Tea Sales Remain Solid While Packaged Juice Falters

iced teaWhile innovation is a valued component to every category, the juices and teas segment of packaged beverages seems to be particularly prone to new twists and creative concepts.

Largely in response to consumers looking for more functionality and added value in their libations, drink manufacturers have been rolling out juices and teas infused with vitamins, antioxidants, sedatives and other health benefits.

Convenience store coolers are bursting at the seams with new soft drinks, bottled waters, teas, juices, energy drinks and other packaged beverages, so it falls on retailers to educate themselves about new products.

While the “good-for-you” movement is having a positive affect on virtually every beverage category, juice sales have been sluggish. According to Information Resources Inc. (IRI), c-store juice sales dropped 1.6% for the 52 weeks ended Jan. 20, 2014. Unit volume also fell, down 1.7% for the same period. While the numbers don’t seem alarming, it could be seen as a precipitous decline considering the strong growth of other healthy beverage categories.Perhaps one key reason for the public’s recent disfavor with juices is the growing awareness that fruit juices, albeit natural, are high in sugar.

The entire juice category isn’t going down the tubes, however. High-end products, such as flavored and enhanced juices—formerly known as “new age beverages” are holding steady.

“Products like Naked Juice and Odwalla are doing well for us,” said Butch Fulton, merchandise manager at Beaverton, Ore-based Plaid Pantries Inc. “They’re all-natural and sell for about $3.50 for a 13- or 15-ounce bottle. That’s a real good ring.” According to Fulton, the high-margin, high-end fruit beverages do so well because consumers look at them as a meal replacement, and are more willing to part with their hard-earned dollars than for standard juices.“People will pick up a high-end juice, add a bowl of fruit, and that will be their lunch,” he said “But regular orange juice or apple juice in the cooler, those are very flat.”

Tea Time
Unlike juices, ready-to-drink teas are doing well. According to Nielsen c-store data, tea has grown in the convenience channel by a healthy 9.1% over the past two years. That is in line with the numbers at Plaid Pantry stores. “Teas are growing and are up for us about 8% in the past 12 months,” Fulton said. The key to maintaining relevance is always change.“They keep coming out with new flavors, line extensions and new packaging,” Fulton said. “That helps us keep the offering fresh so customers come to identify our stores with the new products they want.” ◆

Ready-to-Drink Teas Making a Comeback
Juice sales may be flat, but sales of bottled and canned tea have been a bright spot in the cold vault. Fuze stood apart from the pack in 2013, according to IRI, experiencing a whopping 250% sales growth in convenience stores. Lipton Pureleaf and Gold Peak also enjoyed solid sales growth.

 

Dollar Sales 

 

Sales % Change

 

Unit Sales

 

Unit Sales % Change

 

Avg. Unit Price

 

Total Canned And
Bottled Teas

 

Arizona

 

Lipton Brisk

 

Lipton Pureleaf

 

Gold Peak

 

Arizona Arnold  Palmer

 

Snapple

 

Peace Tea

 

Lipton

 

Diet Snapple

 

Fuze

 

 Source: Information Resources Inc. (IRI), Total U.S. Convenience AllScan, 52 Weeks Ended Dec.29, 2013

 

 

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