OD4297 RTD Tea Production Industry Report

INDUSTRY REPORT OD4297
RTD Tea Production
Still steeping: Greater consumer demand is expected to bolster industry revenue growth
Thi Le | August 2021
IBISWorld.com 1-800-330-3772 info@IBISWorld.com

RTD Tea Production August 2021
Contents
COVID-19 (Coronavirus) Impact Update.............................3 COMPETITIVE LANDSCAPE.......................... 23
ABOUT THIS INDUSTRY.................................. 5 Market Share Concentration............................................. 23
Key Success Factors........................................................23
Industry Definition................................................................5 Cost Structure Benchmarks............................................. 24
Major Players...................................................................... 5 Basis of Competition......................................................... 26
Main Activities..................................................................... 5 Barriers to Entry............................................................... 27
Supply Chain....................................................................... 6 Industry Globalization........................................................ 27
INDUSTRY AT A GLANCE................................ 7 MAJOR COMPANIES...................................... 29

Executive Summary............................................................ 9 Major Players.................................................................... 29
Other Companies.............................................................. 32
INDUSTRY PERFORMANCE..........................10
OPERATING CONDITIONS............................ 34
Key External Drivers.........................................................10
Current Performance........................................................ 11 Capital Intensity................................................................. 34
Technology & Systems......................................................34
INDUSTRY OUTLOOK.................................... 14 Revenue Volatility..............................................................35
Regulation & Policy........................................................... 36
Outlook.............................................................................. 14 Industry Assistance........................................................... 36
Industry Life Cycle............................................................. 16
KEY STATISTICS............................................ 38
PRODUCTS & MARKETS............................... 17
Industry Data..................................................................... 38
Supply Chain..................................................................... 17 Annual Change..................................................................38
Products & Services.......................................................... 17 Key Ratios......................................................................... 38
Demand Determinants...................................................... 18
Major Markets....................................................................18 ADDITIONAL RESOURCES............................39
International Trade............................................................ 20
Business Locations........................................................... 21 Additional Resources........................................................ 39
Industry Jargon..................................................................39
Glossary............................................................................ 39
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COVID-19 IBISWorld's analysts constantly monitor the industry impacts of current events in real-time – here is an update of
(Coronavirus) how this industry is likely to be impacted as a result of the global COVID-19 pandemic:
Impact Update · RTD Tea Production industry demand increased in 2020 due to the immunity-boosting properties of teas.
· Industry operators are expected to experience some disruptions in the early stage of the COVID-19 (coronavirus)
pandemic as major tea-exporting countries imposed restrictions to curb the coronavirus spread, affecting raw input
supplies.
· In response to the economic consequences of coronavirus, the federal government passed multiple stimulus
measures, which apply to industry operators and benefited consumer spending.
Note: The content in this report is currently being updated to reflect the trends outlined above.
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About IBISWorld
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offer research on industries in the US, Canada, Australia, New Zealand, Germany, the UK, Ireland, China and Mexico, as well as industries that
are truly global in nature.
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About This Industry

Industry Definition Companies in this industry brew and bottle tea in a ready-to-drink state.
Major Players Unilever
Arizona Beverage Company
The Coca-Cola Bottling Company United
Keurig Dr Pepper
Main Activities The primary activities of this industry are:
Producing ready-to-drink tea beverages
The major products and services in this industry are:
Black tea
Green and white tea
Herbal tea
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Supply Chain
SIMILAR INDUSTRIES
Coffee Production in the US Tea Production in the US Soda Production in the US Juice Production in the US
RELATED INTERNATIONAL INDUSTRIES
Tea, Coffee and Other Food Tea Production in China Tea Processing in the UK Coffee & Tea Production in Canada
Manufacturing in Australia
Tea, Coffee and Other Food
Manufacturing in New Zealand
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Industry at a Glance
Key Statistics Key External Drivers % = 2016–21 Annual Growth
$6.7bn 3.0% 0.1%

Revenue Per capita disposable income Trade-weighted index
Annual Growth Annual Growth Annual Growth

0.0% -0.7%
Healthy eating index Per capita soft drink consumption
2016–2021 2021–2026 2016–2026
N/A
1.1% 1.3% Per capita tea consumption
$287.6m Industry Structure

Profit
POSITIVE IMPACT
Annual Growth Annual Growth
Life Cycle Revenue Volatility
2016–2021 2016–2021
Growth Low
-9.3%
MIXED IMPACT
Capital Intensity Concentration
Medium Medium
4.3% Regulation & Policy Technology Change
Profit Margin Medium / Steady Medium
Annual Growth Annual Growth Barriers to Entry Industry Globalization

Medium / Increasing Medium / Increasing
2016–2021 2016–2021
NEGATIVE IMPACT
-3.1pp
Industry Assistance Competition
Low / Steady High / Increasing
486
Businesses
Key Trends
2016–2021 2021–2026 2016–2026  The purported health benefits of teas increase demand for
industry products
13.6% 5.7%
 The rise of new niche products has contributed to the
industry's growth
 Tea has become a staple in US households; nonetheless,

10,050 RTD tea is still a discretionary good
Employment
 Improving global macroeconomic conditions will support
Annual Growth Annual Growth Annual Growth industry revenue growth
2016–2021 2021–2026 2016–2026  In the coming years, the healthiness of Americans' diets will
9.2% 2.5% recover
 Most industry products have full market acceptance and are

expected to undergo minimal reformulation
 Greater consumer demand will bolster profitability for

$575.4m companies that can attain higher product prices
Wages
2016–2021 2021–2026 2016–2026
6.1% 2.3%
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Products & Services Segmentation
Major Players SWOT
STRENGTHS
Growth Life Cycle Stage

Low Volatility
Medium Imports
Low Customer Class Concentration
WEAKNESSES
Low & Steady Level of Assistance

High Competition
Low Profit vs. Sector Average
High Product/Service Concentration
High Capital Requirements
OPPORTUNITIES
High Revenue Growth (2016-2021)

High Performance Drivers
Per capita soft drink consumption
THREATS
Low Outlier Growth

Per capita disposable income
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Executive Summary Still steeping: Greater consumer demand is expected to bolster industry
revenue growth
The Ready-to-Drink (RTD) Tea Production industry produces tea beverages that are packaged and ready for
consumption. Bolstered by rising health consciousness and improving disposable income, demand for industry
products has been growing. As consumers turn away from sugary beverages such as soda, tea has become a
favored alternative. Additionally, according to the Tea Association of the USA, RTD tea is the most popular way tea
is consumed in the United States. Moreover, the industry is expected to grow amid the COVID-19 (coronavirus)
outbreak as teas have immunity-boosting properties, which are health-beneficial to fight against flu. Thus, IBISWorld
expects revenue to expand at an annualized rate of 1.1% to $6.7 billion over the five years to 2021, including an
anticipated growth of 1.9% in 2021 alone.
As per capita soft drink consumption fell and consumers sought healthier substitute beverages, RTD tea producers
experienced increased demand and revenue growth over the current period. Tea, which is high in compounds that
may boost metabolism and fight cancer, has benefited greatly from increased consumer health consciousness in
recent years. RTD tea has particularly benefited from this trend as it has increasingly gained a market position in
convenience stores and vending machines, where it more easily functions as a lower-calorie, more natural
alternative to sodas and other RTD beverages. Due to consistently growing demand and revenue, new players are
induced to enter the industry over the past five years. Nevertheless, heavy price competition and increases in costs
of production have pressured profit margin over the past five years.
As industry revenue grows, new companies are rapidly entering the industry. The industry continues to attract new
consumers due to the growing variety of flavors, strengths and sweeteners offered by manufacturers. Fast-growing
niche products such as kombucha and mate are attracting new industry entrants. With the number of operators
forecast to continue increasing over the five years to 2026, heavier competition could continue to dampen profit
growth. However, greater consumer demand will bolster profitability for companies that can attain higher product
prices, as differentiated tea offerings have enabled industry players to charge premium prices for unique blends.
Overall, IBISWorld expects industry revenue to grow at an annualized rate of 1.3% over the next five years to $7.1
billion in 2026.
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Industry Performance
Key External Per capita disposable income

