By Greg Gonzales
Tea markets are growing, and growth won’t be slowing down any time soon, thanks to a multi-generational boost. The U.S. tea market has grown 15 times its size since 2009 and was worth $10.8 billion in 2014, according to the Tea Association of the USA’s “2014 State of the Industry” report. Loose-leaf tea in particular has gained popularity as a specialty product, hydration alternative and health product, while ready-to-drink tea has seen similar success on supermarket shelves. The report also said that tea is the second-most consumed beverage in the world, after water.
The same Tea Association of the USA report, compiled by Tea Association President Peter Goggi, cited Millennials as the major demographic driving market growth. “Several aspects of the market are driving Millennial interest in tea,” Goggi said. “The access to tea has been easier and much more common for them; they’ve grown up drinking tea, as preteens, and they also gravitate toward products that appeal to them. Tea fits in because Millennials want to be engaged with the products they buy — where it comes from, how it’s made, its naturalness — tea fits into this beautifully because it comes from different countries and it’s an agricultural product, so Millennials can get involved.”
He added that Baby Boomers have gotten involved in the conversation, too, and are increasingly joining the public discourse with Millennials.
Topics to share include the teas’ origins, and how different processing yields different kinds of tea. Pu-erh tea, for example, is aged and pressed into cakes, making an extremely dark brew that exclusively contains the cholesterol-lowering compound, lovastatin. Specialty teas use the best leaves, while low-grade teas consist of fannings, or what amounts to dust left over from processing high-grade leaves. Farms throughout the world employ their own growing techniques, which also yields a different product. Enthusiasts can learn nearly everything about the origins of a specialty tea, and share their preferences through endless social networks, online and offline.
Entrepreneurs and tea chains across the globe are taking notice of this trend. While large tea exporters like Zhejiang Tea Group have expanded more into U.S. markets, small tea businesses in North America are beginning to flourish as they adapt to the growth. “With everyone on social media to distribute content for social reward, tea is the budding connoisseur’s dream,” said Stuart Lown, National Sales Manager of Takeya USA. “There’s so much to learn about tea, fresh fruit and herbs — so much to learn about healthy hydration, to share with friends and family.”
Takeya specializes in tea infusers and pitchers that simplify home brewing and improve the flavor of the tea. One of their products, the fruit infuser, allows consumers to add new flavors outside the tea itself. By providing an easy method for making homemade iced tea, Lown said, Takeya makes quality tea more accessible to the everyday consumer.
“We specialize in bringing loose-leaf tea home, allowing consumers to quickly and easily brew premium teas and to chill those quickly, which allows people to get the health benefits from the tea,” said Lown. “When you brew the tea with a Takeya system, which is an airtight chamber, you’re getting the best taste and nutrient content.”
The airtight Takeya system ensures precious nutrients and flavors don’t evaporate with some of the water before the tea cools — and those nutrients are key to tea’s growth. “Over the last decade, several thousand articles have been written about the healthfulness and important phytochemicals and antioxidants that improve human health,” Goggi said, adding that the public has grown increasingly aware of these studies.
Cleansing, lower cholesterol, heart function and mental acuity are some of the natural benefits of tea drinking. Flavonoids, a compound produced by tea plants, are thought to have antioxidant properties and help neutralize free radicals. Tea also has no sodium, no fat, no carbonation and is sugar-free. It’s also calorie-free and provides hydration — and some studies have shown that tea drinking improves cardiovascular health. A Harvard study found that individuals drinking one or more cups of black tea per day have a 44 percent reduced risk for heart attack. A U.S. Department of Agriculture study showed that a low-fat diet combined with five cups of tea per day reduced LDL cholesterol by 11 percent, after three weeks. Also shown in the studies is that drinking black tea reduces blood pressure and helps blood flow after a high-fat meal, and tea also carries with it a reduced risk for rectal cancer, colon cancer and skin cancer.
Along with health benefits, tea naturally boosts cognition. While antioxidants in tea protect brain cells from free radicals, another compound found in tea, L-theanine, along with caffeine, is known to enhance attention and complex problem solving.
Still, not all tea drinkers are seeking a mental boost, and not all of them are interested in learning about tea beyond the basics. “Seventy-eight percent of consumers drink tea for the taste, and 50 percent drink it for the function,” said Patrick Tannous, President and Co-Founder of Tiesta Tea. “We take the basic functionality of the tea and educate the consumer. We aim to make tea accessible, understandable and affordable.”
Tiesta Tea’s approach is to educate the consumer about how to make the best tea, rather than about the tea’s journey from the farm to cup. On the company website, the owners drive this point home: “Does it really matter to you which farm in China produces the best green tea in February or how to correctly pronounce rooibos? (it’s ROY-bos, if you care.) That’s our job to do, not yours. We believe what matters is what your tea tastes like and what’s it’s going to do for you. We take care of the nitty-gritty details.”
Ready-to-drink tea also has made tea more available and visible to consumers. Some markets dedicate an entire shelf section to kombucha alone, increasing tea’s visibility, while other varieties of tea can be found all over stores, rather than in one single beverage area. Goggi wrote in his 2014 report that ready-to-drink tea is expected to continue rising in popularity, with annual dollar increases from 12 to 15 percent.
There are a lot of factors driving tea growth, from public knowledge of specialty tea to Starbucks buying the Teavana chain. As Millennials age, their interest in tea is expected to continue and get passed down to the next generation. This growth will keep the market growing for years to come. After all, tea is inexpensive, simple and accessible.
“It’s something anyone can do, and it’s something all people can enjoy,” said Lown. “Tea is not exclusive to a certain class; it’s something everyone can enjoy, no matter your diet, your religion, your age or your income.”
