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Focus ReportTea: Rediscovering an Ancient Beverage in the 21st Century
June 13, 2013
2 Min Read
Tea is an age-old beverage, yet it's on track to experience explosive market growth in the coming years, particularly in North America. In fact, savvy business market analysts, such as Mintel, forecast the entire U.S. tea marketplace will double in value by 2016. Specialty tea has enjoyed a 15-year growth run, estimated at an average of 10% per year (in all product formats and distribution channels, compound annual averages). Specialty tea not only survived the economic downturns of the last few years, but maintained its solid growth and expansion profile during this period.
Capital started to flow into the category in a big way in 2012, marked by a frenzy of acquisitions and retail expansions. Examples include:
Sara Lee's acquisition of Tea Forte;
The acquisition of micro-size Talbott Teas on ABC's "Shark Tank" program, followed by an almost-immediate flip to national chain Jamba Juice;
Canadas breakout tea retail chain, Davids Tea, raised private equity capital for expansion into the United States; and U.S.-based Teavana (Americas first publicly traded specialty tea venture) acquired Canadas Teaopia tea chain and was, in turn, acquired by Starbucks; and
Harney & Sons Fine Teas, Stash Tea and Tazo all launched new retail tea outlets.
In this Report, Brian R. Keating, founder of Seattle-based Sage Group®a specialty tea think tank, publisher and natural products consultancydiscusses the vibrant activity in the tea market. From its natural health-boosting benefits and versatility to an influx of new products and tea chains, specialty tea is attracting consumers of all ages. Areas of interest to watch in the coming year include RTD (ready to drink) tea beverages, more sustainable packaging options and an increasing spotlight on tea as a key ingredientallowing its functional properties to shine, rather than masking tea beverages with high sugar contents.
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