Drivers
Although tea is increasingly becoming a staple product for many consumers, ready-to-drink (RTD) tea is still a
discretionary expense. When disposable income levels increase, consumers are not only able to purchase more
industry products, but they may also trade up to premium industry products that carry higher price tags. IBISWorld
expects per capita disposable income to increase in 2021, presenting a potential opportunity for the industry.
Per capita tea consumption
A significant amount of the tea that US consumers purchase comes in the form of canned, bottled or refrigerated
industry products. As a result, an increase in per capita tea consumption will reflect an increase in demand for
industry products and, in turn, a likely increase in revenue for RTD tea producers. IBISWorld expects per capita tea
consumption to increase marginally in 2021. However, this driver has been volatile over the past five years.
Healthy eating index
Tea has many perceived health benefits. Moreover, unsweetened RTD teas are naturally calorie-free and many
other industry products are only lightly sweetened or sweetened with calorie-free additives. As consumers pay more
attention to their health, demand for RTD tea will likely increase. IBISWorld expects the healthy eating index, which
measures the degree to which an average US consumer adheres to a healthy diet, to decrease in 2021, posing a
potential threat to the industry.
Per capita soft drink consumption
RTD drinks are usually consumed cold; as a result, demand for these products experiences stiff competition from
other beverages traditionally served cold, such as soft drinks. Moreover, many US consumers prefer their RTD tea
at least lightly sweetened, so soft drinks (which are also sweet) represent a substitute for industry products. When
per capita soft drink consumption increases, demand for RTD tea (and accordingly, industry revenue) will likely fall.
IBISWorld expects per capita soft drink consumption to fall in 2021.
Trade-weighted index
The trade-weighted index (TWI) measures the strength of the US dollar relative to the currencies of its trading
partners. When the TWI decreases, the US dollar weakens relative to its main trading partners. A weaker US dollar
benefits this industry because imports are then relatively more expensive and the relative price of industry exports
decreases abroad. The trade-weighted index is expected to fall in 2021.
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Current The Ready-to-Drink (RTD) Tea Production industry manufactures brewed

Performance teas in bottles or cans that are available for immediate consumption.
This industry mainly competes with industries that manufacture flavored waters, juices, functional beverages (i.e.
energy drinks and sports drinks) and carbonated soft drinks. Rising health consciousness among consumers has
shifted demand away from the more-sugary options, toward teas and flavored waters. As domestic demand
increased, the industry has become more competitive, with a growing roster of participating companies launching
ever-expanding product lines into new markets. Further, demand for teas is expected to boom amid the COVID-19
(coronavirus) as teas have immunity-boosting properties, which are highly valuable during the epidemic. Thus, the
RTD Tea Production industry has grown in recent years and industry revenue has risen accordingly, growing at an
annualized rate of 1.1% to $6.7 billion over the five years to 2021, including the growth of 1.9% in 2021 alone.
HEALTH BENEFITS DRIVE GROWTH
Picking up on the overall consumer trend of embracing health

consciousness, RTD tea producers have, in recent years, touted the
health benefits associated with tea to appeal to consumers looking for
healthy alternatives to traditional RTD beverages.
Most forms of tea are naturally high in antioxidants (chemicals widely believed to have cancer-fighting properties)
and tea producers have taken advantage of this fact. Moreover, in 2019, Unilever's Pure Leaf unveiled three new
hibiscus-infused herbal tea flavors (mango-hibiscus, peach-hibiscus and cherry-hibiscus) as a part of its Tea House
Collection. Herbal tea, which contains ingredients other than the tea plant, such as bark or roots, has been widely
publicized for its health benefits; however, tea from the tea plant (black or green) remains the most consumed type
of tea in the United States.
Antioxidants have also been rumored to have metabolism-boosting properties which can aid in weight loss; since
green tea is particularly high in antioxidants, green tea sales have benefited from widespread interest in weight loss
as a result of the national obesity epidemic. However, the healthy eating index, which measures the percentage of a
recommended diet an average American consumes, decreased from 70.7% in 2019 to 68.7% in 2021. To the
industry's benefit, the decline in the healthy eating index was due to decreases in the consumption of fruits and
vegetables over the past five years. Conversely, per capita tea consumption has increased an annualized 0.8% over
the five years to 2021. In specific, the purported health benefits of teas increase demand for teas and industry
products, in turn driving industry revenue growth. Furthermore, while all tea is known for its healthful benefits, over
80.0% of tea consumed in the United States is in the form of iced tea, according to the Tea Association of the USA.
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INNOVATION AND COMPETITION
Since major brands, such as Snapple, achieved success by initially

introducing exotic flavors (e.g. peach and raspberry) and diverse products
(including reduced-calorie and all-natural teas) to the tea market, RTD tea
producers across the industry have invested in the creation of new
product lines.
More recently, in August 2019, Snapple introduced a limited edition called “Snapple Hearts The Boroughs and
Burbs” bottles for a range of its best-selling flavors in the respective areas of New York City's five boroughs, Long
Island and New Jersey. In specific, the flavors included in the illustration-inspired labels were peach tea, orangeade,
lemon tea, kiwi strawberry, apple, diet peach tea and fruit punch. Similarly, major industry player Arizona Beverage
Company has brought its innovation to a new level when striking a licensing deal with a cannabis company, Dixie
Brands Inc to potentially come up with weed-infused drinks. In the same year, Brands Within Reach's introduced a
new line of natural black and green teas called Nestea Flash Brewed sourcing from high-quality tea leaves in India.
Additionally, the rise of new niche products, such as kombucha and mate tea, has contributed to the growth of this
industry over the past five years. Kombucha, created domestically by companies such as GT's Living Foods, is a
fermented tea fortified with B-vitamins and probiotics meant to promote healthy digestion and a strong immune
system. Mate, originally from South America, is a caffeine-rich drink that was made mainstream in the United States
recently by brands such as Herbal Mist, which sells the product in RTD form. These trends, including various blends
of other teas, flavors and sweeteners, have encouraged new companies to enter the industry at an annualized rate
of 13.6% to 486 industry operators over the five years to 2021. Innovative products have required a more skilled
workforce to engage in research and development. Therefore, employment has increased at an annualized rate of
9.2% to 10,050 workers over the five years to 2021, while total wages have also increased an annualized 6.1% to
$575.4 million during the same period.
Moreover, the proliferation of new flavors and product lines has solidified the place of RTD teas in convenience
stores, vending machines and other locations where, traditionally, only soda, juice and water were offered. As teas
are offered for sale in the same locations as sodas and other sweetened drinks, more consumers are substituting
high-calorie beverages with RTD tea. Over the five years to 2021, per capita soft drink consumption has declined an
annualized 0.7%. As a result, health-conscious consumers who are increasingly rejecting soda and other sugar-
sweetened RTD beverages are further contributing to the growing demand for RTD tea, positively influencing total
industry revenue.
PROFIT AND TRADE
Tea has become a staple in US households; nonetheless, RTD tea is still a

discretionary good.
Since RTD tea is packaged and ready for consumption, it is more expensive per serving than tea bags and
powdered iced tea mixes. As a result, demand for RTD tea can be expected to decrease as disposable income
levels drop and consumers substitute more affordable goods for pricier products. However, over the five years to
2021, per capita disposable income is projected to increase at an annualized rate of 3.3%, enabling consumers to
trade up to pricier premium beverages. The industry is also marked by the presence of large, multinational
corporations that have significant market powers. However, product offerings from these large companies endure
significant price competition from each other as they frequently offer promotions to boost sales, leaving small room
for price increases. Moreover, costs have increased during the period as industry operators are continuously
investing in research and development to differentiate themselves from their competitors. Furthermore, wages and
employment have increased further raising costs and hurting industry-wide profitability. As a result, the average
industry profit margin (measured as earnings before interest and taxes) is expected to fall from 7.4% in 2016 to
4.3% in 2021.
While RTD tea is considered a discretionary good, its health benefits help shield the industry demand from large
changes in the broader economy. However, in 2020, while industry demand was not negatively affected by the
COVID-19 outbreak, the industry's supply chain experienced some disruptions due to the lockdowns in some major
tea exporting countries. In particular, governments in China, India, Kenya, Sri Lanka and Vietnam imposed
restrictions to contain the spread of the coronavirus, thus leading to production slowdowns and delays while demand
for tea leaves surges. In India, as the government ordered 1.3 billion residents to stay home, transportation and leaf-
picking activities were adversely affected. Therefore, exports from India fell 34.0% in March 2020, pushing the price
of raw teas to rise 30.0% compared with the pre-lockdown levels, according to the article “Coronavirus brews trouble
for tea, disrupts supply as demand spikes” on Reuters. As a result, purchase costs increase in 2020, pressuring
industry profit.
The trade-weighted index (which measures the value of the US dollar respective to foreign currencies) decreased at
an annualized rate of 0.3% over the five years to 2021. As foreign-produced goods become relatively more
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expensive relative to US-produced goods, imports decreased accordingly during the current period. Over the five
years to 2021, the value of imports fell at an annualized rate of 2.5% to $680.7 million despite consumers
increasingly demand exotic tea offerings from overseas over the past years. Similarly, the total value of industry
exports declined marginally at an annualized rate of 0.7% to $716.8 million over the five years to 2021.
Historical Performance Data

Per capita
Domestic disposable
Revenue IVA Establishments Enterprises Employment Exports Imports Wages Demand income
Year ($m) ($m) (Units) (Units) (Units) ($m) ($m) ($m) ($m) ($)
2012 6,441 949 188 173 6,481 498 500 408 6,443 39,782
2013 5,793 857 209 195 6,523 578 547 423 5,762 39,002
2014 5,832 874 213 200 6,448 683 589 407 5,738 40,308
2015 6,142 952 251 235 5,946 768 630 381 6,004 41,684
2016 6,340 1,043 274 257 6,482 742 771 428 6,369 42,208
2017 6,438 968 318 297 8,612 686 821 466 6,573 43,233
2018 6,497 969 397 366 8,724 635 735 507 6,596 44,552
2019 6,321 964 455 419 9,284 670 620 534 6,271 45,302
2020 6,565 1,002 490 454 9,734 665 719 559 6,618 47,768
2021 6,689 1,023 522 486 10,050 717 681 575 6,653 49,531
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Industry Outlook
Outlook The Ready-to-Drink (RTD) Tea Production industry will continue to grow
over the five years to 2026, albeit at a slower rate than the previous
period.
As the pandemic subsides, demand for RTD teas will continue to grow, but at a decelerated rate. Consumers are
expected to continue the trend of changing dietary patterns to incorporate more low-sugar and low-calorie
beverages, such as tea, into their diets as alternatives to carbonated soft drinks. Additionally, increasing disposable
income will cause consumer spending to grow, especially for pricier drinks. As successful brands continue to expand
their market reach, IBISWorld expects industry revenue to increase at an annualized rate of 1.3% to total $7.1 billion
over the five years to 2026.
RISING REVENUE
As per capita disposable income is expected to increase at an annualized

rate of 2.5% over the five years to 2026, consumers will make more
impulse purchases of goods at convenience stores and vending machines
as well as other consumers trading up to premium, more expensive RTD
tea products.
Moreover, public health preferences in the United States will further encourage demand; per capita soft drink
consumption is expected to fall at an annualized rate of 0.8% during the same five-year period and consumers will
increasingly substitute sodas and other sweetened beverages with RTD tea beverages due to their perceived health
benefits. Therefore, as consumers' have more per capita disposable income and their confidence increases, they
will increasingly purchase more RTD tea products.
In the coming years, the healthiness of Americans' diets will recover, with the consumption patterns of all measured
food categories expected to improve. As a result, increased awareness regarding the negative health outcomes
associated with soft drinks, combined with continued volatility in the prices of soft drink inputs, are expected to
cause average soft drink consumption to continue its gradual decline. Collectively, these factors are expected to
bolster demand for RTD tea over the five years to 2026. However, growth will be inhibited by the expansion of other
caffeinated substitutes, such as coffee. In addition, energy drinks are firmly entrenched as a caffeinated beverage
option, limiting growth in tea consumption.
Improving global macroeconomic conditions will also support revenue growth despite imports are projected to
rebound at an annualized rate of 0.4% to $695.3 million over the five years to 2026. Overseas demand for industry
products will recover amid consistent product innovations by industry operators, with the value of exports expected
to increase at an annualized rate of 2.0% to $790.2 million during the same five-year period.
While revenue is expected to grow over the next five years, costs are expected to rise accordingly. Large industry
operators are expected to continue to invest in costly research and development to differentiate themselves from
their competitors as competition intensifies. As a result, the profit margin is expected to fall slightly over the next five
years despite consistent revenue increases.
EXPANSION AND DEVELOPMENT
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Most industry products have full market acceptance and are expected to
undergo minimal reformulation over the next five years; nonetheless,
product categories such as fermented teas and exotic brews of different
tea leaves still provide opportunities for new entrants.
Therefore, the number of industry enterprises is expected to grow, albeit at a relatively slower pace than the
previous period, at an annualized rate of 5.7% to 642 operators over the five years to 2026. Following suit, total
industry employment is expected to rise at an annualized rate of 2.5% to 11,388 employees during the same period.
Industry wages are also expected to grow at a faster rate than revenue during the outlook period, driving wages to
account for 9.0% of revenue in 2026, up from 8.6% in 2021. As the industry becomes more competitive and new
markets become saturated with RTD tea offerings, industry players will likely have to invest further in research and
development professionals who can create new product lines to maintain a competitive advantage.
Performance Outlook Data

Domestic Per capita
Revenue IVA Establishments Enterprises Employment Exports Imports Wages Demand disposable
Year ($m) ($m) (Units) (Units) (Units) ($m) ($m) ($m) ($m) income ($)
2021 6,689 1,023 522 486 10,050 717 681 575 6,653 49,531
2022 6,676 1,033 550 516 10,217 728 664 583 6,612 48,558
2023 6,784 1,055 582 549 10,538 734 682 599 6,731 50,300
2024 6,895 1,078 614 583 10,858 752 686 616 6,829 52,110
2025 7,011 1,098 645 616 11,131 771 691 630 6,930 54,044
2026 7,128 1,119 671 642 11,388 790 695 644 7,033 56,056
2027 7,221 1,135 691 664 11,595 807 697 655 7,111 57,528
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Industry Life Cycle The life cycle stage of this industry is Growth
LIFE CYCLE REASONS
RTD teas are increasingly being introduced to new markets

Industry operators are spending research and development dollars to create new product lines
Industry value added is growing in line with US GDP
The Ready-to-Drink (RTD) Tea Production industry is in the growth phase of its life cycle. Industry value-added,
which measures an industry's contribution to the US economy, is expected to grow at an annualized rate of 0.7%
over the 10 years to 2026. In contrast, the US GDP is expected to grow at an annualized rate of 2.3% over the same
period, indicating the industry is growing slower than the US economy. The industry has expanded rapidly in the first
five years of the period but has slowed down since the industry reached a saturation point where participating
industry operators compete vigorously to gain market share as customer demand tapers off. Nonetheless, with
growth opportunities, the total number of industry enterprises is expected to grow at an annualized rate of 9.6% over
the 10 years to 2026, with establishments growing an annualized 9.4% during the same 10-year period, indicating
industry expansion and growth.
Rapidly expanding product lines and new markets are driving this growth over the 10-year period. Industry products
are readily available at nontraditional tea markets (such as vending machines and convenience stores), exemplifying
RTD tea's market range. RTD tea has gained popularity since the mid-2000s, leading more companies to enter the
industry and increasing overall industry competitiveness. To maintain an advantage, industry operators must
develop new products to attract consumer attention and, in some cases, entice customers who would not have
previously purchased either tea or RTD beverages. This is done by creating products with natural ingredients and
fewer added sugars. Similarly, products such as some high-antioxidant green tea beverages and kombucha have
been designed to specifically attract health-conscious customers; as a result, these products introduce RTD
beverages into markets where they may not have been prominent before, such as health food stores. This
simultaneous and synergistic development of product lines and new markets contributes to the industry's overall
growth.
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Products & Markets

