1. TEA in Canada
Market Overview

2. Market Size
Tea is the second most consumed drink in the world, behind only water according to market research firm Euromonitor International. Canada – where the average tea drinker has 11 different varieties in their kitchen cupboards – has a particularly progressive tea-drinking population, which Euromonitor attributes to immigration from countries with strong tea-drinking cultures (China, India, the Middle East and Russia), an interest in being health conscious, and a penchant for learning about different varieties.
Sales of tea reached $1.3-billion in Canada in 2015 – a 23 per cent increase over the year before.

3. Market Size

4. Competitive Set

5. Share of Stomach

6. Share of Beverage Market

7. Projected Tea Sales
“In Canada, it’s all about specialty tea,” says Louise Roberge, president of the Tea and Herbal Association of Canada. “The image of tea is changing so you won’t be afraid to show yourself with a cup of tea and think that you’re old. Millennials are drinking tea, and they love the culture.”
By 2020, Euromonitor forecasts that the tea industry will see $20-billion (U.S.) in growth, and calls it the most dynamic category in global beverages, adding that it is now in “an era of value creation,” with ultra-premium and luxury tea claiming a share of the increase.
Tea aficionados also tend to be more health-conscious and pay greater attention to sugar and other additives on the label. As a result, manufacturers should consider employing a different approach for processing these products – or risk alienating these discerning consumers.

8. Tea & Function
Consumers are increasingly looking for foods and drinks that provide a functional benefit, such as energy boosting, anti-inflammatory, relaxing or antioxidant.
Functional teas are the ideal beverage for those looking for a better-for-you beverage, particularly among iGen consumers: over a third of iGens say they would pay more for coffee/tea with added health benefits. Matcha is a great example of this due to its high levels of antioxidants. Turmeric – a breakout ingredient in 2016 – is now being used in specialty herbal tea drinks. What’s more, kombucha is being positioned as a functional beverage due to its probiotics.

9. Where Consumers Buy Tea
Tea shops are sexy and skew young Though only 10 per cent of tea in Canada is bought there (compared to 53 per cent at grocery stores), tea shops are growing in popularity. Some 22 per cent of Canadians say they buy tea from specialty stores “more often” than a year ago, according to a recent NPD Group study.

10. Millennial’s & Tea

11. Millennial’s & Tea

12. Millennial’s & Tea

13. Millennial’s & Tea

14. Tea Consumption & Income

15. Functional Benefits of Tea

16. RTD Tea Canada
RTD tea retail sales, including carbonated and still RTD tea, jumped 8% in volume terms and 11% in current value terms in 2016 to reach 444 million litres and CAD 621 million, respectively. The key driver behind the take-off of RTD tea sales is rising health consciousness among Canadian consumers, as well as rising demand for authentic, unique experiences from beverage consumption among the younger generation. These factors have contributed to the strong growth of the tea category in Canada over the past 5-6 years. RTD tea’s popularity largely mirrors the growing interest in tea, particularly for products in a more convenient, ready-to-drink format, similar to that for tea-flavoured concentrates and juice in soft drinks.

17. Competitive Landscape
RTD tea sales continue to be dominated by the Nestea brand which claimed a 50% value share in Brand sales benefit from the overall growth of the still RTD tea category, and wide distribution in terms of channels and geographic coverage. In 2015, the brand introduced new flavours, including Blackcurrant and Blueberry Mint Green Tea, to its line-up, catering to consumers’ diverse needs in terms of flavour and taste and also growing health consciousness, according to industry sources. In terms of packaging, it also extended successful launches such as Half Tea and Half Lemonade (launched in summer 2014) to single-serve 500 ml PET bottles in 2015 to widen consumption occasions (re-sealable closure, different from the king can format).

18. Innovations in Ready to Drink Tea
Cold-brew Teas – The U.S. is an iced tea drinking nation, and cold brewing is carving out a new segment within the RTD coffee and tea beverage category. Cold brew tea has become increasingly popular as it creates a more mellow, sweet, iced tea.
Kombucha Tea – An up and coming category that is expected to grow 19% in the next four years, per Beverage Marketing Corporation. Kombucha tea is becoming more widely available at retail and restaurants. Marketed as healthy, the fermented beverage is intriguing to today’s health-conscious consumer.
Whole Leaf Teas – Whole leaf teas that include natural flavors are continuing to increase in popularity among consumers, especially millennials. This is because this demographic is open to experiencing and sampling new, bold and innovative whole leaf tea flavors. We anticipate the interest in whole leaf teas to grow as the beverage industry develops more creative beverages using whole leaf teas that are healthy and taste great.
Matcha Green Tea – Matcha is another type of tea that is currently driving consumer demand as it has become a favorite among health conscious consumers and beverage drinkers. Social media has also played a role in helping to make it a very trendy and widely known type of tea. In fact, Matcha tea can often be seen in the social media posts of health/wellness influencers who use creative angles and filters to share images their freshly brewed cups of Matcha tea. Matcha is also very versatile and can be prepared and enjoyed in so many different ways.
Sweeteners – The FDA Nutrition Facts Label change is set to go into effect this year. This change could encourage companies to incorporate and invest in alternative sweeteners and natural ingredients such has fruits and vegetables.

19. To Learn More About Food Trends That Impact Your Business Decisions….
Michelle Kienitz Henderson, MA
Manager, Industry Liaison and Business Development
Food Innovation Research Studio, George Brown College C: