Monday Morning Java: Tea Category to Boom

It's tea, rather than java, this morning

The tea category is going to boom based on increasing scientific evidence that the brew is good for you. Tea is very good for you indeed; not only is more and more scientific evidence demonstrating the overall health and wellness benefits of tea, but the studies also are showing it's good in helping to prevent a variety of specific ailments.

Various studies, presented at the recent Fourth International Scientific Symposium on Tea and Human Health in Washington D.C., are demonstrating that tea has positive health affects on everything from prostraste cancer, diabeties and bone health, to Alzhiemers disease, mental awareness, heart health, the skin, and weight loss.

For example, three recent scientific studies presented at the international symposium on tea and human health show:

>Drinking five cups of green tea per-day may reduce the risk of prostrate cancer by 48%. The study was conducted by Japanese researchers and published in the peer-reviewed American Journal of Epidemiology.

>A study in the peer-reviewed Journal of the American College of Nutrition suggests that as little as one gram per-day of black tea has the potential to stimulate insulin response and reduce blood sugar levels in some people.

>And a study published in the peer-reviewed American Journal of Clinical Nutrition found that drinking tea regularly may lead to improvements in bone health similar to those observed from calcium intake or physical exercise.

Other studies presented at the international symposium focused on tea's benefits in helping to prevent Alzheimer's disease. Tea's potential role in such prevention is linked to the polyphenol content of the beverage. Green tea contains between 30 and 40% of polyphenols, while black tea contains between 3 and 10%. Black tea is essentially green tea that has been oxidized by fermentation.

It's these same polyphenols that researchers are increasingly suggesting are what protect against prostrate cancer, provide aid in insulin production and lowering blood sugar, are good for the heart, aid in bone strength, help in increasing mental awareness, and are good for our skin.

At the symposium, Dr. Hasan Mukhtar, vice chairman of the department of dermatology at the University of Wisconsin-Madison, said, "The most fascinating thing is, to my knowledge, there is no other natural product that has such diversified effects (as tea)." Writing in the July, 2007 issue of the Journal of Life Sciences, Dr. Mukhtar and his co-authors wrote that health benefits have been attributed to tea, especially green tea, as long as people have been drinking it. However, they note, scientific investigations of tea and the compounds found in it began just30 years or so ago, and the field has only been a focus for researchers in the last 5 years.

Some of the more serious research on tea and human health is being conducted by Dr. Iman Hakim, a professor at the Arizona Cancer Center at the University of Arizona. Dr. Hakim says his research suggests that the compounds in green tea positively affect genes involved in cancer susceptibility and DNA repair. He is careful to add that not everybody will respond in the same manner to drinking green tea however.

Dr. Hakim also has an ongoing clinical trial at the Arizona Cancer Center in which current and former smokers who have chronic obstructive pulmonary disease are experiencing "significant improvement" by drinking green tea on a daily basis. In the study, half the patients are given green tea, and the other half a placebo--a double-blind study. The green tea drinkers are showing much more improvement than those given the placebo, according to Dr. Hakim.

John Foxe, a professor of neuroscience, biology and psychology at City College of the City University of New York, reported on research he's doing into tea and mental alertness and task completion. Dr. Foxe's research is focusing on theanine, another compound in tea. Theanine is an amino acid, and unlike polyphenols, it's able to cross the blood/brain barrier. It's present in equal amounts in green, black and oolong variety teas.

At the symposium, Dr. Foxe reported his ongoing clinical trials are showing that people who drank a solution containing the amount of theanine contained in about 10 cups of tea, were able to focus better on tasks than those who were given a placebo beverage with no theanine in it.

The researcher also said his latest research is finding that as little as 100 milligrams of theanine, combined with 60 milligrams of caffeine, enabled his research subjects to better focus on complicated tasks. This combination of theanine and caffeine is found in about four cups of green tea, Dr. Foxe said. He's taking his research personally as well. Dr. Foxe says he gives his 3 year old son six or seven cups of milk-tea a day.

A cautionary note was pointed out by more than one researcher at the symposium. They said adding high-doses of green tea extracts to foods or beverages is dangerous. According to biochemist Chung Yang, of the department of biochemistry at Rutgers University in New Jersey, there's been a number of reported cases of liver damage do to people taking supplements that contain green tea extracts. He recently authored a paper in the scientific journal Chemical Research Toxicology describing the condition and detailing the science behind it. Dr. Yang also has found in his research that high doses of green tea extracts can damage the kidneys and intestine as well as the liver. There is no evidence that even super-high tea consumption can cause such problems however, Dr. Yang said.