Supply Chain Key Buying Industries Key Selling Industries
1st Tier 1st Tier
Supermarkets & Grocery Stores in the US Wholesale Trade in the US
Convenience Stores in the US Plastic Bottle Manufacturing in the US
Food Service Contractors in the US Snack Food Production in the US
Street Vendors in the US 2nd Tier
Grocery Wholesaling in the US Hay & Crop Farming in the US
2nd Tier Janitorial Services in the US
Consumers in the US Printing in the US
Products & Services
BLACK TEA
Black tea continues to dominate industry demand at an estimated 65.9%

of industry revenue.
Black tea is produced through a crushing and fermenting process. According to the Tea Association, over 80.0% of
tea consumed in the US was black tea. While black tea is still the most popular tea of choice, its health benefits are
lower than other tea leaves due to the high level of processing involved in the production. As a result, growth from
the green and white tea segment has outpaced demand for black tea, decreasing its share of total industry revenue.
GREEN AND WHITE TEA
This segment includes green and white tea at an anticipated 24.8% of

industry revenue.
Green tea is produced through the withering and heating of tea leaves to prevent oxidation and minimize
processing. White tea is made exclusively with tea leaf buds and, with the least amount of processing, white tea
boasts the highest antioxidant count of all tea types. Green tea, however, accounts for the majority of demand
because tea buds are only available in the spring and availability is limited relative to green tea. Extensive testing
touting the health benefits of green tea has expanded this segment's share of industry revenue considerably over
the five years to 2021.
HERBAL TEA
Herbal teas comprise an estimated 9.3% of industry revenue.

They include plant infusions made from any leaf, root, fruit or flower that comes from a plant other than camellia
sinensis. Mainstream and niche tea producers are progressively innovating herbal tea flavors as consumer demand
heightens, particularly for herbal teas that offer some health benefits. Examples include some of the Coca-Cola
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Company's Honest Tea brand products. Rising demand from the aging population is partly attributable to the intense
marketing on the part of industry operators to boost awareness about the health benefits of herbal teas.
Consequently, herbal tea's share of revenue is expected to grow in line with the industry over the five years to 2026.
Demand Demand for the Ready-to-Drink (RTD) Tea Production industry's products
Determinants depends on several factors including price levels, consumers' health
concerns and product innovation.
Demand for the industry has been lifted by improving economic conditions, such as disposable income, in addition
to a shift in consumer preferences to healthier goods. Demand is also subject to seasonal variations and weather
conditions as sales are usually higher in warmer months. Furthermore, many iced tea drinkers are also very brand-
loyal and will purchase their favorite brand despite higher prices.
Over the five years to 2021, per capita disposable income has grown at an annualized rate of 3.3%, thus consumers
are more likely to purchase premium beverages, such as RTD tea. Moreover, consumers have become increasingly
more health-conscious, driving demand for tea, which has perceived health benefits.
This industry tends to ebb and flows with fluctuations in demand for tea. As tea consumption increases, industry
operators will likely benefit as consumers try different varieties of tea, including RTD tea. Moreover, there has been
growing acceptance for tea-based beverages, which has been accelerated by mounting evidence supporting the
unhealthiness of soda. To this end, declining demand for soda is expected to benefit industry operators, as
consumers look for healthy alternatives to artificially flavored beverages.
Major Markets
GROCERY STORES
Grocery stores represent the largest market for ready-to-drink (RTD) tea
products and are expected to account for 38.0% of revenue for the RTD
Tea Production industry in 2021.
Grocery stores tend to have a wide variety of products that target different consumer preferences. To this end,
grocery stores have been increasing the retail space allotted for tea-related beverages due to the growing demand
for tea. Due to being larger than their convenience store counterparts, grocery stores typically offer a wider range of
products for consumers to choose from, which gives them a competitive advantage over smaller outlets. In 2020
alone, this segment is expected to expand as a share of revenue as consumers stock up on long-shelf-life
beverages, including RTD teas at grocery stores at the start of the lockdown period.
WAREHOUSE CLUBS AND SUPERSTORES
Other downstream retailers include warehouses and superstores.

However, this segment's share of industry revenue is expected to shrink due to substantial gains in other segments
that provide more convenient solutions. These stores offer a myriad of other products, ranging from appliances to
apparel. As a result, consumers may choose to purchase RTD tea in bulk for their families or as an impulse
purchase while shopping. In 2021, this segment is expected to account for 26.7% of industry revenue. Similar to
grocery stores, the panic buying resulting from the COVID-19 outbreak in early 2020 caused this segment to
increase at a share of industry revenue in 2020.
18 IBISWorld.com
GAS STATIONS AND CONVENIENCE STORES
Gas stations and convenience stores are expected to account for 17.4% of
industry revenue in 2021.
Gas stations and convenience stores constitute a key market for RTD tea manufacturers, especially because they
are often open 24 hours per day, making them an ideal location for impulse purchases of beverages and snacks.
Additionally, convenience stores target consumers with time constraints, such as consumers who are on a lunch
break or traveling. Both of these characteristics make convenience stores natural markets for RTD beverages
(including RTD tea) which are designed to be convenient and affordable enough to qualify as a potential impulse
buy.
This market is expected to decrease as a share of industry revenue although disposable income levels trend higher.
While disposable income will drive increases in impulse purchases, increasing unemployment will likely hurt this
segment as there is less work that constrains consumers' time, resulting in lower demand for convenience store
purchases.
EXPORTS
Exports account for a moderate share of industry revenue, with over half
of exports going to Canada.
Exports are expected to account for 10.7% of industry revenue in 2021. In specific, exports have declined an
annualized 0.7% to $716.8 million over the five years to 2021.
OTHER
Vending machines are forecast to be the fastest-growing market for the

RTD Tea Production industry over the five years to 2021.
Vending machines target impulse buyers and are convenient outlets for consumers. Small and medium-sized
organizations, schools and hospitals occasionally provide vending machines. Similar to convenience stores, vending
machines have the added benefit of long operating hours. This segment is expected to increase as vending
machines continue to enable consumers to pay for items by credit card. This added convenience will make
purchasing industry products from vending machines more accessible, resulting in greater demand for industry
products. In 2021, vending machines are expected to make up 4.6% of revenue.
19 IBISWorld.com
International Trade Exports in this industry are Medium and Steady
Imports in this industry are Medium and Decreasing
International trade is expected to grow in line with the rising demand for tea. Although tea consumption has
historically been more prominent in eastern countries, such as China and Japan, tea is becoming increasingly
mainstream in the United States. Tea, particularly green tea, is growing in popularity as negative publicity continues
to surround beverages with high fructose corn syrup or other artificial sweeteners. As consumers, domestically and
abroad, shift to tea due to its perceived health benefits, operators in the Ready-to-Drink (RTD) Tea Production
industry are expected to benefit.
Imports
To this end, imports are expected to fall at an annualized rate of 2.5% to $680.7 million over the five years to 2021,
despite growing demand for tea and improving economic conditions, such as rising disposable income. This is due
to the depreciation of the US dollar that made imports relatively more expensive to domestic customers. Canada
and Mexico account for an estimated 24.2% and 21.8%, respectively of industry imports due to their proximity and
favorable trade agreements with the United States. Moreover, a respective estimated 9.7% and 9.3% of imported
industry products come from Thailand and South Korea, which are countries known for tea production. Furthermore,
in 2021, imports are expected to satisfy 10.2% of domestic demand, representing a decline from 12.1% in 2016 as a
higher share of domestic demand is met by domestic production.
Exports
Conversely, exports are expected to benefit from a decline in the trade-weighted index (TWI), which decreased an
annualized 0.3% over the five years to 2021. Growth in the TWI indicates a depreciation of the US dollar against its
major trading partner, thus making domestically produced RTD teas to be at a price advantage in foreign markets.
Nevertheless, IBISWorld expects exports to decline marginally at an annualized rate of 0.7% to $716.8 million over
the five years to 2021. Canada is by far the largest recipient of US-produced RTD tea, receiving an anticipated
57.0% of exports. Vietnam, Mexico and Taiwan are the next largest markets for exports; however, they trail far
behind Canada. However, exports are also expected to recover over the next five years as the value of the US dollar
is expected to further weaken. In 2021, exports make up an estimated 10.7% of revenue.
20 IBISWorld.com
Business
Locations
The geographic distribution of establishments that primarily manufacture ready-to-drink (RTD) tea is aligned with both heavily
populated areas and warmer climates, as these characteristics will provide large customer bases for the RTD Tea Production
industry's products. Producers benefit from being located near customers both to reduce distribution costs and to stay plugged
into changes in consumer preferences.
Therefore, the Southeast region, which is generally both warm and heavily populated, is expected to account for the largest share
of industry establishments, at 19.2%, with establishments spread out fairly evenly throughout this region. The West accounts for
21.4% of the industry establishments, with California being the most densely populated with 14.1% of establishments. It is
becoming an increasingly popular area for producers because it is close to a large and growing market that benefits from a large
Mexican immigrant population. Additionally, California is relatively close to two of the largest exporters of tea leaves, China and
India. As a result, industry operators that establish a presence in California or in any state along the western coast of the United
States, benefit from lower supply and distribution costs. Due to the hot weather and growing population centers, the Southwest
holds 11.7% of establishments, most of which are located in Texas (8.6%) where Keurig Dr. Pepper is headquartered.
The Mid-Atlantic and Great Lakes regions are also common destinations for industry establishments, estimated to account for
18.1% and 15.0% of industry establishments, respectively. Furthermore, states such as New York (6.0% of establishments) and
21 IBISWorld.com
Pennsylvania (4.4%) are expected to be major destinations for industry operators, due to their dense populations and their
proximity to the industry's largest export destination, Canada.
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Competitive Landscape
Market Share
Concentration
Concentration in this industry is Medium
The Ready-to-Drink (RTD) Tea Production industry is expected to have a medium level of market share
concentration in 2021, with the top four major players accounting for over 40.0% of total industry revenue. The
industry is becoming more fragmented as new competitors enter the industry. In fact, over the five years to 2021, the
number of industry enterprises increased at an annualized rate of 13.6%, causing market share concentration to
decline over the same period. Another prevailing trend in this industry has been the growing prominence of merger
and acquisition activity. External competitors are expanding their product offerings and entering the industry by
acquiring smaller operators. For example, in 2018, Dr. Pepper Snapple Group completed its merger with Keurig
Green Mountain forming Keurig Dr. Pepper. Large operators benefit from economies of scale, which enable them to
spread their fixed costs among several facilities. Moreover, large operators are typically able to negotiate lower
prices with upstream suppliers because of the size of their orders.
Key Success IBISWorld identifies 250 Key Success Factors for a business. The most important for this industry are:
Factors
Strong distribution network:
Strong distribution networks enable tea producers to gain retailer shelf space and reach the maximum number of
customers.
Economies of scale:
Minimizing marginal and average production costs by producing large volumes will enable a company to sell at a
lower price and still maintain profitability.
Establishment of brand names:

Consumers typically purchase RTD tea from a narrow range of trusted brands. Ensuring that a company's brand is
part of this small group is vital to winning purchases.
Control of distribution arrangements:

Efficient and effective marketing channels are critical in this industry to minimize logistical costs and maximize sales
at retail sales.
Production of goods currently favored by the market:

Successful producers must respond to consumers' growing health concerns and shifting tastes by introducing new
products that satisfy their needs.
Aggressive marketing:
Due to the high level of competition in this industry, the leading competitors invest heavily in advertising and
promotions to drive demand for their products.
23 IBISWorld.com
Cost Structure
Benchmarks
Profit
Although RTD tea has significantly higher per-unit production costs

than tea bags or powdered iced tea mixes do, the convenience of RTD
tea enables producers to charge steep markups. These markups
render RTD tea generally higher margins than other tea products.
Moreover, many industry products carry valuable brand names and
premium labels, which further enable manufacturers to charge higher
prices. In 2021, profit (measured as earnings before interest and taxes)
is expected to account for 4.3% of revenue for an average industry
company, although margins will vary across the industry based on a
particular company's size, product offerings and purchase costs.
Nonetheless, industry profit margins have declined from 7.4% in 2016
as industry competition stiffened, inducing industry operators to
introduce frequent sales and promotion campaigns to gain more market
share, thus pressuring industry profit margins during the five-year
period.
Wages
Wages are estimated to comprise 8.6% of industry revenue in 2021. As

more consumers are demanding healthier and innovative flavor
varieties of teas, industry operators must invest in more skilled labor for
R&D. Thus, over the five years to 2021, wages have been growing
faster than revenue thereby raising wages' share of revenue. This trend
is expected to continue over the five years to 2026 as well.
24 IBISWorld.com
Purchases
Purchases are the single largest cost for RTD tea producers,
accounting for an anticipated 61.9% of annual industry revenue.
Industry operators must, at a minimum, purchase tea leaves, water and
containers. Many industry operators, however, must also purchase
flavors, sweeteners and preservatives to create their particular blends
of RTD tea. Specialized containers (e.g. bottles, cans) and labels
(including bottle caps, when applicable) represent further purchase
costs and can help companies in this competitive industry stand out
with distinctive branding. Moreover, as the push for eco-friendly
containers continues, operators must invest in recyclable and plant-
based bottles which can raise costs if they do not have contracts with
sustainable bottlers in place.
However, in 2020, while industry demand was not negatively affected

by the COVID-19 outbreak, the industry's supply chain experienced
some disruptions due to the lockdowns in some major tea exporting
countries. Consequently, some industry operators experienced
disruptions and fluctuations in the costs of raw inputs, including tea
leaves. Over the next five years, purchases are expected to decrease
as operators set up long-term contracts or buy inputs in bulk to hedge
any price fluctuations.
Marketing
An average RTD tea producer spends an estimated 1.1% of revenue

on marketing. The RTD tea market is highly competitive and companies
must stand out from their competitors to achieve maximum market
share. Marketing as a share of revenue has declined in recent years as
the industry's largest operators have benefited significantly from brand
loyalty.
Depreciation
Depreciation is estimated to account for another 2.4% of revenue for an

average industry company. Depreciable industry assets include
brewing and storage equipment. Canning, bottling equipment may also
represent significant depreciable capital costs, although some industry
operators may outsource these services if it is not cost-efficient for
them to package and label their products in-house.
25 IBISWorld.com
Rent
Rent expenses represent an expected 0.9% of revenue, as the facilities

needed to produce RTD tea must be large, efficient and sterile.
Utilities
Operators require electricity and energy among others to power

machinery needed to make industry products. As a result, utility
expenses are anticipated to account for 0.5% of industry revenue.
Other Costs
Other various industry costs include insurance; legal representation;

accounting services; delivery and warehouse expenses (for industry
operators that do not distribute their own products); and equipment
repairs and maintenance.
Basis of Competition in this industry is High and the trend is Increasing

