No longer the first choice
During the recession, private label ready-to-drink (RTD) tea products experienced healthy growth as cash-strapped consumers turned to them instead of their national brand counterparts for refreshment. But with the economy on the rebound and consumer confidence on the rise, private label RTD tea sales declined in 2011 and 2012, with consumers returning to their favorite name brands – as well as new premium brands that differentiate themselves from \"everyday brands,\" states \"Tea and Coffee – US,\" a July 2012 report from global market research firm Mintel.
As for RTD coffee, while 76 percent of consumers buy some form of coffee each month, only 20 percent of those shoppers buy an RTD version, Mintel reports in its October 2012 \"Coffee\" report. RTD coffee is considered an occasional indulgence among shoppers, Mintel adds, with most consuming it once a week or less. If retailers want to improve store brand dollar share in the RTD tea and coffee category, then they need to win consumers over with unique and interesting flavors and appealing packaging.
Create curiosity
Uncommon flavor pairings is one emerging trend that retailers could take advantage of to set their products apart from others on the shelf.
\"We are seeing the tea category broaden its scope by offering customers more unique flavor varieties, exotic fruits, flavor fusions and provincial teas,\" says Laura Klibanow, opportunity manager, Imbibe, Wilmette, Ill. \"Flavor fusions allow brands to differentiate their products by pairing unfamiliar flavors with familiar ones, which creates a customer curiosity to try something new without diverting too much from their comfort zone.\"
She gives the example of spice and herbal infusions such as Lemon Almond, Szechwan Mint Sparkling Tea, Watermelon Mojito Tea and Ginger Rooibos.
Do
consider uncommon flavor pairings.
Dont
ignore consumers desire for functional benefits.
John Wilson, marketing manager for Edison, N.J.-based Allen Flavors Inc., agrees that unique tea flavors that pair a tea varietal with a non-tea varietal are gaining in popularity. He gives the examples of Apple Rooibos, Berry Rooibos, Lemongrass Pai Mu Tan, Peach Pai Mu Tan, Pear Honeybush and Raspberry Honeybush. Retailers could even go a step further and look into Tea Essence Blends, a series of flavor profiles proprietary to Allen Flavors that are meant to enrich the palatability of sweet, green or black tea types. These profiles include leafy, floral, creamy, caramelized, woody, smoky, hay and candy notes – and more.
When it comes to RTD coffee, flavors such as Italian Espresso, Vanilla, Ginseng, Cappuccino, Vanilla Nut, Double Shot Caffeine, as well as fruit-flavored coffee, are gaining in popularity, says Frank Chessman, director of sales and marketing, U.S. Beverage Marketing, Newport Beach, Calif. On top of that, he adds, consumers increasingly are looking for low-calorie, enhanced and all-natural drinks. Gourmet and premium blends that offer functional benefits such as antioxidants or energy boosts are a growing trend within the RTD coffee category, he adds.
This trend also is popping up in the RTD tea category.
\"Functionality is entering the RTD tea arena as well with such additions as extra energy, relax, vitamins, superfruits and other wellness ingredients to fortify the already good for you properties of the tea itself,\" Wilson says.
Moreover, whats not in these beverages is just as important to consumers as what is in them.
\"There is a consumer perception that artificial ingredients arent healthy, so consumers are looking for clean labels. With RTD teas and coffees, shoppers are looking for natural sweeteners and preservative-free products,\" Klibanow says.
When it comes to functional teas, Mintel reports that 59 percent of all RTD tea buyers look specifically for teas with an all-natural positioning and real sugar over high-fructose corn syrup or artificial sweeteners; 45 percent of RTD tea shoppers look for low- or no-calorie teas.
Eye-appealing packaging
Packaging appeal really depends on the retailers customer, but, according to Mintels \"Tea and RTD Teas\" report, premium packaging and attractive in-store displays seem to be increasingly important to consumers.
\"Just because its a store brand doesnt mean it shouldnt have great packaging and product quality in addition to being value priced,\" says Josh Groff, director of marketing for Mercer Island, Wash.-based Advanced Refreshment.
When retailers work harder on product development and packaging design, they will gain a stronger entry into the category that will then be more comparable to a branded offering, he adds. Part of that process, he says, is thinking about what types of bottles retailers are filling with their tea and coffee products. For example, packaging that is environmentally friendly – such as 100 percent recycled PET – can be a real game-changer, he adds.
Do
update packaging to give a premium look and feel.
Dont
overlook the power of impulse purchasing.
When packaging RTD teas and coffees, retailers also should take into account the fact that size matters. Steve Fay, executive vice president of Roscoe, Ill.-based Berner Food & Beverage Inc., mentions that one national brand introduced with success 11-ounce and 13.7-ounce bottles. Instead of making the consumer buy four 9.5-ounce bottles, now the consumer can buy one larger bottle to drink on the go, he says, and its been a huge hit.
Mintel adds that 42 percent of all RTD tea shoppers report buying RTD tea on impulse. Therefore, attractive packaging and displays in strategic locations throughout the store, specifically in plain view on end caps and at the checkout register, will help retailers capitalize on this impulse behavior.
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| Look whats new |
| Kroger Mocha Iced Coffee Beverage is said to be made with Arabica coffee blended with real milk and cream, and have a creamy and rich mocha flavor. This kosher-certified product, from Cincinnati-based Kroger Co., is naturally flavored and retails in a 64-fl.-oz. carton. |
| New from Brampton, Ontario-based Loblaw Companies Ltd. is Presidents Choice Sparkling Rooibos Tea with Lemon & Cranberry Flavours. Described as containing no colors or artificial flavors, the beverage contains 100 calories per can and retails in a carton of eight 355ml recyclable cans. |
| McDaniels Coffee Co. Vanilla Iced Coffee from St. Louis-based Save-A-Lot is made with 100 percent Arabica coffee and is a ready-to-drink kosher-certified product. Made with premium beans, it is said to be rich and aromatic and feature a coffeehouse taste for a fraction of the cost. It retails in a half-gallon carton. |
| Smart Sense Lemon Black Tea is low in sodium and contains antioxidants that are naturally present in tea. The product, from Hoffman Estates, Ill.-based Kmart, retails in a pack containing 12 16.9-fl.-oz. recyclable PET bottles. |
| Source: Mintels Global New Products Database |