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Keeping Pace with the Changing US Tea Market

Photo courtesy of Shearwater Café.

The tea market in the United States is a perplexing one. Tea consumers are developing more sophisticated palates and desiring single origin teas and premium teas, and teas with exotic flavours or infusions. This bodes well for the specialty tea-market, featuring loose-leaf teas or higher end bagged teas in sachets and pyramid bags, sales of which continue to grow. However, Americans like convenience and brewing loose-leaf tea does not lend itself to convenience. Hence, more than 85% of the US tea market is still ready-to-drink tea.

A Euromonitor International report on the US tea market finds that foodservice establishments are helping to educate consumers about tea and its preparation. The report states that this has made tea far more accessible than in the past while shedding the perception that tea is a challenging product to prepare and consume. Companies such as Argo Tea and David’s Tea offer services that teach consumers how to properly prepare teas. Consumers are also being educated on the many varieties available. According to the report, on-trade volume sales of tea grew in 2016.

While consumers now want convenience to coexist with higher quality tea, more are desiring functional beverages, and tea manufacturers could take advantage of this. A 2017 Mintel report on the on-premise US market noted that while iced tea is often consumed for refreshment/hydration and there may be an opportunity to develop an iced tea that satisfies consumers when they need energy.

Given the current dynamics of the tea industry, I’m looking forward to attending World Tea Expo, the only B2B tea trade show in the US, which takes place in Las Vegas, Nevada next week (12-14 June). It’s my first show in two years so I’m eager to see how the show has changed and evolved to keep pace with the shifting tea market. The show is one in transition, having three different owners in the last four years or so. My first World Tea Expo was in 2012 when it was owned by World Tea Media –I had just started with Tea & Coffee Trade Journal days before – and it was my foray into the world of coffee and tea.

The focus of World Tea Expo was on specialty teas and a niche market. While there were a few attendees who operated multiple outlets, the majority were mom and pop operators, and those “looking to enter the tea industry” (with a store or online business). This is great for the tea industry as attendees can learn about the tea industry from the many classes and skill-building workshops, as well as sample a variety of tea from a wide array of tea-producing countries, thus improving their knowledge and hopefully, their tea businesses. However, having an overwhelming number of “mom and pop” operators is not conducive to a large segment of the show’s exhibitors, which want to sell pallets of tea, not ten or twenty pounds, which many of these small operators request.

The major players, that is, the national and multinational tea companies, were not attending World Tea Expo given its niche market focus. Now owned by Penton Media (which was acquired by Informa), which runs the Natural Products shows (West and East), I’m curious to see if the focus of the show has changed. Will it remain focused on the small (albeit growing) specialty tea market or has the show made changes or tweaks to accommodate the needs and wants of the larger tea players? I, along with attendees and exhibitors, will find out next week.

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