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RTD Tea in the US

United States RTD tea market: Ferolito, Vultaggio & Sons the key player with 26% share in 2012

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2014-02-10 18:56:01 - RTD Tea in the US - a new market research report on

Ferolito, Vultaggio & Sons, maker of the Arizona RTD teas, is the leader in United States RTD teas market, with an off-trade value share of 26% in 2012, down from 27% in 2011. The company has been able to maintain its lead in this category through product innovation and low prices. New products are introduced frequently to create excitement among consumers.

Ferolito, Vultaggio & Sons benefited from the growth and innovation around its signature Arizona Arnold Palmer brand. In addition to the regular version, both the new reduced-calorie (Arnold Palmer Lite Half & Half with Splenda – a no-calorie sweetener) and green tea versions of the half-lemonade, half-iced tea blend have done well in the market. The majority of its RTD



teas are sold for US$0.99, making it one of the cheapest single-serve soft drinks options in the beverage aisle.

Health-oriented consumers are choosing RTD tea over other soft drinks, such as cola carbonates, due to its natural health properties, like antioxidants. Many Americans view RTD tea as better-for-you and lower in calories than other alternatives, even if most RTD tea consumption is of the sweetened variety. Manufacturers have increased the appeal of RTD tea by going beyond traditional black tea to include lemonade and juice blends. RTD teas also benefit from their refreshing qualities, as the light texture allows consumers to drink much more RTD tea than they could of the thicker drinks such as juices and RTD coffees.

RTD tea is expected to see continued growth over the forecast period, increasing by 22% in constant off-trade value terms and by 10% in total volume terms. This growth parallels the increase in health awareness among consumers in the US. As such, they are looking for alternatives to high-calorie carbonates and RTD teas offer a unique refreshment beverage with lots of natural health benefits but very few calories. Although RTD tea is becoming increasingly saturated, new flavours and varieties continue to be introduced.

The primary source of growth in the category will be antioxidant-rich green, white and red teas combined with fruit flavours to maintain the natural positioning. Additionally, the recent introduction of kombucha teas to the market shelves will help push the category´s growth. Kombucha´s touted health benefits, not to mention the beverage itself, are still relatively unknown to mainstream consumers. Also, the success of sparkling RTD teas may help the category grow by cutting into carbonates´ share. In April 2009, Lipton launched its first ever sparkling iced tea in the US, and further extended this line by launching a diet version of its sparkling green tea. This allowed consumers to have their "bubbles", but in an iced tea form, as well as with reduced calories.

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Mike King
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