Skip to main content

Iced tea can at times be among the simplest of refreshments. The category conjures up images of a tall, cool ice-filled glass of sweet (or not-so-sweet) drink. But as ready-to-drink tea sales rebound from pandemic challenges, the market for traditional-styled products remains crowded and dominated by a handful of brands. As tea startups look to stake out their share of stomach, they increasingly have to do more than just refresh.

According to SPINS, the ready-to-drink tea category (plus select mixes and iced tea bags) grew 8.2% in MULO to $4.2 billion during the 52-week period ending June 13. Of that, refrigerated products made up $1 billion (up 7.3%), while shelf stable drinks accounted for $2.7 billion (up 10%).

But those numbers don’t necessarily represent a broad range of high-performance companies. Over $3.5 billion of those sales come from just the top five brands: Pure Leaf, AriZona, Lipton, Gold Peak and Snapple. According to IRI, Pure Leaf (which is manufactured by Lipton and PepsiCo) leads the category, with sales up 13.5% to $910 million in the 52-week period ending June 13, followed by AriZona, which grew 2.2% to $598 million in the same period. Even among the other high performing brands outside the top five, the category is still weighted towards the same select conglomerates. The Coca-Cola Company, for example, also owns Peace Tea (up 20.8%) and Honest Tea (down 20.4%) in addition to Gold Peak.

While RTD tea sales in retail have remained solid, the pandemic also had a significant drag on the category last year by hitting the pause button on the businesses of restaurants and other on-premise accounts. A December report by Euromonitor International stated that the RTD tea category had faced declining sales in 2019; while the retail business rebounded in 2020, the closure of on-premise accounts resulted in double digit declines for the category’s total sales. In particular, unit price growth suffered since prices are typically higher for on-premise stores and consumer stockpiling led shoppers to focus on multipack formats — bringing down the overall average.

But as the category is steeped in broader beverage trends towards wellness, functionality, and low and no sugar products, which could help during the recovery, the Euromonitor report noted.

“In general, the COVID-19 pandemic has strengthened brand movements which were already present within the category,” the report stated. “More indulgent RTD tea brands with higher sugar content have continued to lose share in 2020, whilst kombucha brands and more health-positioned brands have increased.”

Likewise, Whipstitch Capital managing director Mike Burgmaier, speaking from an M&A perspective, pointed to strong growth in the kombucha category as one of the most promising avenues for tea-based beverages, while tea-based energy drinks and yerba mate likewise are poised for strong growth. Acquisitions of traditional iced tea brands are sparse, he said, and two of the most high profile acquisitions in recent memory — Honest Tea by Coke and Sweet Leaf by Nestle — are now a decade in the past.

But products like Hoplark HopTea and yerba mate brand Guayaki, that bend category definitions, are both posting strong growth and present a path forward, he said. In particular, Burgmaier praised Hoplark, which makes a line of teas brewed with hops, giving the drinks the texture of a full-flavored, non-alcoholic beer, as providing a major point of differentiation in the category that is resulting in strong sales. While they all service different niches, kombucha, yerba mate and more unique brewed products like Hoplark are all expanding the use occasions for tea, helping put them in a different space than other tea startups fighting to draw market share from Coke, Pepsi and AriZona.

“Basic tea is a very difficult prospect, because there’s so many big players that just absolutely dominate,” Burgmaier said. “It’s a relatively low-priced product that is available everywhere. So you obviously have to differentiate your offering. Being extremely low calorie, low sugar or zero sugar — that’s almost a must have if you’re going to break out and differentiate. Having some type of functional angle, I think, is also very important.”

Expanding Tea

For Hawaii-based Shaka Tea, positioning its line of organic, zero sugar and caffeine-free teas as a functional beverage has been key to the brand’s growth, according to husband and wife co-founders Harrison Rice and Bella Hughes. The five-year-old startup announced in July that its four SKU line of iced teas are now available in over 6,000 stores nationwide. Sales are up 240% year-over-year the company has grown to over 20 employees, its founders say.

While its glass-bottled drinks contain just Hawaii-grown tea, flavoring, and monk fruit — putting it in that traditional iced tea category — the company has leaned on other marketing messages, including friendliness to Keto and Plant-Based diets to drive trial and bring in health-minded consumers. As well, Hughes said the brand’s focus on non-caffeination has been a consistent selling point, especially for consumers seeking midday refreshment that won’t keep them up all night. While Shaka is hardly the only caffeine-free beverage on the market, the brand has married the trait into its overall clean label positioning to present the brand as something akin to a complete health package.

“Every single thing you put in your body has to have some health benefit now, because everything is about immunity,” Hughes said, noting that the brand’s retail expansion comes as buyers have been more “focused” in their selections.

