• November 11, 2009

After several years of exceptional sales gains, ready-to-drink teas' growth has slowed considerably in the past two years, as consumers have turned to less convenient but much cheaper bagged and loose teas, according to a new Packaged Facts report, "Tea and Ready-to-Drink (RTD) Tea in the US: Retail, Foodservice and Consumer Trends."

Canned and bottled tea, the largest component in RTD, slowed from growth rates exceeding 20% in both 2006 and 2007 to less than 1% growth this year, Packaged Facts estimates.

Meanwhile, sales of bags and loose tea, which had been in decline for two years, are projected to show 3% growth this year.

Also, while overall new tea product launches have slowed this year, specialty and premium teas -- including exotic flavors of existing brands -- continue to see strong sales growth in the U.S. and yield "extremely high margins" for retailers and foodservice operations, according to World Tea Expo president George Jage, the report points out.

Packaged Facts expects the category to resume double-digit growth as the economy improves, driven in large part by consumers' awareness of tea's health benefits. --Karlene Lukovitz