Competition
INTERNAL COMPETITION
Operators in the Ready-to-Drink (RTD) Tea Production industry primarily

compete on price, quality and branding.
Fortunately for industry operators, tea can be produced at relatively low costs, so industry operators can pass the
savings on to customers in the form of lower prices. Large operators are able to do this more effectively, as they can
use economies of scale, distributing their fixed costs among other facilities. Moreover, large operators purchase
more supplies from upstream markets relative to small operators and are thus able to negotiate lower prices. Players
also compete on their ability to be innovative and differentiate a product/brand from its competition. Small operators
typically operate in a niche market within the industry, providing premium RTD tea. Moreover, small operators
typically charge higher prices to compensate for their larger cost structures.
26 IBISWorld.com
Developing and maintaining strong relationships with downstream suppliers is also a critical area of competition. The
ability to secure a grocery store and convenience store shelf space has conventionally set market leaders apart from
their competitors. Brands with the most recognizable products or packaging placed visibly at strategic locations have
the best chances of maximizing sales at the retail level.
EXTERNAL COMPETITION
The RTD Tea Production industry has numerous external competitors,

including the Soda Production industry (IBISWorld report 31211a), the
Bottled Water Production industry (31211b) and the Juice Production
industry (31211c), which also have RTD options.
Due to the wide range of RTD choices, the industry is heavily competitive. Fortunately for industry operators,
growing health trends have distinguished industry products from the competition. Increased health consciousness
has shifted consumer preferences to purchase healthier alternatives to soda, such as green tea. The industry also
experiences some external competition from imports. In 2021, imports are expected to satisfy an estimated 10.2% of
domestic demand. Furthermore, external competition is expected to grow as products such as bottled coconut water
and flavored waters become increasingly popular.
Barriers to Barriers to Entry in this industry are Medium and the trend is Increasing
Entry
The Ready-to-Drink (RTD) Tea industry has medium Barriers to Entry Checklist
barriers to entry. At a minimum, entrants must comply
with an array of regulations that ensure ingredient safety Competition High
and set standards for products designed for human
consumption. Federal and state oversight also regulates Concentration Medium
the manufacturing process, safety, labeling, recycling and
advertising and companies will have to spend capital and
Life Cycle Stage Growth
effort to ensure they comply with these standards.
The medium degree of concentration within the industry Technology Change Medium
presents a more significant barrier to entry. Major players
are large, with the top four commanding over 40.0% of the Regulation & Policy Medium
market. These major players can price competitively using
economies of scale and can even subsidize periods of Industry Assistance Low
loss because of their access to extensive financial
resources. In addition, they are best equipped to quickly
respond to changes in consumer taste by introducing new
products or mixing up their product line. Moreover, large
companies tend to have well-known, well-established
brand names. Potential entrants may, therefore, have a
hard time competing on either price or brand basis.
Nonetheless, despite a series of strategic acquisitions by
major players to protect market share, concentration has
declined over the past five years, benefiting potential
industry entrants.
New entrants may more effectively gain footing in a niche

market, where they can pour their resources and creativity
into the development of a specific RTD tea brand. Niche
markets are less price-sensitive, which enable entrants to
price high and break even quickly. Moreover, focusing on
a narrow brand helps the business avoid the extensive
research and development costs required to anticipate
and respond to taste shifts across a range of products. In
return, successful niche market entrants must offer a new
attribute, whether health-related or otherwise, which
distinguishes the product from those that cater to the
mass market. Niche market penetration may help
companies reap high-profit margin but will generally not
enable them to achieve high market share.
Industry Globalization in this industry is Medium and the trend is Increasing

Globalization
The Ready-to-Drink (RTD) Tea Production industry is moderately globalized as reflected by the levels of international
27 IBISWorld.com
trade and the presence of foreign operators. One of the industry's top players, Nestle and Unilever, are based in
Switzerland and the Netherlands, while also maintaining operations across the world. This trend will likely increase as
global demand for tea and healthy beverage options expand.
With the growing acceptance of tea-based beverages as a substitute for soda and other artificially flavored drinks,
industry operators are expected to expand into different countries to meet demand. However, demand for RTD tea
depends entirely on consumer preferences in each particular country. For example, tea-based beverages are becoming
increasingly popular domestically, driving demand in RTD tea production. In contrast, tea-based beverages have a higher
level of market acceptance in East Asian countries, such as China and Japan. To this end, industry operators are
expected to establish a presence in markets where tea-based beverages are still in the growth phase of their life cycle.
28 IBISWorld.com
Major Companies
Major Players Unilever
Market Share: 16.8%
Brand Names Lipton, Pure Leaf, Brisk
Originally founded in 1929, Unilever is a global consumer goods company that is publicly traded as Unilever NV in
the Netherlands and the United States and as Unilever PLC in England. Headquartered in Englewood Cliffs, NJ, the
company's US operations are divided into two business segments: foods and refreshment; and personal care.
Globally, the company employs more than 155,000 people. With more than 290 manufacturing facilities in 69
countries, the company generated total revenue of €50.7 billion in 2020.
The company's Ready-to-Drink (RTD) Tea Production industry-relevant segment is foods and refreshment, which
includes foods, beverages and ice creams. Unilever's tea brand, Lipton, produces a variety of tea products including
RTD tea, tea bags, tea concentrate and iced tea mixes. Pepsi Lipton, a 50-50 joint venture established in 2003
between Unilever and PepsiCo (Pepsi), has significantly benefited the Lipton brand over the years. Namely, Unilever
gained access to Pepsi's extensive bottling and distribution network while the addition of Lipton diversified Pepsi's
beverage portfolio, hedging the company against declining soda sales. The Pepsi Lipton partnership also manages
the Brisk and Pure Leaf RTD tea brands. At the end of 2017, Unilever acquired a premium tea brand, TAZO from
Starbucks for $384.0 million, further expanding its portfolio in the RTD tea industry.
Financial performance
Revenue for Unilever's industry-relevant revenue has been consistently growing over the five years to 2021.
However, as a Dutch company, Unilever reports revenue figures in euros and thus, US industry-specific revenue is
subject to exchange rates. The company has primarily benefited from the growing demand for healthier alternatives
to carbonated soft drinks, including RTD iced tea. Furthermore, healthier alternatives, such as diet varieties of Lipton
RTD tea and brand extensions have driven consumer loyalty for the brand. In 2018, Lipton launched two new iced
herbal tea flavors that do not contain added sweeteners, flavors or caffeine. The company's performance has
significantly benefited from the growing popularity of the premium brand, Pure Leaf. Therefore, Pure Leaf has
introduced a caffeine-free herbal line featuring hibiscus flavors in 2019 to capitalize on the increasing consumer
29 IBISWorld.com
interest in premium herbal teas.
Unilever is the world's largest tea company and purchases an estimated 10.0% of the world's black tea. In 2020, the
company's RTD tea offerings benefited from the increase in demand for teas overall. Further, the company sources
tea from its own tea estates, thus limiting supply disruptions and costs fluctuations, which benefit its bottom line.
Ultimately, IBISWorld expects industry-relevant revenue to increase at an annualized rate of 6.9% to $1.1 billion
over the five years to 2021.
Unilever NV (US industry-specific segment) - financial performance*

