Ready-To-Drink Tea: Opportunity Or Challenge?

Ready-To-Drink Tea: Opportunity Or Challenge?

Ready-To-Drink Tea: Opportunity Or Challenge?

It's no secret many beverages are loaded with sugar that can lead to tooth decay, obesity and other serious problems, such as diabetes, high blood pressure and heart disease. Many also lack nutritional benefits, such as vitamins, minerals and antioxidants. That’s why many health-conscious consumers have turned to ready-to-drink tea, which is projected to garner $5.3 billion in U.S. sales this year according to IBISWorld.

Depending on which variety they choose, tea can be loaded with beneficial catechins, polyphenols, flavonols and glycosides, and can contain far less caffeine than coffee or energy drinks. Yet, until recently, ready-to-drink tea also contained high amounts of sugar to offset the bitterness caused by the way it was processed. That’s because for the past two decades, ready-to-drink tea was formulated and packaged at soft drink plants, which meet federal regulations for high-acid drinks. When tea follows the same assembly lines as high-acid beverages, manufacturers alter the pH of the naturally alkaline tea—which most do by adding ascorbic acid—and add sugar or other sweetener to counter the negative flavor effects of this process.

How Has The Industry Changed?

Now, companies seeking to appeal to premium tea drinkers are considering alternative formulations and, as a result, must consider different ways to process their products. Aseptic processing enables the production of high-quality, ready-to-drink tea while cartons help preserve the original brewed tea quality and render it to be shelf-stable for up to a year without the need for preservatives.

Aseptic processing provides flash and gentle heat treatment, which is equally effective with high- and low-acid products, Aseptic cartons keep oxygen and light away from brewed tea, maintaining more of its healthful properties. Japanese tea giant Ito En, which uses aseptic cartons for some of its higher end teas, is moving into the U.S. market and could be a trendsetter.

Tetra Pak Vice President of Marketing and Product Management Suley Muratoglu discussed how to appeal to high-end tea drinkers in a recent Web Packaging article.

A few of his suggestions include:

  • Sell a Cultural Experience - Companies shouldn’t overlook the opportunity to tap into the desire, particularly of Millennial shoppers, to feel worldly and cultured. These tea drinkers know their oolong from their Darjeeling, and packaging and marketing should be short on ingredients and long on history and culture to connect with this aspiration.
  • Consider Value-Added Tea Products - Kombucha and the less well-known Jun are two fermented tea products that hold health allure even beyond regular tea. What’s more, non-tea steeped drinks such as rooibos, ginseng and elderflower are growing sales in the tea space. In addition, fruit-tea hybrids are burgeoning, far beyond the standard lemonade-black tea blends. But don’t forget to minimize added sugars to stay on trend.

Learn more about the opportunities and challenges for ready-to-drink tea.

Ready-to-drink Tea Market Projected To Grow Substantially

Innovative RTD teas are a good investment for beverage companies given the stats: over half of Americans, or 158 million of us, drink tea on any given day. And about 85 percent of it is iced, which is why ready-to-drink tea sales have grown more than 15-fold in the past 10 years. This comes from the Tea Association of the U.S.A., which has a fact sheet that makes a compelling case for drinking the beverage. No wonder IBISWorld projects the ready-to-drink tea market will grow by 3.3 percent this year.

"It’s the fastest growing segment," noted a Tea Association executive last fall in World Tea News. He went on to describe how the market has tripled to $3 billion over the last 15 years. With consumers seeking beverages that offer convenience, health benefits and flavor, tea purveyors have an opportunity to increase their shares of the ready-to-drink market.

Who Drinks RTD Tea?

While consumers of all ages appreciate the convenience of a grab-and-go beverage, this is particularly true for Millennials—especially the youngest members of that generation, according to Sterling Brands. Notably, college students appreciate ready-to-drink tea, because they don’t have to prepare it, notes World Tea News. Still, Sterling Brands projects the greatest market growth possibilities come from Baby Boomers because many of them are remaining active and paying careful attention to their health—a development that also relates to another trend explained in our story Grow Food And Beverage Sales With Nutritionally Enhanced Foods, which highlights the nutraceutical and probiotic trends.