Shaka Tea is now looking to expand its platform with a new 2 oz. tea-based Immunity Shot. Set to launch this fall, the passion fruit-flavored shot contains turmeric and antioxidant-rich tea mamaki. According to Hughes, the product will roll out in a limited run in Hawaii, including in the hospitality channel, before expanding elsewhere.

The better-for-you shots category has seen an influx of innovation over the past few years, including from brands like Ethan’s and So Good So You, and the unique format has helped to drive sales growth for slowing categories like juice. But Shaka aims to be among the first to introduce a tea-based shot to the market, marking another way for a startup tea brand to expand its business.

An increasing number of brand marketed as better-for-you plays are also now hitting the mainstream. In March, startup brand Weird Tea launched into the convenience channel with a line of sweetened, organic canned teas. Founder Jason May — the former CMO of Rockstar Energy Drinks — said he plans to disrupt the category by marrying the ethos of premium boutique teas with vibrant branding targeted towards the mainstream. Established tea brands are also now looking to extend their offerings with new emphasis on function and wellness: Rishi Tea, primarily a loose leaf and sachet tea seller, launched its ready-to-drink Sparkling Botanicals brand last year and Honest Tea debuted a yerba mate line in May.

Earlier this year, Novamex-owned canned iced tea Steaz announced a brand refresh that included new positioning as an “antioxidant brew,” added zero sugar products and a new line of yerba mate based extensions. The products were also reformulated to remove ingredients that “didn’t make sense,” including inulin and erythritol, according to Mike Fransz, director of marketing at Nova Naturals, the Novamex beverage division that also includes brands like C2O and Tio.

Historically Steaz’s footprint has been deepest within the natural channel, but Fransz said the rebrand is now helping to break deeper into the conventional channel, including Big Y, Giant Carlisle and HyVee, with several larger retail chains slated to go online this fall. The broader portfolio is also growing the company’s place on the shelf within existing natural accounts: the yerba mate line, which launched as a Whole Foods exclusive in the fall, is poised to enter new accounts later this year, primarily within the natural and specialty channel.

“For the last 15, 16 years Steaz has really crafted what we call ‘flavorful teas for the mind, body and soul,’” Fransz said. “The introduction of yerba mate is just really the fun expansion of that and continuing to drive value to the consumer by focusing on great taste in a unique way that delivers upon something that fits their mind, body and soul.”

That would be more than refreshment, indeed.

Source: Hybrid Theory: Tea Brands Embrace Cross-Category Definitions – BevNET.com

Recent coffee & tea trends

Coffee and TeaFlavourFood science
September 10, 2021

Scientists say ‘crisp’ water makes hot tea taste better | Slashgear

If you love to kick off the morning with a hot cup of black tea, a new study details how to make it taste better. As it turns out, the…
Coffee and TeaFood science
September 7, 2021

Beanless coffee? It’s in the works | The Takeout

Photo: Annette Riedl/picture alliance (Getty Images) An environmentally-focused startup is focusing on recreating coffee flavors without the beans. Coffee requires a lot of natural resources to grow and harvest. In fact, according to Our…
Beverage trendsCoffee and TeaFlavour trends
September 2, 2021

A new drink trend sees spirits infused with your favourite cuppa | Daily Mail Online

Helen McGinn gives verdict on a selection of the latest boozy teas as the sales of alcoholic teas rise. Pictured: Noveltea Earl Grey Tea with Gin Around 100 millions cups…
Coffee and TeaFood science
August 31, 2021

These are the molecules that help make coffee awesome | ABC News

A worker holds coffee berries as they look to sun dry them at the Bradegate coffee factory in Karatina, near Nyeri, Kenya, June 3, 2021. Coffee lovers value not only…
Coffee and TeaFlavour trends
August 30, 2021

New Jaffa Cake flavoured coffee hits Lidl shelves | Glasgow Times

Where to buy new Jaffa Cake flavoured coffee Never mind the never-ending debate over whether it should be classed as a biscuit or a cake. Beanies Coffee have created a…
Beverage trendsCoffee and TeaFlavour trends
August 30, 2021

Starbucks Fall Menu 2021 – What Are the Fall Drinks at Starbucks? | The Pioneer Woman

CHELSEA KYLE Autumn has officially arrived at Starbucks! Every year, fall fanatics with a penchant for caffeine eagerly await the return of pumpkin-flavored drinks. The company's annual shift to its most-loved…
Beverage trendsCoffee and TeaFlavour trends
August 26, 2021

Starbucks’ new apple crisp macchiato joins pumpkin spice latte on the fall menu | CNBC

Starbucks’ new Apple Crisp Macchiato, Source: Starbucks Starbucks is kicking off autumn with the apple crisp macchiato, the latest limited-time addition to its seasonal lineup. The espresso drink will be joining…
Coffee and TeaFood science
August 25, 2021

