Tea-ing Up

Fresh brewed iced tea leaving sugary drinks in its wake.

By
Lara Jackson, Freelance writer

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Tulsa, Okla.-based QuikTrip offers both dispensed iced tea and freshly brewed iced tea at its more than 650 locations and, according to Mike Thornbrugh, manager of public and government affairs, “QuikTrip does not react to fads. We believe … tea will be around a long time.”

Steady Rise

While dispensed and RTD teas are holding their own, freshly brewed is the tea trend to watch. Since 2007, there has been a steady rise in the consumption of freshly brewed tea, and the Golden Arches may be the chain to thank for it. According to Samuel Nahmias, executive vice president and COO of Cedarhurst, N.Y.-based StudyLogic, “There were 230 million cups of freshly brewed iced tea sold in 2007, compared to 1.3 billion cups sold five years later in 2012. McDonald’s sold 69 million cups of freshly brewed iced tea in 2007 and jumped to 800 million cups in 2012. In 2007, McDonald’s began heavily promoting its sweet tea. With 14,000 locations, McDonald’s held 30% to 60% of the share in freshly brewed iced tea.”

And tea continues to make a name for itself. According to Nahmias, “In 2012, McDonald’s held 22% of the share in iced tea. The top convenience stores selling iced tea were 7-Eleven, with a 4.9% share; Circle K with 1.2%; Speedway/Super-America with 1%; and Wawa with 0.9%.

“Soda is contracting in the sweet beverage category; people are moving toward a more healthy beverage choice,” Nahamis continues.

Tea lovers seem to be open to trying new things, too. Unlike soda fans, who many times will stay with their favorite drink, iced-tea drinkers enjoy the refreshment of the drink and are more likely to try a new flavor or brand.

“The choice of iced tea, especially RTD tea, runs the gamut. There are so many innovations and flavors, from green to white teas, which contributes to the growth of this category,” says Gary Hemphill, managing director of research for New York-based Beverage Marketing Corp.

“Consumers can customize their iced tea, [such as] adding flavors,” says Mark DiDomenico, director of business development for Chicago-based Datassential, which tracks the incidence of items on menus. “Customization is the strength of the c-store. Many c-stores offer customers different flavors to make that special drink. [They] use the drink as the base to customize their beverage to their liking.”

Also, based upon the time of the year, consumers may change their tastes to something lighter or sweeter, customizing their beverages based upon taste and their particular mood.

“[Holmes Oil] has expanded the stores with flavor shots so customers can customize their drink with strawberry, raspberry, lemon, lime or vanilla,” says Zikias.

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