Teens Driving Growth Of Iced Teas Across All Meals

Teens are favoring bottled teas over other drinks, per an NPD Group study showing that servings of both coffee and iced tea at commercial food service outlets has increased by 12% since 2001. The consultancy says the quick-serviced segment is leading the trend.

NPD notes that consumers, for whom iced tea is mostly a lunch and dinner beverage--while coffee is a morning beverage--have increased iced tea consumption across all meals, especially in the morning and for afternoon snacks. Demographically, growth has been strongest among under-18 consumers, with double-digit increases among teens.

Bonnie Riggs, who is restaurant analyst with NPD, says in the report that the growth in tea consumption hasn't been driven by marketing efforts by restaurant operators, which she says is an opportunity they are missing.

John Sicher, editor/publisher of Beverage Digest, concurred that perceived health benefits are driving category growth. "Ready-to-drink teas are posting very strong growth now because many consumers are beginning to see teas as a health and wellness beverage, especially with the proliferation of green teas," he says.

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Gerry Khermouch, editor of West Nyack, N.Y.-based Beverage Business Insights, says teas are doing well across brands, benefiting from a move by younger consumers away from sodas to flavored bottled water and energy drinks.

"Younger consumers' preferences aren't settled out yet, and there are a lot of choices," he says, adding that while mainstream bottled brands like Lipton are doing well, they lack mystique among younger buyers who want to be cutting edge. Meanwhile, value brands like Arizona--which offers 99-cent, pre-priced, 24-ounce cans--are doing well.

"The sweet taste profile does well with teens," he says.

Another brand to keep an eye on is HonesTea, per Khermouch, who notes that the label began with an unsweetened line marketed for being brewed from real leaves, versus mixed from powder. "They have expanded to lightly sweet teas, and a broader positioning as a brand for everyone."

Entries likely to appeal to teens: a new crop of tea-based energy drinks without the macho factor of traditional energy drinks like Red Bull. "You have this exploding segment of energy drinks," Khermouch says, but warned that two thirds of the population are alienated by the machismo of energy drink positioning.

"So, now you see white tea and green tea energy drinks as an option." And, soon, vitamin water/energy drink hybrids such as the forthcoming Glaceau Vitaminwater product Vitamin Energy, which, per Khermouch, will come in three flavors in 16-ounce cans, all based on rooibos (so-called "red tea") herb. "Everyone's convinced there is a 'better-for-you energy' segment if they could just crack it."

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