Dr. Muhktar of the University of Wisconsin added there's no scientific evidence to date that adding tea extract to foods or dietary supplements is beneficial. Rather, he says drink tea. "A lot of that is a gimmick," Dr. Muhktar says in terms of adding tea extract to food, beverage and supplement products as an ingredient.

Tea category sales to double in five years

Sales of tea of all kinds has been growing each year for the past 15 years in the U.S., according to the Tea Association USA. Total retail food store tea category sales were about $7.4 billion in 2006, according to Information Resources Inc. The category includes leaf teas, instant, ready-to-drink and liquid concentrate.

However, based primarily on tea's health and wellness attributes, along with the increasing variety of teas coming on the market, the category is poised for "super-growth." According to a recent study conducted by market and consumer research firm Packaged Facts, the tea category (as defined above) is predicted to double in sales in just the next five years. This makes it one of the top--if not the number one--food and beverage category in terms of five-year growth. Packaged facts' study predicts the tea category will achieve sales of about $15 billion by 2012, slightly more than double it's current $7.4 billion in annual sales.

According to Packaged Facts, in edition to tea's wellness and good-for-you positioning, the beverage has a couple other key characteristics propelling its rapid growth. It's all-natural attributes, and the fact it has lower caffeine content than coffee and most carbonated soft drinks, are two attractions for consumers, especially for older people.

"As a functional beverage, tea fits into the well-established movement among aging Baby Boomers to seek out foods and beverages that promise wellness and anti-aging effects," the research report says.

Another key driver for the category, in addition to its health and wellness aspects, is the diversity of teas available in the market, according to Packaged Facts. Chief among this diversity of product offerings are specialty teas. The study predicts that by 2012 the specialty tea segment, which currently comprises about 36% of the category, will grow to command over half of all tea and ready-to-drink tea sales in the U.S.

Organic teas are a major element of this specialty tea segment growth, as are chai, yerba mate, rooibos and numerous other specialty teas from all over the world. Additionally, the report says, ready-to-drink teas of all varieties are increasingly securing a position as an alternative to carbonated soft drinks, which will help double category sales in just five years.

NSFM Analysis: Educational-oriented marketing key

It's clear the tea category is experiencing extremely rapid growth. This is good news for marketers and retailers, as well as consumers.

For tea makers and marketers this rapid growth--a doubling of category sales in just five years--affords numerous opportunities. We suggest tea marketers don't let such rapid category growth blind them to the fact that marketing is still important. After all, even with such rapid overall category growth they need to get consumers to buy "their" brand of tea or tea product. Obviously, a rising tide--in this case a doubling of sales in five years--can lift all brands, so to speak--but it is far from guaranteed.

We suggest a few marketing ideas for tea makers, especially those with specialty or organic brands, to grow their sales dramatically--and make sure their brands and products are part of this phenomenal category growth.

First, tie-in in as many ways possible with the health and wellness trend. Co-marketing campaigns with nutrition educators, health clinics, schools and the like can get your brand where it belongs--into the hands of consumers concerned about wellness. Second, tell your story. Tea is the perfect product vehicle for an educational-oriented public relations campaign. Talk to journalists and others about the health benefits of tea--and your brand--and get them to write about it and you. Advertising. Target your advertising to publications and media that focus on health and wellness. It's a growing niche in the print and broadcast media sectors. Sell the wellness benefits of your brand while educating.

For retailers, the doubling of tea category sales in the next five years offers equal opportunity. First, we suggest food and other retailers increase the sizes of their tea sections and sets in-store. Overall, the sections and sets are currently too small for the category's growth and sales opportunities. In particular, make more room in the sets for specialty and organic teas. These are the two fastest-growing segments of the category and the ones offering the most health and wellness benefits.

Further, get specialty and organic teas off the shelf whenever you can. Use them as part of an overall health and wellness product display on an endcap or elsewhere in the stores. Also, feature them in weekly advertising circulars more often--and tie the feature ads in with off-shelf displays. Work with tea brand marketers to offer in-store educational demos in which the health and wellness benefits of tea are discussed. Educate in store using the staff nutritionist, literature and other take-away informational pieces. Focus on health and wellness.

Health and wellness are going to be one of the top five food and beverage trends in 2008, according to numerous studies, as well as our own analysis. At the top of this trend are specialty and organic teas. These segments fit the key consumer profile for 2008: natural, healthy, tasty, convenient and fresh.

Consumers are becoming more knowledgeable and sophisticated about tea. Just as wine knowledge and sophistication blossomed in the 1980's, and coffee did the same in the 1990's, consumers have been learning more and more about the world of tea in the the last couple years--and they will explore the category even further and deeper in the next few years. Savvy marketers and retailers can win big in the category by focusing on educating consumers to the health and wellness benefits of tea in general, and of their own brands and products specifically.