Teas Tell Many Tales

Walk into any Peet’s Coffee to pick up a pound or two and you’re likely to encounter a neat two-disc paper dial resembling a cocktail menu. As you spin the top circle, details about different coffee types emerge, including flavor notes, environmental characteristics, and the best time of day to drink each one.
Walk into any convenience or grocery store, head for the bottled teas, and you’ll find something different – a ragtag assemblage of glass and plastic bottles occupying inconsistent shelf space in the cooler or along the aisle.

This is not a way to treat a hot-selling item. And iced teas are red hot, up nearly 26 percent last year, according to Beverage Marketing Corp. According to the Tea Association of the USA, tea sales have quadrupled in the last 10 years, to $6.2 billion, and may reach $10 billion by 2010. And the reason is clear. Maybe even better than sex, health sells.

Beverage Marketing Chairman Michael Bellas, for example, recently suggested that the tea boom is similar to that of red wine, which has experienced a massive surge of sales growth powered by reports suggesting that it might help fight heart disease.

Similar research findings indicate that the teas flavonoids and catechins may function as powerful antioxidants, perhaps reducing cancer risk. Additionally, green tea is being marketed as a potential metabolic fuel, one that can result in extra calorie burning and weight loss.

But while the potential for healthy results – especially long term ones – has helped to energize the tea category, it hasn’t necessarily helped retailers reap extra rewards. Consumers might be buying tea at the expense of carbonated soft drinks (quick: name a drink category that isn’t benefiting at the expense of CSD’s!), but they’re not necessarily buying more liquid overall. And that means that, unless they’re able to take advantage of up-sell opportunities, retailers are only breaking even.

But, being natural, traditional, and international, tea has specific advantages over CSDs that other beverages don’t. Those advantages can be leveraged to help improve the margins on the tea products retailers sell, while also increasing their potential to sell even more products. For inspiration, look to tea houses: a wide variety of blends combine with an ever-growing menu of custom products to create a multitude of angles for growth.

For a simple mixture of leaves and water, tea has a flexibility of formulation and, yes, function to enable savvy retailers to approach the category from a number of directions. It’s something that marketers and manufacturers already realize, and are trying to fill through horizontal expansion of their tea families to include products like red and green teas, sweetened, unsweetened, herbals, decafs, and energy varieties.

But the ever-broadening variety of products on the market also allows retailers to pick and choose an assortment that can appeal to many different kinds of consumers.

In other words, motivated retailers can use their tea sections as mininarrowcasting experiments. With tea awareness at an all time high (need number here) and the number of RTD varieties and preparations increasing like so many rabbits, there’s no need to be wedded to a simple brand lineup. Remember, as a retailer, you can tell a story with a cooler door or with a product display, and by mixing and matching, by blending your tea selections, you can tell your consumers that there’s a lot more to the product than just the latest introductions from Snapple, and that there’s a lot more to tea than just antioxidants.

And here’s the good thing: all teas have antioxidants, anyway. With that compelling reason for consumers to buy teas already covered, there are ways to keep them coming back. What’s nice is that you can extend your reach into so many other sales strategies knowing that consumers are turning to tea already.

To that end, what we’ve done is, with the help of some of our buddies in the industry, put together some arrays of teas that indicate five different sales approaches. The idea here? When it comes to catching customers, antioxidants offer one of the widest nets you can throw out there, but to keep bringing them back, a little narrowcasting helps, as well.

TEA FOR TASTE

Here in the taste segment, variety thrives. Your products might include juice and tea blends, conventional “sweet” teas, including mint and lemon, as well as a wide variety of Snapple and AriZona products and clones. The idea is that there are as many flavors and sweetener levels as possible, from Arnold Palmer to Peach Ginger, and room for Republic of Tea’s Pomegranate Green as well.

When laying out a taste arrangement, pull in as many different flavors as possible, and go up and down the pricing ladder. Think your customers will sniff at Lipton with Lemon? What about an organic Sweet Leaf with a grinning granny on the side? Too expensive? They might go for a Snapple. The point here is to offer a shelf set that covers a variety of tastes at a variety of price points.

Track your customers carefully. Cycle through different flavors if your space is limited. Make sure you ask them about the ones they like and don’t like. You might be going conventional here, but you can do so at a premium – it doesn’t all have to be AriZona (although make sure you stock plenty of that, too.) Magnolia Spice teas, for example, offer a variety of sweetened options that will give you a range of flavors at a better price point.

TEA FOR ENERGY

Tea was one of the most popular additives to energy drink formulations last year, and there’s no secret why – the number of health studies associated with tea extract and its natural caffeine content make it a natural fit for this fastgrowing beverage category. But because of that native caffeine, tea is a fine energy source itself. And by factoring in a number of other brews made with Yerba Mate, a solid “natural” energy shelf emerges in your store.

A sign helps guide customers to this setup: “Need a Lift? Turn to Tea,” or some similar language will clue them in to the fact that the shelf they’re looking at combines all of the health benefits of tea with the energy they crave.

Start with conventional or organic green teas, and then go up to black, which have about half the caffeine of a cup of coffee (Honest Tea even has a handy graphic showing that very ratio). From there, move on to products like Guayaki or Bombilla Gourd Yerba Mates, a pair of upscale glass bottles that provide a strong boost. Next to those you can add Kombucha, a fermented tea that packs an even stronger punch. Finally, punctuate the energy category with an exclamation point – Inko’s, Steaz, AriZona, and even conventional products have their own energy drinks that use white, green or black teas for flavor and caffeine.

TEA FOR SNOBS

Welcome to the high end, the fine wine-like world of delicacy and “terroir.” No products in this section need to be sweetened, because your consumers like their products straight, clean, and with a point of origin.

Here, you run products with the whiff of import, both regularly and on a rotating basis. A spotlight on India, China, Japan, or even Great Britain gives you the opportunity to put a cold-brewed single-sourced product on the shelf at a premium. With companies including Tazo, Honest, Ito En, and products ranging from matcha to barley tea, a snobby shelf with a steady turn can bring in plenty of high-margin sales.

Or go for color: Inko’s White; Kalahari Red; Tempsest Green; Honest Tea’s Just Black; New Leaf Blue. They all offer you a chance to catch the inquisitive consumer in a series of taste comparisons. And yes, you can probably do it all with Snapple and AriZona, if you think your customers might embrace different tea types that way, as well.

TEA FOR FUN

Aside from energy, there are a lot of tea products that are being marketed with a sense of fun. Note TeaZazz’s and Steaz’ carbonated tea products, as well as Jones Organics. They’ve all got the chance to go under a “have you tried me?” label, along with Fuze’s odd tea, milk and juice blends and the intriguing Thai iced tea blends from Taste Nirvana. Blends work well here, as well, be they the coffee/tea mix from Cha Dao, the same Arnold Palmer from AriZona or, if you want to upscale it, Sweet Leaf ’s Half and Half. Here’s where the Swiss Hemp Iced Tea might sell, as well as that great tea mixer for booze, Delta Blues iced tea.

And, because we couldn’t leave it out, we’ve also included:

TEA FOR HEALTH

Here’s where you can roll out not just the antioxidants, but specific salubrious functions. Products like Anteadote and Tonic Scene offer lines that are geared toward relieving colds, upset stomachs, providing extra vitamins and relieving stress. Teany’s whimsical, minimalist blends work here, as does that ubiquitous, “calorie burning” product, Coke and Nestea’s Enviga. A shelf of herbal teas, a stand with Ricola nearby, and some Sudafed behind the counter; what more could one need?