Coffee’s Rich Taste and Texture Are Shaped by These Important Molecules | Inside Science

Chris Campbell via Flickr Researchers pinpoint small compounds responsible for coffee's astringency, chalkiness and mouthfeel. (Inside Science) -- Coffee lovers value not only a strong aroma from a good cup…
Beverage trendsCoffee and TeaFlavour trends
August 17, 2021

7-Eleven Wants You To Enjoy A ‘Mini-Vacation’ With These 2 New Drinks | Mashed

Shutterstock BY HOPE NGO/AUG. 16, 2021 11:48 AM EDT If you think your coffee game needs to move beyond the realm of the typical flavors like vanilla or hazelnut, have we…
Beverage trendsCoffee and TeaFlavour trends
August 11, 2021

Starbucks unveils two new pumpkin spice products | Food Business News

Source: Starbucks Corp. Starbucks is signaling the incoming fall season with the rollout of its retail pumpkin spice products, including two new offerings. Inspired by the Pumpkin Spice Latte made…
Beverage trendsCoffee and TeaFlavour trends
August 10, 2021

Pumpkin Spice Cheesecake Whipped Coffee might be fall’s best dessert recipe | Foodsided

Pumpkin Spice Cheesecake Whipped Coffee, photo provided by Nescafe While whipped coffee might not be quite as trendy, this Pumpkin Spice Cheesecake Whipped Coffee recipe could be fall’s best dessert.…
Beverage trendsCoffee and Tea
July 30, 2021

Hybrid Theory: Tea Brands Embrace Cross-Category Definitions | BevNET.com

Iced tea can at times be among the simplest of refreshments. The category conjures up images of a tall, cool ice-filled glass of sweet (or not-so-sweet) drink. But as ready-to-drink…
Beverage trendsCoffee and TeaEthnic, International & fusionFlavour trends
July 20, 2021

Pandan Latte Recipe: Why the Southeast Asian Flavor Is Popular in Coffee | Thrillist

PHOTO COURTESY OF MADAME VO; DESIGN BY GRACE HAN FOR THRILLIST Pandan is one of my favorite flavors of all time. It was the flavor of birthday cake my mom…
Beverage trendsCoffee and Tea
July 20, 2021

Here’s Why You Should Switch To Infused Tea | TheHealthSite.com

herbal tea infusions are a great substitute to aerated or fizzy drinks, plus they provide great health benefits. Infusing tea by brewing it with flowers, fruits, spices, herbs, and botanicals…
Coffee and TeaFlavour trendsFood science
July 12, 2021

Tea quality seen as seriously affecting prices | The Island

Tea brokers reports this week commenting on price trends said price decreases in the first 6 months of this year’s trading compared to YOY 2020, are clear indication that tea…
Coffee and TeaFlavour trends
July 6, 2021

Dunkin’ Dropped 4 Sweet New At Home Coffee Flavors, Including Chocolate Pancake | Elite Daily

DUNKIN Running on Dunkin’ is getting a morning upgrade, thanks to four dessert-inspired additions to its At Home collection. For all those times you’d rather enjoy your favorite Dunkin’ treats…
Beverage trendsCoffee and TeaFlavour trends
June 25, 2021

Starbucks Japan is releasing 47 brand new Frappuccinos | Dished

Starbucks Japan Now, this is a way to celebrate! It’s been 25 years and Starbucks Japan is celebrating in a huge way with 47 new Frappuccinos representing every prefecture in…
Beverage trendsCoffee and TeaFlavour trends
June 21, 2021

The Espresso Martini Is Everywhere (Again) | The New York Times

Credit...David Malosh for The New York Times. Food Stylist: Barrett Washburne. One need only look at our 21st-century devices — or out our old-fashioned windows — to know that 1990s…
Coffee and TeaDairyFlavour trends
June 14, 2021

Milk & Leaf’s tea-infused ice cream is our new summer favorite | Seattle Refined

(Image: Gisella Bustillos) Seattle is synonymous with coffee. We live and breathe by the roasted beans, using it as a social glue to meet and catch up with friends. But…
Coffee and TeaFood science
June 14, 2021

Here’s How AI Can Determine The Taste Of Coffee Beans | Forbes

Coffee cups are pictured in the tasting area of the Vanibel cocoa and vanilla production facility, a ... AFP VIA GETTY IMAGES Artificial intelligence (AI) is predicted to reach $126 billion by…
Coffee and TeaEthnic, International & fusion
June 14, 2021

Tea bombs to fruit infusions: Here’s how your regular tea is getting a new flavour | Times of India

Sip on an offbeat infusion this season Who says all the food trends happen only with coffee? There’s a lot of innovation happening when it comes to tea, too. Your…
Beverage trendsCoffee and TeaFlavour trends
June 13, 2021

