While coffee remains king in the United States, recent activity shows that iced teas may finally be … More
Tea parties have a long tradition in the United States, going back well before the American Revolution. Colonists enthusiastically tossed crates of tea into Boston Harbor to protest taxation on tea. The Boston Tea Party became a key moment in American history, leading up to the American Revolution.
These days, iced tea is in the middle of its own revolution, as companies tweak recipes, add flavors, modify sweeteners, invest in launches, take to social media, and tout its health qualities.
Soon after National Iced Tea Day on June 10, in case you missed it on your calendar, might be a good time to look at tea trends in what could easily be seen as a coffee country. Yes, coffee is an enormous F&B category, but iced tea (especially on a hot summer day) may be experiencing its time as well, judging by some recent activity.
“It’s prime for the next modern revolution. I’ve been in the beverage biz my whole career,” Ryl Tea CEO Blodin Ukella said, pointing to enhanced water and protein shakes as categories that took off. “Tea is a legacy category. It’s seen innovation, but hasn’t seen impactful innovation.”
That is changing, as natural sugar substitutes give the good — without the bad. Ryl Tea, for instance, is part of this transformation of tea “with benefits,” such as antioxidants, as well as flavors like peaches and cream, watermelon, rocket pop, half tea and half lemonade, lemon, raspberry and green tea. In addition to unsweetened versions, Ryl Tea, offers tea sweetened with monk fruit, Stevia, and allulose.
“Zero sugar. No artificial ingredients in the sweetener or flavor. And it tastes like a full sugar, full bodied product,” Ukella said of a naturally sweetened product with “clean ingredients and robust taste.” “We figured out how to take the functional benefits you’d get from a steeped tea, that you would make home, and retain those in the [ready to drink]
format.”
Launched and led by Ukella, an immigrant who came to the U.S. in 1999 from Kosovo , Ryl Tea seeks to position itself as healthy with taste. Modern energy drinks today have exploded in popularity (think Celsius). Ukella believes, and some evidence backs the idea, that tea’s time has finally come too.
“Tea is an everyday item. The peak season is absolutely the summertime, when people look to quench their thirst,” he said. “We don’t see the same downward dips you might in other categories.”
Party Time For Ice Tea
While Ryl (which is an acronym for “Rethink Your Liquid”) Tea is making real progress, it’s part of a bigger tea boom. North America is the second largest region for iced tea sales over the past year, growing by 5% in value and 3% in volume over the past five years, according to Innova Market Insights.
About 23% of consumers increased their iced tea consumption, boosted by variety and novelty that, “balances refreshment with natural ingredients and functional benefits,” Innova said.
“It’s evident that iced tea is evolving from a seasonal refreshment to a year-round staple,” states Market.us News.
Touting new flavors, natural ingredients, and functional benefits, iced tea is on track to become a … More
Nearly half — or 43.6% of the global iced tea market or $4.7 billion in 2024 — was in North America, according to Market.us News, saying sales are boosted by tea’s “refreshing taste and flavor versatility” and “rising demand for refreshing, low-calorie drinks.”
“Health-conscious consumers in North America favor low-sugar, organic, and naturally flavored iced teas, fueling demand for healthier options,” preferring teas to “sugary sodas,” according to Market.us News.
“The Iced Tea Market is experiencing significant growth…” they continue, “driven by health-conscious consumers seeking refreshing, low-sugar beverages.”
About 23% of iced tea consumers prefer low-to-no-or reduced sugar, and 26% of iced tea launched in the past year featured sugar-related claims, according to Innova. Lemon, peach, ginger, lemonade, and hibiscus are the top five flavors, Innova added.
Shaking Up The Space
Limited Time Offers (LTOs) are part of this tea time transformation. Ryl Tea, for instance, launched its rocket pop limited offering, but others are also shaking up the sector with temporary launches. In May, Coca-Cola announced a new LTO release called Sprite + Tea through October. A mix of Sprite with the “classically refreshing flavor of tea,” it’s available in regular and zero-sugar.
This “category-crossing” mix, combining soda and tea, follows a TikTok trend with millions of views of a post combining Sprite with tea bags, leading the company to create an official product mixing the two.
With more variety than ever on our shelves, tea companies are shaking up the status quo by … More
“We’re always listening to our consumers, but this particular phenomenon motivated us to explore how we could offer our own refreshing take on tea,” said Kate Schaufelberger, Brand Director, Sprite North America.
Coca‑Cola said its North America R&D team did consumer testing to “fine-tune the formula” and create “a smooth and refreshing balance of the complementary flavors.”
“You never go wrong when you listen to consumers and tap into what they’re doing by becoming part of their everyday,” said A.P. Chaney, Coca-Cola’s Senior Creative Director for Sparkling Flavors in North America.
