Millennials and younger consumers tend to seek out a variety of ready-to-drink tea and juice flavors, according to Los Angeles-based market research firm IBISWorld. Also, tropical flavors like mango and pineapple have been on the rise, as consumers look for exotic and creative healthy alternatives.
In its December beverage report, IBISWorld projected overall juice revenue to expand at an annualized rate of 1.2% to $13.4 billion in the next five years. Comparably, tea revenue is projected to grow at an annualized rate of 1.6% totaling $1.4 billion.
Aside from different flavors, U.S. consumers are seeking better-for-you beverage offerings, which are helping drive packaged beverage category sales in c-stores.
Although it is one of the largest non-alcoholic beverage markets, the juice category has stalled at $20 billion in overall sales, according to the Mintel Group.
It also suffers from an unhealthy perception from consumers.
Juice sales in c-stores for the 52 weeks ending Dec. 25, 2016 totaled $620 million, a 0.5% increase from the prior year, according to Information Resources Inc. (IRI) Total U.S. Convenience Store All Scan data.
“C-stores are alert to the fact of alternatives and healthier products within juices and teas, which is in line with consumers,” said Tom Pirko, managing director of Santa Barbara, Calif.-based BevMark LLC, a beverage consulting firm. “Health and wellness is driving the business.”
Still, 77% of adults in the U.S. drink juice, with 100% juice leading with 66% consumption, followed by 36% for juice drinks, as reported in Mintel’s October “Juice and Juice Drinks–U.S.”
“The convenience segment needs to stock juice and tea products that are distinctively different, but also straightforward and simple, so consumers don’t have to think too much about their purchase,” said Pirko.
Refrigerated tea sales in c-stores totaled $172 million in the 52 weeks ending Dec. 25, 2016, while ready-to-drink sales were more than $1.4 billion, according to IRI. This highlights the big discrepancy between the packaging types and consumer preferences, though sales in both categories were essentially flat.
PRIDE Stores, a 12-store chain based in St. Charles, Ill., is seeing interest in juice and teas with healthful ingredients.“There are a lot of new teas and an increased focus on packaging, such as with Snapple and Golden Peak lines, which has drastically improved in this beverage category,” said Mario Spina, PRIDE Stores’ CEO.