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Tea Market Analysis: Growth Strategies for Leading Brands

A comprehensive overview of the tea market, buyer demographics, leading brands, and strategic recommendations. Explore sales data, consumer trends, loyal buyers, and expansion tactics for private label products. Compare 2007 and 2014 audits to identify key opportunities.

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Tea Market Analysis: Growth Strategies for Leading Brands

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Presentation Transcript

  1. Category Project: Liquid Tea Jason Call & Lauren Dockery

  2. Overview • Who buys tea? • Category Role • Leading Brands • Audit Summary • Store Demographics • Strategy and Tactics • 2007 Audit Comparison

  3. Category Snapshot • Enjoyed by all lifestyles

  4. Demographics

  5. Category Role Sales Volume (US) = $1.1 Billion Sales Volume (West South Central) = $100 Million From our data: Average $ Gross Margin = $0.87

  6. Product Penetration #1 #2 #3

  7. New Products in Region since 2007 • Arizona Rx Energy • Honest Tea • Lipton Pure Leaf • Milo’s • Tazo • Turkey Hill

  8. Leading Brands:TotalSales US: 1. Lipton - $430M 2. Arizona - $230M 3. Snapple - $180M 2/3 of total sales Region: 1. Lipton - $52M 2. Red Diamond - $19M 3. Arizona - $14M

  9. Leading Brands:% Repeat Buyers US: 1. Milo’s – 56.7% 2. Arizona – 55.3% 3. Lipton – 54.1% Region: 1. Red Diamond – 55.1% 2. Lipton – 54.8% 3. Sweet Leaf – 44.7%

  10. Leading Brands:Loyalty US: 1. Lipton – 54.4 2. Red Diamond – 49.2 3. Arizona – 41.6 Region: 1. Lipton – 68.0 2. Red Diamond – 63.4 3. Sweet Leaf – 39.2

  11. Deal or No Deal? Most probable tea buyers? • Struggling Urban households • Modest working households • Older couples • Families with children and non-working spouse Market Related Factors: • Moderate purchasing cycle (30 days) • High household penetration • High loyalty • Recent recession

  12. Audit Summary

  13. Category Scorecard

  14. Category Scorecard

  15. Category Scorecard

  16. Category Strategy • Both Flash Market Gas Stations have high gross margins in teas that are sold in smaller oz. • Larger grocery stores have a higher saturation of tea product and a large number of varieties within a manufacturer’s brand • Variety leads to increased profits • Gas stations more interested in traffic building • Grocery stores more interested in profit and cash generating

  17. Audit Summary High % Unique SKUs

  18. Category Tactics • Increase use of Private Label • Small perceived quality gap - “Quality Equivalent” • No switching cost • Expand Private label depth • Flavors • Expand Private label assortment • 6 pack bottles (Kroger)

  19. 2014 Audit SKUs - 136 US Sales - $1.1B (15%) P/L - 3 SKUs (Great Value) Increased average loyalty Category Review 2007 Audit SKUs - 56 US Sales - $1.3B No P/L data

  20. Thanks for Listening! Any Questions?

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