Despite volumes currently limited to Asia, Central Europe and North America, RTD tea can appeal to consumers with an affinity for tea as well as those simply seeking an alternative to carbonates and juices. The beverage’s versatility makes it a blank canvas for manufacturers to create a variety of products that can be sold to nearly any consumer.
RTD tea is one of the fastest growing beverage categories in the world, but greatly trails bottled water, carbonates and juice in terms of total volume and value. As consumers move away from carbonates and juices, however, potential to grow the category in both established and new markets is high.
The consumption of RTD tea is essentially limited to three key regions: Asia Pacific, Western Europe and North America. Asia Pacific dominates with over 77% of total RTD volume in 2013. A traditional preference for tea in growing markets such as China and Vietnam have paved the way for this success. Western Europe volumes mainly come from private label brands, whereas consumption in North America is tied to consumers seeking new beverages.
By examining Asia, Central Europe and North America, it is clear that RTD tea can be many different things to different consumers. The beverage can be sweetened to give the indulgent flavour of carbonates, unsweetened and natural to taste more like traditional tea, or even mixed with juice to give familiar flavours. This versatility will help the category grow in years to come.
The varying positions of RTD tea also create potential for multiple brands and sub-brands. Products such as Arizona Iced Tea has many different flavours. Similarly, Coca-Cola has found success using over a dozen brands in different markets.
The versatility of RTD tea also makes it an ideal beverage for foodservice operators seeking to create their own unique beverages. This in turn can inspire retail versions of popular on-trade drinks, growing both channels concurrently.
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