Sprite touts the blend as its “Refreshing Take on Tea,” pushing back against any idea that tea is old-fashioned, by calling it “not your granny’s tea.”
“We’ll always continue to push ourselves to do what’s right for our consumers and the business with innovations like Sprite + Tea,” Chaney said.
Tea Take Two
Some players are getting back into the category, believing this truly is iced tea’s time. While Coca-Cola stopped producing Honest Tea, an organic, low-sugar brand, three years ago, Honest Tea co-founder Seth Goldman is back with Just Ice Tea (a pun on only iced tea and justice.)
“It recently became the ninth best-selling, ready-to-drink tea in the U.S. grocery channel, leapfrogging Coca-Cola’s Peace Tea,” Food Dive noted regarding Just Ice Tea, citing NIQ data.
In 2022, Goldman started Just Ice Tea with celebrity chef Spike Mendelsohn and Yale professor and Honest Tea co-founder Barry Nalebuff four months after Coca-Cola said it would drop Honest Tea.
These days, you’ll see many tea products that are low-sugar, organic, and with sustainability in … More
Just Ice Tea sales totaled $16 million in 2023, its first full year, according to Food Dive, which said the company recently added distribution in Target, as well as some Walmart and CVS stores, doubling stores to 12,000.
“I obviously would have never wished for Honest Tea to have been discontinued, but now that it has, we’ve been presented with an amazing business opportunity,” Food Dive quoted Goldman.
Touting its organic, low-sugar, Fair Trade, and sustainability traits, Just Ice Tea offers flavors like honey green and peach oolong, orange mango herbal fusion, and berry hibiscus herbal.
Hard Tea Crosses Generations
In addition to blending tea with soft drinks, tea makers are also blending teas with alcohol. Lipton’s new Hard Iced Tea seeks to appeal to baby boomers and millennials. Iced tea, after all, already provides a “versatile base for mocktails and cocktails” and “a favored base for creative drinks,” according to Market.us news.
Brewed by FIFCO USA under a licensing agreement with PepsiCo, according to Marketing Dive, Lipton’s Hard Iced Tea, like so many others, seeks to cross categories. Lipton’s marketing “campaign puts a heavy emphasis on content designed to appeal across age groups,” according to Marketing Dive, which added that “Lipton Hard Iced Tea is attempting to bridge the generational divide between Baby Boomers and Millennials.”
Lipton is seeking to reach consumers of all ages, even partnering with the Retirement House, senior influencers who reportedly have 6.4 million TikTok followers. They’re tapping social media in other ways, too, holding an Instagram contest to win a trip to Palm Springs, California.
Japan’s Take On Tea
Meanwhile, Japanese tea brand Ito En, which expanded into the United States in 2001, has been seeking to appeal to Asian Americans through a tie-in with Major League Baseball star Shohei Ohtani.
The company, whose flagship is Oi Ocha, launched a less bitter version as it seeks to win over the U.S. market with an unsweetened brew.
Nearly half of Japan’s green tea exports went to the United States last year.
Founded in the 1960s, Ito En has swallowed up much of Japan’s tea market, accounting for around a quarter of the country’s total tea production, according to Thomson Reuters.
Japan’s green tea exports grew by 24.6% to 36.4 billion yen or $251 million last year, with nearly half to the United States, reports Thomson Reuters.
Ito En claims to have around 2% of the U.S. market for tea beverages, reports Thomson Reuters, ranking eighth largest, with Unilever’s Pure Leaf brand leading the sector.
Skewing Younger
Some iced teas, such as Ryl Tea, are targeting a younger demographic. Ukella said energy drinks such as Alani Nu are bringing in the next generation of consumers, as Poppi did before selling to PepsiCo.
“We like to think, when you look deeper in the category, we’re adding something new to a legacy set,” Ukella said. “Tea is not approachable if you’re a Gen Z, Millennial consumer. You have legacy dominant sugar players.”
Ryl Tea has grown to about 40,000 accounts including Walmart, Kroger, Albertsons, Wegmans, Stop & Shop, CVS, Walgreens, and many more.
“When you think why Poppi had the success it did, it brought in a new consumer to the set of soda,” Ukella continued, speaking on Gen Z and Millennials.
Ryl Tea, Ukella said, has the fastest growing social media following in tea, in two years building an Instagram following of 84,000 and111,000 TikTok followers.
“The unique thing isn’t just the followers, but the impressions and engagement,” he said, noting over 1.5 billion impressions in two years. “The vision is to treat us as a Next Gen consumer beverage platform. Our goal is to drive growth in the tea space and build a brand of authenticity. Potentially, we can launch new sub-categories.”
