Tea label claims a mixed bag

Articles
November 20, 2009

Tea label claims a mixed bag

When the going gets tough, the tough drink tea.

When the going gets tough, the tough drink tea.

So many movie scenes where adult characters consider complex matters over a calming cup of tea are being mirrored in real-life households across America. It's completely understandable: moms and dads have plenty on their minds these days, and they appreciate the soothing steam, the fragrant aroma, and the therapeutic effects of many different kinds of teas on the market today.

We believe emotions and stress are playing a role in tea's ability to usurp coffee's historic position in U.S. household penetration. Precisely three out of four U.S. households (75.0%) purchased from the total tea category during the 52 weeks ended June 27, 2009, compared with 71.8% who bought coffee (prepackaged, UPC-coded products only), Nielsen consumer panel data show.

More than eight out of 10 were repeat buyers during this period, in which both beverages shared highly similar profiles: about seven purchase occasions during the course of the year, bought on deal about a quarter of the time, and with coupons less than six percent of the time. Coffee being more expensive, however, the annual value of these purchases was $50.01 compared with tea's $29.76, reported Nielsen.

Retailers have benefited from the merits of tea in good times and bad. The total tea category is on at least a four-year growth streak—surpassing the $2.5 billion sales level in U.S. food, drug and mass merchandiser stores (excluding Walmart) in the 52 weeks ended September 5, 2009, on the strength of successive annual gains of 11.3%, 15.0%, 2.2% and finally 1.5%, according to Nielsen LabelTrends data.

Liquid tea is the largest component with the most successful growth profile over the past four years. The segment has surpassed the $1.5 billion sales level, on consecutive annual advances in dollar sales of 25.0%, 27.1%, 3.4% and most recently 1.5%.

Most tea segments bearing claims were winners, although two declined in the latest 52 weeks: Dollar sales of natural teas slid by 2.1% to $613.8 million. And low-salt/sodium or no-salt/sodium teas dropped by 8.5% to $571.7 million, stated Nielsen.

The dollar-sales gainers included:

  • Teas with antioxidant claims. This year's 5.3% rise extends a growth streak of 85.1%, 66.9% and 9.5% in the three prior years. The latest tally: $609.0 million. Notably, equivalized unit volume gains (16-ounce basis), which paralleled the dollar rise, were 64.8%, 41.6%, 7.5% and 7.7%.
  • Teas with caffeine-free or reduced-caffeine claims. Dollar sales reached $434.6 million, up from $393.3 million four years earlier, led by consecutive annual advances of 1.7%, 4.6%, 1.8% and 2.0%.
  • Teas with organic claims. The smallest claim segment has more than doubled in size in four years to $75.4 million, on the strength of annual dollar sales rises of 20.7%, 25.7%, 26.4%, and most recently 8.8%. EUV gains were pretty consistent, at 15.6%, 26.6%, 28.1% and 7.3% over this time period.
  • Teas with no preservatives added or preservative-free claims. Four straight growth years lifted this segment to $269.8 million from $192.6 million at the start of the period. The annual gains were 16.9%, 12.6%, 3.9% and 2.4%.?? 

Since tea items may bear more than one claim, the segments are not additive and do not equal the total tea figure, explained Nielsen.