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World Tea Expo 2016: Expanding the Role of Tea Outside the Home

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The World Tea Expo wrapped up in Las Vegas on Friday, June 17th. Euromonitor were in attendance, presenting on Global Trends in Foodservice Tea to a diverse and global audience of tea retailers, buyers and experts in the field of premium, specialty tea. Over 200 tea companies and thousands of associated industry professionals were on the show floor over the course of the week.

The learning sessions accompanying the show suggest an industry seeking new ways to promote education among tea consumers: to share the love of tea with existing enthusiasts of tea, but also to find new ways to engage with future tea drinkers. The effective use of dedicated blogs and social media channels to spread knowledge and love of specialty tea was a major topic of discussion. In addition, strategies to ensure the proliferation of tea sales outside the home – in specialty tea shops, tea cafés and on the menu in alternative channels – was another hot topic for many in the industry. How can tea be better showcased on a food menu and on the store shelf?

On the show floor, tea brewing devices proved to be an area of promising innovation. For specialty tea drinkers, the days of the soggy tea bag may be numbered. Canadian ESPRO, a manufacturer of French press style brewers for tea and Expo award winner for best brewing ‘gear’, joined small appliance/electronics giant Sharp, who were showcasing a new Tea-Ceré automated matcha brewing system. BKON Craft Brewer, a device designed to brew iced beverages from loose leaf teas, coffees and botanicals also maintained a booth for product demonstration, alongside Teforia – a super-premium North American tea brewer designed for operation with the user’s smartphone. Using Teforia, the consumer can download appropriate brew settings (blend appropriate temperature, steep time etc.) for each unique style of tea. The product is set to launch in the US later this year.

Reaching the premium consumer but growing the wider tea category too

With high value pu’her, chai and oolong tastings from global importers of aged tea as well as new unusual blends, the value potential of tea was clearly apparent throughout the show. Some rare blends can reach hundreds of dollars an ounce at retail. As such, the most fitting parallel for the tea category may that of wine: a self-styled connoisseur consumer eager to experiment with unfamiliar flavours and prizing their own ability to appreciate the complexity of the product. At the high end of both categories, the experience of shopping, collecting and learning can be as powerful of a revenue driver as actual consumption. Expo sessions demonstrated that the high end tea consumer in North America and Asia still has a great and growing appetite for premium brands and luxury experiences with tea. Kathy YL Chan, an independent tea consultant, discussed the many ways in which premium teas are being creatively integrated into the menus of luxury hotels and five-star restaurants around the globe.

But mass market, affordable tea cannot be ignored. In markets where consumers are seeking healthier, affordable and natural alternatives to highly processed beverages, there should be a sustained effort to introduce tea to new consumers and better integrate tea into the daily ritual.

New distribution channels may be a part of the plan to grow volume sales. Teabook, a Washington based startup, aim to bring a subscription based model to the sale of loose leaf tea, allowing tea drinkers to have their product delivered to the home on a monthly basis (in addition to specialty brewing equipment). This is not the only e-commerce venture attempting to improve tea retail. Teabox, an Indian based start-up, have a business model built around shipping unbranded tea direct from the manufacturing source to the consumer (thereby reducing the amount of time spent in transit and on the shelf, preserving all-important freshness).

Driving both value and volume – democratising consumption of tea – is the best path forward. Looking across the state of soft drinks and other categories of global beverages, it is clear that hot and cold tea can be a real asset to all classes of foodservice operator and that tea products belong in more locations. This is because the unique versatility of tea allows it to satisfy consumer demand for natural, healthy and flavourful beverage options. There is hardly any menu or occasion outside the home where tea can’t play a role.

The World Tea Expo reinforced the unique advantages that tea retains when it comes to flavour and in terms of commanding a hefty price premium. Consumer food and beverage habits are changing quickly. As consumers seek healthier lifestyles, more natural products, more functional benefits and more flavour options, the unique versatility and inherent health benefits of tea are likely to make it one of the main categories that benefit the most from changing consumer preferences.

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