For the first time in the history of coffee, there’s a packaging that will preserve the cold-brewed beverage without refrigeration. Coffee concentrate packaged in a bag-on-valve system is shelf-stable for three years or more and comes out of the can with the same taste and aroma it had when it was freshly brewed, according to BOV Solutions Founder and CEO Paul Hertensen.
“The packaging is specifically designed for today’s cold coffee drinks,” he said. “It looks like an aerosol can, but it’s not aerosol. This is a pure, natural coffee product with nothing added. There are no preservatives. No refrigeration is required.”
BOV Solutions has partnered with the world’s largest coffee-brewing company, which is making the coffee concentrates that are packaged inside the BOV Solutions’ bag-on-valve cans. The coffee concentrate itself is enclosed inside a bag so that it’s in an oxygen-free environment and is never touched by propellants. Then the can is pressurized outside the bag, and that pressure provides the force that propels the coffee concentrate out of the can when the valve is opened. The can is made from 100 percent fully recyclable aluminum, so there’s no landfill impact, and shelf-stability tests have shown no change in the coffee after three years without refrigeration. “The flavor is still there; the aromas, still there. It’s exactly the way it was when it was put into the can,” Hertensen said.
Flavor stays the same because the sealed bag protects the coffee from the oxidation that changes the flavor of coffee as it sits in an open container. “Our coffee tastes the same from the first cup to the last cup with no changes whatsoever,” Hertensen said.
All the consumer has to do to prepare the beverage is to dispense a quarter of an ounce of the coffee concentrate into hot or cold water. “You absolutely need no equipment whatsoever. All you need is hot water or cold water or milk, whatever you use to make your coffee drink,” Hertensen said. The coffee concentrate can also be used as a flavoring ingredient for foods like ice creams or baked goods. “It has no bitterness,” Hertensen added. “All the bitterness has been removed.”
The same technology can also be used to package tea concentrates. At-home preparation for those also requires just the dispensing of a quarter of an ounce of the concentrate into a glass of ice water or a cup of hot water. “Tea is also a cold-brewed process,” Hertensen said. “We get the pure flavor of the tea.”
The technology has patents pending around the world, Hertensen says. “What we actually patented was the ability to put a coffee or tea concentrate into a bag on valve. We also patented putting the bag-on-valve into a dispensing system.”
“This is the most exciting product I’ve ever had my fingers on by far,” he added. “People are dying for us to get it onto the market.”
BOV Solutions’ profits from sales of the coffee and tea packaging will be donated to a new veteran’s organization that’s providing an outdoor recreational retreat area for disabled veterans and first responders. “It’s a good cause. There are organizations helping these veterans get mobile, but there’s no place they can go to enjoy outdoor sports that has equipment modified for them,” Hertensen said. “It’ll be totally free of charge to the veterans. This is drastically needed for those who serve and protect us and have been disabled doing so. It’s a marvelous thing because it will help them feel whole again.”
The recreational facility will also be available to firefighters, police officers and other first responders who have become disabled through the performance of their duty as public servants, Hertensen said. “It’s a great organization.”
Affinity Beverage Group, Inc., a publicly traded company, announced that it has acquired a majority interest in Village Tea Company Distribution, Inc. Village Tea, headquartered in National Harbor, Maryland, is the owner of the Village Tea Company brand of premium loose leaf teas and tea accessories. Village Tea Company sources high-quality, unique teas that are blended to create distinct flavor combinations which are packaged in a variety of creative and earth-friendly ways for wholesale and retail sales. The brand has been sold in several major retailers in North America including Vitamin Shoppe®, Whole Foods® Markets, Winners®, HomeSense®, Akins/Chamberlin® Natural Foods Markets and many other independent specialty and grocery store retailers. Village Tea Company products are also available through e-commerce retailers such as Amazon, the company’s own website, www.villageteaco.com and other online retailers. Village Tea Company also recently acquired distribution rights for Pura Organic Agave sweeteners, which will be available at select U.S. retailers in the coming weeks.
Affinity CEO Janon Costley will remain in his role as CEO of Village Tea Company Distribution, Inc., while Affinity advisory board member and Village Tea Company founder, Martin Ekechukwu will continue in his role as Brand Manager and President. “Acquiring Village Tea Company was at the forefront of our thought process when we decided to build a health and wellness lifestyle brand building and acquisition platform with Affinity Beverage Group. We have learned some important lessons over the past couple of years while trying to find the proper platform to grow Village Tea Company, so it was extremely important to us that we put the company into the best situation that would allow us to have full control of our strategic growth strategy that will enable us to maximize the tremendous potential of the brand and its distribution platform. We feel that Village Tea Company is poised for exponential growth over the course of the next several years, and Affinity gives us the best opportunity to fulfill those expectations,” Costley said.
With the increased emphasis on health and wellness in the U.S. tea market, the $6 billion global tea industry has seen exponential growth over the past five years with the ever-increasing popularity of gourmet and boutique tea brands and retail outlets accounting for nearly 35 percent of the global tea market, the Village Tea Company is properly positioned for exponential growth over the course of the next several years. Over the past year, Village Tea Company has created a platform that will enable it to increase its sales footprint in existing channels of distribution in health and wellness specialty and grocery stores and e-commerce but also to increase its presence in mainstream grocery, clubs, mass and drug store chains as well as into hospitality, food service and restaurants.
Village Tea Company is no longer just about tea, as it is also using its unique positioning in the marketplace to create a distribution platform to introduce other complementary health and wellness lifestyle brands and products. As it looks toward the future, the company will continue to seek opportunities to leverage its product development team and distribution experience as well as the resources of its trade partners to explore various brand extension opportunities into new categories such as tea accessories, K-cups, various tea based products, retail, co-branded tea infused nutritional beverages and strategic distribution opportunities.