Canada’s new hard tea is making an eco-friendly impact | Dished

We’ve all been fantasizing about it for months: warm, sunny days spent outdoors. Our daydreams have been filled with sun-drenched afternoons at the beach and breezy hikes through the playground…
Beverage trendsCoffee and TeaFlavour trends
June 11, 2021

San Antonio-based artisan tea company Special Leaf debuts sugar-free hibiscus flavor | Flavor

Instagram / specialleafco Move over, Southern sweet tea. There’s a new player in town. San Antonio chef Chris Cook has been preaching the gospel of olive-leaf tea since 2018, sharing…
Beverage trendsCoffee and TeaFlavour trends
June 7, 2021

Cartel Coffee Lab to launch a new menu celebrating flavors of the Southwest | Tucson Foodie

Cartel Coffee Lab Pastry Display Case The Arizona-based Cartel Coffee Lab, which is known for sourcing, roasting, and brewing flavorful coffee and cold brew, is launching a new menu on Monday,…
Coffee and TeaDairyFlavour trends
June 7, 2021

M&S launches ‘scrumptious’ new ice cream flavour which has fans saying they have ‘died and gone to heaven’ | MyLondon

M&S FANS CAN'T GET ENOUGH OF NEW ICE CREAM FLAVOURS When it comes to food products, Marks and Spencer are king of the quintessentially British. They are also experts at…
Beverage trendsCoffee and Tea
June 7, 2021

Here’s What Happens When You Combine Coffee With Your Protein Shake | Eat This Not That

Think of taking two of your most power-packed daily rituals and blending them together in one mug. That's exactly what some coffee lovers are doing with cold brew and protein shakes. Before…
Beverage trendsCoffee and Tea
June 4, 2021

Yaupon Tea: Nutrients, Benefits, Side Effects, and More | Healthline

Share on PinterestLeigh Love/Stocksy United Yaupon tea is an herbal tea known for its medicinal properties. It boasts a unique flavor and rich nutrient profile, packing plenty of antioxidants and…
Coffee and Tea
May 25, 2021

How to make caramel iced coffee | The Morning Call

You can customize your caramel iced coffee when you make it at home. Choose the type of coffee, milk and flavoring to suit your fancy. You’ll also save money by…
Beverage trendsCoffee and Tea
May 21, 2021

4 tea trends you need to try on World Tea Day | IOL

It’s World Tea Day, so take a sip and enjoy your favourite brew. Picture: Pexels (Lisa) 4 tea trends you need to try on World Tea Day It’s World Tea…
Beverage trendsCoffee and TeaFlavour trends
May 14, 2021

New developments in tea flavours and natural ingredients for teas | FNB News

The rise in tea consumption across the globe has brought many new flavoured teas to the market. Some of the most noteworthy yet conventional flavoured teas like Jasmine Green, Masala…
Beverage trendsCoffee and TeaFlavour trends
May 12, 2021

Starbucks Canada New Strawberry Funnel Cake Frappuccino Honest Opinion | Narcity

Stephanie White | Narcity.com If summer had a flavour, it would be Starbucks Canada's Strawberry Funnel Cake Frappuccino. The new beverage is available from Tuesday, May 11, in locations across…
Beverage trendsCoffee and TeaFlavour trends
May 3, 2021

Edinburgh tea specialist develops blends flavoured with whisky | HeraldScotland

Esther Kungu-Cooper has created a range of new blends at the PekoTea Edinburgh business. Picture: Gordon Terris Name: Esther Kungu-Cooper. Age: 36. What is your business called? PekoeTea Edinburgh. What…
Beverage trendsCoffee and Tea
April 22, 2021

Five Tea Trends in 2021 – Perspective from a Tea Shop Owner | World Tea News

While these five trends by no means represent all that is going on in our tea industry, it is a good start to understand where our industry is headed. (Image…
Beverage trendsCoffee and TeaFlavour trends
April 20, 2021

REBEL Hard Coffee Launches New Hard Berry Crisp Latte for the Summer | Brewbound

Twelve5 Beverage Company has released its new seasonal collection of REBEL Hard Coffee for summertime sipping. REBEL Hard Coffee’s Hard Berry Crisp Latte showcases a refreshing blend of berries and…
Beverage trendsCoffee and Tea
April 20, 2021

Pandemic hasn’t tempered coffee’s popularity | QSR Web

Image courtesy of iStock. The coronavirus has resulted in more coffee being consumed at home, but convenience services operators need to offer the products people want to boost at-work consumption.…
Beverage trendsCoffee and TeaFlavour trends
April 16, 2021

Could low-cal, low-sugar hard teas become the new IT drink? Some say they’re ‘better than White Claw’ | USA Today

Loverboy Sparkling Hard Tea. LOVERBOY When you think about tea, you may think of kicking off your day with caffeine. You'd be less likely to think of a cocktail or…