Bottled Up Demand: The Rise of Ready-to-Drink Beverages
Originally Published: Gourmet Retailer, July 7, 2015
Author: Lynn Petrak
Gourmet stores can gain purchases – impulse or otherwise – by offering ready-to-drink (RTD) beverages on the shelf or in refrigerated cases. “There is a certain percentage of crossover , depending on if it’s hot outside and if they want something cold to drink or are interested in an easy, delicious tea,” says Kara Rosenberg, tea buyer for Wedge Community Co-op in Minneapolis.
According to Jane Briscow, gourmet food buyer for The Little Traveler, RTD teas are a nice complement to brew-at-home teas sold at the Geneva, Ill., specialty food store. “We do have bottled teas in our refrigerator case, including some white and green teas. A lot of people have moved from soda and tea is a wonderful substitute,” she says, adding that one surprise hit is a green tea soda that has become a best seller over the past year or so.
Within the overall tea category, several segments are thriving. In the past decade, the RTD tea segment has shot up to more than $5.2 billion, a growth of 15-fold, according to a report from the Tea Association of the USA. Specialty teas are also on the rise, with the Tea Association pegging specialty teas as the second-fastest growing segment of the tea industry. The total wholesale value of tea in this country alone grew from less than $2 billion in 1990 to more than $10 billion today, according to the Tea Association report. The market research firm Global Research & Data Services projects the global tea industry to expand by a rate of 5.8 percent in the coming years.
Instead, consumers are seeking out RTDs such as bottled water, teas and stevia-sweetened beverages.All this comes at a time when sales of sugary sodas and diet sodas have been declining. Consumers are increasingly aware of sugar intake and have health concerns about artificial sweeteners found in diet soda. Forty-six percent of consumers (and more than 50 percent of consumers under the age of 35) agreed that artificial sweetener is “unhealthy” in a Mintel survey.
According to Dan Bolton, a beverage retail consultant and a presenter at the 2015 World Tea Expo, RTD teas promoted as good or good-for-you have the additional onus of sustainability. “Critical in my view is PET and sustainable messaging on legitimately sustainable materials. Seals attesting to compostability are of growing importance,” he observes.
Package design is also a signal of product uniqueness. “Look for some exciting new innovations in shaping bottles,” Bolton predicts.
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