Slowly, but surely, the tea category in the US continues to grow in value terms, even as consumption plateaued in the last year. Retail volume sales of tea in the US were flat in 2014, while value sales increased by 3%. The strong performance of higher priced black specialty tea and the shift towards premium fruit/herbal and green tea brands sustained positive growth despite a failure to increase overall retail tea volumes with US consumers. The mainstream, mass-market appeal of high-end tea remains unclear.
Starbucks – through both its Tazo brand of tea concentrates and through its upscale Teavana café chains and brand – has placed a great deal of focus on ‘chai’ flavour in recent product development. Chai tea – at least as defined by North American consumers – still represents a versatile avenue of value growth in the retail tea segment, particularly for those consumers seeking an indulgent, convenient and full-flavour hot beverage. Brands seeking opportunities in chai tea must focus on flavour and the single-serve product format in chai beverages in order to realize its mass appeal.