Smells Like Tea Spirits

Tea drinking is on the rise in c-stores, as well as at cocktail hour
Honest Tea

CHICAGO-- Convenience-store retailers who sell spirits should pay attention to tea. It’s a more versatile beverage than you probably think.

Anne Mills, consumer research manager for Chicago-based Technomic Inc., noted in a September blog that tea-flavored beverage offerings are on the rise both on- and off-premise. In the off-premise retail arena, Lipton earlier this year launched Lipton Sparkling Iced Tea in lemon, peach and raspberry flavors.

Sparkling ICE rolled out a line of Sparkling ICE Teas in the same three flavors, while organic ready-to-drink teas such as Honest Tea are also “trending,” Mills wrote.

In the c-store channel, tea is holding its own against the onslaught from energy drinks and sports drinks, as canned and bottled tea dollar sales were up 7.9% ending 2014 from the previous year’s numbers, according to IRI. Ready-to-drink teas are regarded as “bright spots” in the specialty-beverage door, as well as coffee and milk substitutes.

Mills wrote the tea trend “is ramping up in the foodservice space as the number of iced tea and specialty tea beverages at Top 500 and emerging restaurant chains grew 8.8% and 5.7%, respectively, between 2013 and 2015.”

Wendy’s launched Honest Tropical Green Tea in April, which is made with a proprietary blend of fair-trade organic green tea leaves. Tea is even showing up as a flavor in items beyond beverages, like in Paris Baguette’s Early Grey Milk Tea shaved ice, Mills noted.

That’s The Spirit

Tea is among the fastest growing ingredients in spirit-based beverages at Top 500 and emerging chains, growing 32% on menus between 2013 and 2015, in terms of operator incidence. The growth of adult beverages featuring tea is because of the proliferation of tea-flavored spirits like sweet tea-flavored vodka.

Adding some historical perspective, Mills said the trend began in 2008 when a distillery near Charleston, S.C., introduced a sweet tea-flavored vodka called Firefly. Since then, several other brands have emerged, including Jeremiah Weed Sweet Tea from Diageo, Deep Eddy Sweet Tea Vodka and Seagram’s Sweet Tea. The “growth trajectories are varied” when it comes to new offers like these, said Mills.  

On premise, “mixologists are experimenting with tea as a flavoring element in cocktails, introducing tea tinctures, bitters, syrups and infused spirits to their drink programs,” wrote Mills.

Whether sweet, green or black tea, tea is showing up in adult beverages as both a mixer and flavored spirit. This is a “trend that’s expected to continue as at-home and on-premise mixologists seek to innovate and find new flavor experiences,” the analyst wrote.