When someone enjoys a hot cup of tea, and the warm feeling of steam reaches their face….or when they take that final swig of iced tea on a hot summer day and as the ice cubes slide into their mouth, all they are thinking about is enjoying the moment. Most have no idea of the hard work and the incredible complexity it takes for US consumers to enjoy the benefits of tea.
Introduction from the Author (s):
I have been fortunate enough to get an insider’s view to the fascinating world of tea. In my previous roles I have been responsible for supply planning and later logistics management at a renowned tea manufacturing operation.
I loved the challenges of working with tea tasters, sourcing teams, global suppliers and multiple manufacturing sites in order to procure, blend, package and deliver this healthy invigorating beverage to consumers stretching from coast to coast in North America.
I found it very pleasing on my daily walks throughout the operation to breathe in the aromas of the various teas that were being packaged that day. When giving tours of our operation visitors were fascinated at how well the teams managed the intricate production machines that could make millions of tea bags hour upon hour.
So, as I sit here and enjoy my own hot cup of tea I can truly appreciate the entire process and remember well some of the faces and names of those who made it happen.
The world of tea is truly amazing. Please find more details in this blog and our purchasable industry report on the US tea market.
Catching up with the Brits, Turks and Indians
While US tea demand has significantly lagged coffee demand in importance for decades, perhaps the Tea Party political movement of 2007/2008 was a sign that better things were brewing? Since that time, the US tea market has witnessed healthy value growth and garnered increasingly positive publicity with regards to the purported health benefits of tea and its much lower caloric profile in comparison to that of other popular beverages such as soft drinks and energy drinks.
Nevertheless, there is still much room for growth when one considers the fact that the average American consumes less than one pound of tea per year while the average Briton consumes over four pounds per year and the average Turk consumes seven pounds per year. In his recent visit to India, US president Barack Obama had a lengthy private meeting with that country’s new leader and ex-curbside tea (chai) vendor Narendra Modi. The leaders of the world’s second and third most populous nations discussed issues with global ramifications while consuming chai. In fact during the Indian elections of 2014, Mr. Modi’s campaign slogan had been “chai pe charcha”, meaning “discussions over tea.” Perhaps the debates and town hall meetings during the next US presidential election season will include “Oprah Chai pe charcha!?”
Can Starbucks repeat its coffee store success story with Teavana?
In a decade or two, Starbuck’s December 2012 acquisition of Teavana will perhaps be looked upon as the big breakthrough moment for the US tea market. It is unlikely that Starbucks can expand its Teavana stores (350 as of early 2015) as rapidly as it did its coffee stores over the past two decades, but even a fraction of that type of growth would be a major success story. Starbucks currently operates around 12,000 coffee stores in the US, an extraordinary achievement when one considers that the company only operated 400 stores twenty years ago.
Green tea and its health benefits
Over 80 percent of tea demand in the US is accounted by black tea, with most of the remainder accounted by green tea (white tea and oolong tea remain niche categories). However, US demand for green tea has been growing significantly faster than demand for black tea and will continue to do so in the coming years.
Green tea is considered to be healthier than black tea due to the former’s lower state of oxidation resulting in a high catechin (a type of antioxidant) content. In particular, the most abundant catechin in green tea, Epigallocatechin gallate (EGCG), is thought to be especially beneficial to human health. Besides providing possible protection to cancer and heart disease, EGCG is thought to boost metabolism and hence help with weight loss. None of these claims have been conclusively proven, but that has still not prevented a major EGCG supplement industry from taking root in the US.
Besides its health benefits, tea has always been enjoyed for its flavor. In the 2014 edition of its widely respected Flavor Forecast publication, McCormick (US) listed tea as one of the most important products to look out for, including in nontraditional applications such as broths and marinades1. In its traditional beverage category, tea demand will benefit from rising demand for newer products such as Chai, Kombucha and various specialty blends. Traditional market leaders such as Unilever, AriZona and Bigelow will need to adapt to this constantly changing environment.
So brew yourself a cup of tea, sit back and enjoy reading our informational report on the US tea market!
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About the Authors:
Bob Bredbenner is a senior consultant who has worked as a logistics manager at one of the world’s largest tea packaging facilities.
Prateek Parakh has been a consultant with a focus on logistics, manufacturing and innovation for one of the world’s largest tea companies.