Hot Category: Coffee and Tea
Hot Stats
Private label packaged coffee sales for 52 weeks ending March 27 nearly reached $1.7 billion, up more than 6% from two years ago. — NielsenIQ
Private label packaged tea sales for the same period exceed $110 million, up 5.7% from a year ago. — NielsenIQ
Retail coffee sales were expected to hit nearly $16 billion in 2020. — Packaged Facts
Private label “single-cup coffee” was the leading coffee brand in March 2020, amassing more than $1 billion in sales, ahead of the Starbucks and Keurig Green Mountain brands. — IRI
Private label “ground coffee” was third for the 52 weeks ending March 22, 2020, generating more than $434 million, a 10% market share. — IRI
Revenue in the tea category expects to pass $12 billion in 2021, growing annually by 5.7% until 2025. — Statista
With suppliers rushing out all types of new flavors and types — and consumers demanding a wide choice of products — the coffee and tea category is booming at mass retail.
And, that means great news for those companies in the private label and store brand segment.
According to Packaged Facts, retail coffee sales hit nearly $16 billion in 2020, with NielsenIQ noting that private label packaged coffee sales for the year ended March 27, 2021, reached $1.7 billion, a 6% increase in two years. NielsenIQ said that private label packaged tea sales for the same period exceed $110 million, up 5.7% from a year ago.
So where does that leave retailers in this hot category? Many industry officials said that merchants are being forced to expand their selection of products in these categories as more consumers look for varying types of flavors and types — and across a wide range of price points.
“Like most food and drink categories, retail sales of coffee and tea have benefited greatly during the COVID-19 pandemic at the expense of out-of-home sales and as the general trend toward ‘premiumization’ continues,” said Bosmat Levi, head of the international division of Tel Aviv, Israel-based Wissotzky Group, a 170-year-old company in the tea category. “Looking at hot tea specifically, the category continues to evolve with a strong trend toward products with specific wellness claims.
“Traditional blends such as English Breakfast and Earl Grey are still very relevant but the growth and interest in the category is coming from blends of teas and herbs with holistic benefits as well as great taste. Consumers seek out flavor and benefit and are open to new experiences which injects dynamism into the category and makes it an exciting place for brands and private label alike.”
There is other good news for private label products in this category. According to IRI, private label “single-cup coffee” was the leading coffee brand in March 2020, amassing more than $1 billion in sales, ahead of the Starbucks and Keurig Green Mountain brands. And, private label “ground coffee” was third for the 52 weeks ended March 2020, generating more than $434 million, a 10% market share.