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Iced Tea Market Heats Up on Health Platforms

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Iced Tea Market Heats Up on Health Platforms

Iced Tea Market Heats Up on Health Platforms
March 13
10:37 2015

Despite rising levels of interest in recent years, ready-to-drink (RTD) or iced teas still accounted for a relatively modest 7.5% share of global soft drinks launches recorded by Innova Market Insights in 2014. Developments included the launch of more sophisticated products in relatively established markets, such as the US, and the move to more mainstream initiatives in very underdeveloped markets, such as the UK.

According to Lu Ann Williams, Director of Innovation at Innova Market Insights, growth can largely be attributed to the consumer search for alternatives to sugar-rich carbonated beverages alongside an increasing emphasis on the health properties of tea. “Over 62% of global iced tea launches made at least one health claim of some kind, rising to over 88% in the US,” she reports. “Tea’s use as an added flavor or functional ingredient has also become increasingly common in other soft drinks, such as fruit drinks and enhanced waters, raising awareness and drawing new consumers into the market.”

The US canned and bottled tea market is well-established and is led by well-known brands such as AriZona, Lipton and Snapple. Ambient lines are now increasingly competing with refrigerated or chilled tea drinks, however, and the leading brands have had to focus on maintaining interest via new product activity and promotional activity. Market leader AriZona, for example, launched a novel range of Oak Brewed Teas in 2014, made with black tea aged in American oak barrels.

InnovaMarketInsightsLogoIn Europe, companies have long struggled to get ready-to-drink teas into the UK market. Consumers traditionally brew their own tea and drink it hot and interest in recent years has focused more on rising consumption of green tea. The focus on taste and health refreshment does now appear to be having slightly more success among younger consumers, however, and levels of new product activity have been rising.

In Continental Europe, iced tea is slightly more established as a drink, mainly in canned format, although the use of bottles is rising and the market has seen the arrival of a number of chilled milk-based tea lines in lidded cups as the iced coffee market has developed in that format.

Interest in the German iced tea market was also reflected in the launch of flavored water drinks featuring tea from Lichtenauer under the Fresh’n FruiTEA name, fruit drinks featuring white tea from the Hohes C fruit drink brand, and the test-marketing of Italy’s leading bottled iced tea product, Estathé from Ferrero, in selected test regions.

Elsewhere on the market, there is also a focus on calorie reduction, featuring low-calorie and reduced-sugar launches. Stevia sweeteners have been used for a number of products, including Little Miracles’ Rooibos Tea, Elderflower, Ginger, Ginseng, Agave drink and Virtue Ice Tea drinks. Alternative products featuring Rooibos, Matcha and Kombucha are also increasingly in evidence, while a number of bubble tea drinks featuring green teas and fruit teas were also introduced.

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