $5.1 billion in 2013, which is an increase of 8. 3 percent. The RTD canned and bottled tea segment is expected to reach nearly $1.6 billion this year, while the bagged and loose tea, RTD refrigerated tea and instant tea mix segments are forecast to reach $798 million, $394 million and $272 million, respectively, this year.