Revenue Growth Operating Income Growth
Year ($m) (% change) ($m) (% change)
2016 804.0 N/C 119.0 N/C
2017 864.4 7.5 142.5 19.7
2018 950.2 9.9 233.6 63.9
2019 894.0 -5.9 149.8 -35.9
2020 959.0 7.3 157.0 4.8
2021 1,121.1 16.9 207.4 32.1
Source: Annual report and IBISWorld
Note: *Estimates
Arizona Beverage Company
Market Share: 11.0%
Brand Names AriZona, AriZona Arnold Palmer
Originally established in 1971 as a beer distribution company named Ferolito, Vultaggio and Sons, the Arizona
Beverage Company (Arizona) has grown to become one of the leading producers of RTD tea in the United States.
The company began its beverage production in 1992. Headquartered in Woodbury, NY, the company also markets
its products in several different countries around the world. Aside from RTD tea products, the company also
produces a variety of RTD beverages including juice and tea blends, juice, carbonated soft drinks, water, sports
drinks and energy drinks. Finally, Arizona produces a variety of Arizona-branded teabags through a partnership with
tea producer, Bigelow Tea Company.
Arizona has focused on expanding its market reach within the United States through branding, product extensions
and low prices over the past five years. Especially, the company's standard 23-ounce can is pre-priced at $0.99,
appealing to consumers who seek affordable RTD beverages at various retail channels. The company has also
launched a range of product extensions in recent years, including single-serve tea boxes and the US Department of
Agriculture-certified organic teas. However, Arizona's most successful new product is Arnold Palmer, which consists
of iced tea and lemonade and is named after the famous US professional golfer. IBISWorld estimates that sales
from the company's Arnold Palmer line constitute just under 25.0% of company-wide sales.
Historically, the company has achieved organic growth by introducing new products and offering competitive prices.
Since the company does not raise its prices (facilitated by strong brand loyalty), it relies on moving large volumes of
goods to make up for the low-margin product. Overall, the company has experienced much success using this
strategy and remains one of the leading RTD tea producers, particularly in convenience stores. However, as per
capita disposable income in the United States has grown significantly, consumers have increasingly turned to other
brands that offer more premium and costlier RTD tea beverages. As a result, Arizona's industry-specific revenue is
anticipated to decrease at an annualized rate of 3.3% to $736.5 million over the five years to 2021. In 2019, to win
back its market share, the company has partnered with the Denver-based cannabis company, Dixie Brands Inc to
start producing weed-infused drinks, thus diversifying its product portfolio. Moreover, the company has collaborated
with Adidas to launch an exclusive limited-edition shoe collection, which is retailed at 99 cents. The shoes, which
featured Arizona's signature teal and cherry blossom designs, sold quickly and attracted a large crowd of buyers to
Adidas' store in New York City at the time of launching.
30 IBISWorld.com
Arizona Beverage Company (US industry-specific segment) - financial performance*

2016 871.0 N/C 96.7 N/C
2017 834.0 -4.2 90.0 -6.9
2018 708.6 -15.0 103.8 15.3
2019 696.8 -1.7 73.6 -29.1
2020 714.5 2.5 74.1 0.7
2021 736.5 3.1 83.9 13.2
Source: IBISWorld
Note: *Estimates
Coca-Cola Consolidated Inc.
Market Share: 9.8%
Founded in 1892, Coca-Cola Consolidated Inc. (Coca-Cola) is the world's leading producer of fountain and
packaged beverages. Headquartered in Atlanta, GA, the company owns or licenses more than 500 brands sold in
more than 200 countries. Coca-Cola sells its syrups, concentrates and beverage bases to Coca-Cola Consolidated
Inc., which produces, packages and distributes sparkling and still beverages. Coca-Cola Consolidated Inc. is the
largest independent bottler of Coca-Cola beverages in the United States. The company is headquartered in
Charlotte, NC and employs 15,800 employees. In fiscal 2020, the company generated $5.0 billion in total revenue.
Coca-Cola Consolidated Inc. segments its business into two main categories: bottle and can sales; and other sales.
The bottle and can sales segment includes products packaged in aluminum cans and plastic bottles. The other sales
segment includes sales to other Coca-Cola bottlers and post-mix products. The company participates in the RTD
Tea Production industry through its Peace Tea, Honest Tea, Gold Peak and Fuze Tea brands. In 2015, the
company acquired Peace Tea through the acquisition of Monster Beverage Company, increasing its market share in
the RTD Tea industry.
Over the five years to 2021, Coca-Cola's industry-specific revenue increased an annualized 8.6% to reach $658.0
million, driven primarily by the growth of Gold Peak Tea. In 2020, the company benefited from increased demand
from take-home channels, especially at the early stage of the coronavirus pandemic. The company's presence in the
RTD Tea Production industry has increased significantly during the period as the company's still beverages segment
has grown significantly due to organic growth, acquisitions and changes in consumer preferences. IBISWorld
estimates that per capita soft drink consumption decreased an annualized 0.7% over the five years to 2021, as
consumers are adopting healthier eating habits and avoiding sugary beverages. In addition, Coca-Cola is constantly
expanding brand value by adding new tea flavors and products. The company's Gold Peak Tea used to receive an
award for the best taste in the ChefsBest award. In 2018, Coca-Cola acquired Organic & Raw Trading Co., which is
best known for its kombucha tea brand, Mojo, which is expected to benefit the company in the years to come.
The Coca-Cola Consolidated Inc. (US industry-specific segment) - financial performance*

2016 435.3 N/C 18.2 N/C
2017 504.6 15.9 12.0 -34.1
2018 564.6 11.9 7.1 -40.8
2019 598.2 6.0 22.4 215.5
2020 629.9 5.3 39.4 75.9
2021 658.0 4.5 48.3 22.6
Note: *Estimates
31 IBISWorld.com
Keurig Dr Pepper Inc.
Market Share: 7.8%
Dr. Pepper Snapple Group Inc. (DPSG) and Keurig Green Mountain Inc. (Keurig) completed their merger in July
2018, forming Keurig Dr. Pepper (KDP), one of the largest manufacturers and distributors of nonalcoholic beverages
in North America. The newly formed company will maintain two headquarters in Burlington, MA and Plano, TX.
DPSG sells flavored carbonated soft drinks and noncarbonated beverages, including RTD teas, juices, juice drinks,
water and mixers. In fiscal 2020, the company generated annual revenue of $11.6 billion (latest data available).
DPSG's operations are segmented into four units which include beverage concentrates, packaged beverages, Latin
America beverages and coffee systems. The company employs about 27,000 people, 21,500 of whom are US-
based employees. In 2020, the company had 25 manufacturing facilities in the United States and six facilities in
foreign countries. Some of the company's most popular brands include Dr. Pepper, Canada Dry, 7Up and Mott's. In
addition to branded products, the company produces a variety of private-label beverages for retail customers and
distributes several third-party brands such as Evian, Vita Coco and Neuro. In 2018, the company conducted
acquisitions of a Texas-based energy beverage manufacturer, Big Red Group Holdings LLC and a premium
enhanced water company, Core Nutrition LLC for $300.0 million and $525.0 million, respectively.
The company is involved in this industry through its RTD tea brand, Snapple. There are a variety of beverages
produced under this brand, including regular and diet RTD teas and juices. DPSG significantly increased the
distribution of Snapple products in grocery stores over the past five years, helping drive sales of the brand, and have
helped the company expand its market share. In July 2020, the company purchased 66.4% of ownership in Revive,
which is a RTD kombucha brand, from Peet's Coffee, diversifying its beverage offerings.
Over the five years to 2021, KDP's industry-specific revenue is expected to fall at an annualized rate of 1.0% to
$525.0 million due to decline sales of the Snapple brand. To combat falling demand, in 2019, the company released
a limited edition of bottles paying tributes to New York. Specifically, the company revamped the looks of the best-
selling flavors at New York City's five boroughs, Long Island and New Jersey. The collection features Staten Island's
kiwi strawberry, Manhattan's peach tea, Brooklyn's lemon tea, Bronx's orangeade, Queens's apple, Long Island's
diet peach tea and New Jersey's fruit punch. Moreover, the company has added a new flavor called Diet Takes 2 To
Mango Tea to its diet collection, expanding its product portfolio. In the previous year, the company released a new
package made entirely of plastic for its 20 oz, 32 oz and 64 oz sized bottles, shifting away from its classic glass
bottles. According to Snapple, PET is the fastest growing packaging in RTD tea beverages as consumers
increasingly want lightweight and durable packaging to accommodate on-the-go lifestyles.
Keurig Dr. Pepper Inc. (US industry-specific segment) - financial performance*

2016 551.8 N/C 90.6 N/C
2017 457.9 -17.0 65.0 -28.3
2018 452.0 -1.3 22.3 -65.7
2019 463.4 2.5 70.9 217.9
2020 495.4 6.9 75.9 7.1
2021 525.0 6.0 83.6 10.1
Note: *Estimates
Other Companies Nestle SA
Market Share: 1.1%

Nestle SA (Nestle) is a Switzerland-based multinational company and one of the largest food manufacturers in the
world. The company produces a range of chocolate, confectionery, beverage, dairy and pet food products that are
sold in more than 190 countries. Nestle also employs about 273,000 people in 85 countries. The company's
32 IBISWorld.com
worldwide operations are organized into three geographic zones: Europe, Middle East and North Africa; Americas;
and Asia, Oceania and sub-Saharan Africa. In 2020, Nestle reported total revenue of 84.3 billion Swiss Francs
(CHF).
The company's products are divided into seven segments: powdered and liquid beverages; water; milk products and
ice cream; nutrition and health science; prepared dishes and cooking aids; confectionery; and pet care. The
company participates in the RTD Tea Production industry through its powdered and liquid beverage segment. In
addition to RTD tea, the powdered and liquid beverage segment includes bottled water, coffee, juice and RTD
chocolate milk. The company's leading RTD tea brand is Nestea, which is offered in a variety of flavors including
lemon, raspberry and green tea. In 2017, Nestle gave its Nestea brand a makeover to portray the brand as simpler
and more natural. In addition, the company reformulated Nestea products to no longer include high fructose corn
syrup and artificial ingredients or flavors. Most recently in 2019, the company has introduced a new product line
called "Nestea Flash Brewed" focusing on clean ingredients and innovative technologies that help preserve the
nutrients of the tea leaves.
Since Nestle is based in Switzerland, the company reports its annual financial data in CHF. The discussion that
follows is based on revenue in US dollars and, therefore, fluctuations in the exchange rate affect the financial
performance of this company. Over the past five years, Nestle has reformulated and updated the packaging for its
Nestea brand in hopes of appealing to a more health-conscious audience, however, these gains have not yet been
fully realized for the company. In 2017, Nestle and the Coca-Cola Company ended their joint partnership, which
included the Nestea brand, so that Nestle could develop Nestea independently. Overall, Nestle's industry-specific
revenue is anticipated to reach $71.3 million in 2021.
33 IBISWorld.com
Operating Conditions
Capital The level of capital intensity is Medium

Intensity
The Ready-to-Drink (RTD) Tea Production industry has a
high level of capital intensity. In 2021, the industry is
expected to spend $0.28 on capital for every dollar spent
on labor. Capital expenditure is required in this industry to
purchase and maintain machinery and equipment that
operators rely on to produce a high volume of ready-made
tea on a daily basis. Capital intensity has decreased over
the past five years but is anticipated to increase over the
next five years as industry operators will likely invest in new
machinery to optimize production processes to bolster
profit margin.
Rising health concerns and shifting consumer preferences

have sparked a trend for RTD teas to be fortified with
nutrients and have fewer calories (or less added sugars).
Thus, this industry remains labor-intensive, particularly
because industry operators must invest in high-wage
research and development personnel to develop innovative
flavors and package solutions to maintain a competitive
edge by consistently keeping new products on the market.
Producers have thus increased wages, at an annualized
rate of 6.1% over the five years to 2021 (faster than
revenue growth), for R&D and skilled laborers to formulate
new products.
Technology & Potential Disruptive Innovation: Factors Driving Threat of Change

Systems
34 IBISWorld.com
In many ways, operators in the RTD Tea Production industry have been a
disrupting factor themselves.
The production of industry products has cut into traditional demand for tea leaves and tea bags, as consumers can quickly
purchase and consume tea-products that are shelved in grocery and convenience stores. Beyond this, there have not been
any further disruption the industry has experienced from new forms of more convenient tea-based products.
The level of technology change is Medium
Operators in the Ready-to-Drink (RTD) Tea Production industry have a medium

level of technological change.
Industry operators use automated machines to process tea. Moreover, there are different processing methods used to
produce different types of tea. For example, to produce black tea, tea leaves typically undergo full oxidation, whereas green
and white tea is produced by significantly less oxidation.
The majority of change comes from the R&D of new tea formulas. Demand for new products and increasing consumer
health awareness have pushed beverage producers to innovate. For example, operators have made an effort to use natural
sweeteners, such as sugarcane and stevia, an extra sweet zero-calorie plant extract now used in many drinks.
Industry operators, such as the Coca-Cola Consolidated Inc has pledged to make all of its packaging 100.0% recyclable
and half of the packaging will be made using recycled materials by 2030. Furthermore, some industry operators are seeking
into using plant-based bottles, instead of petroleum-based bottles to further exhibit their commitment to the environment.
Industry operators are expected to increasingly use bottles that are more environmentally friendly and use significantly less
plastic in an effort to help the environment and differentiate their products. Additionally, consumers are typically drawn to
products that are perceived as ecofriendly. Nonetheless, many high-end iced tea brands are sold in glass bottles to better
preserve flavors. Glass bottles are also used for fermented teas such as kombucha.
Revenue The level of volatility is Low

Volatility
The Ready-to-Drink (RTD) Tea Production industry has a low level of volatility.
Popularity trends, marketing tactics and disposable income levels can all change from year to year, affecting volatility in
industry revenue. Due to the discretionary nature of packaged beverages, fluctuations in the price that producers charge
downstream markets can influence demand for industry goods. RTD tea has recently experienced a surge in popularity and
this growing demand further contributes to revenue volatility. According to the Tea Association of the USA, the introduction
of RTD tea has significantly increased the total number of retail outlets where tea is sold. This booming new market
(including convenience stores and cafeterias) has driven a rapid increase in demand for RTD tea in the past five years. At
the height of this trend in the current period, revenue increased as much as 5.2% in 2015, yet in 2019, revenue fell 2.7%.
Volatility is expected to remain stable over the next five years as the industry expands at a slower and steadier pace.
35 IBISWorld.com
Regulation & The level of regulation is Medium and the trend is Steady
Policy
FOOD SAFETY
The US Food and Drug Administration (FDA) is the chief regulator of ready-to-
drink (RTD) tea.
Similar to other foods, RTD tea must be processed, packaged, shipped and stored in a safe and sanitary manner.
Moreover, operators in the RTD Tea Production industry must adhere to regulations regarding labeling and provide all
nutritional information as per the Nutrition Labeling and Education Act (which amended the Federal Drug and Cosmetic
Act). Although labeling is an added expense for industry operators, it is beneficial in that it provides consumers with a
breakdown of the ingredients used. As a result, this gives consumers more transparency, which can increase demand
because it makes it easier for consumers to compare the ingredients of RTD tea beverages with unhealthier alternatives.
Additionally, this enables industry operators to promote antioxidant properties of tea, which is expected to also increase
demand.
ENVIRONMENTAL PROTECTIONS
The industry is also regulated by the Environmental Protection Agency (EPA).

The most significant laws affecting this industry are the Clean Water Act (CWA) and the Clean Air Act, both of which are
enforced by the EPA. Both regulate the manufacturing process and the industry's waste disposal. The CWA's increasingly
rigorous regulation for wastewater disposal is crucial to operators in the industry. Unless located in remote areas, most food
processing facilities pretreat and discharge wastewater directly to a publicly owned treatment plant. To do so, facilities are
required to obtain a National Pollutant Discharge Elimination System permit as mandated in the CWA when discharging
any waste to the environment.
COVID-19 SAFETY AND SICK LEAVE POLICIES
In response to COVID-19 (coronavirus), the Centers for Disease Control and

Prevention (CDC) released a series of guidelines for businesses, including
those in the RTD Tea Production industry, which are subject to change.
For example, employees who appear to have symptoms are to be separated from work, while employees that test positive
are required to inform fellow employees of their possible exposure. Businesses are encouraged to maintain extra
precautions for employees at higher risk for serious illness, such as older adults and those with chronic medical conditions.
Moreover, the CDC has advised employers to implement flexible sick leave and supportive policies and practices. Under
the Coronavirus Aid, Relief and Economic Security (CARES) Act, temporary paid sick leave benefits were enacted for many
workers not previously covered. However, the law includes exemptions for businesses with fewer than 50 or more than 500
employees. These regulations are expected to remain in place throughout the duration of the pandemic.
Industry The level of industry assistance is Low and the trend is Steady
Assistance
The Ready-to-Drink Tea Production industry receives very little direct financial
assistance from the government.
Imported nonalcoholic beverages (not including soft drinks, juice or water) incur a tariff of 0.200¢ per liter, making
domestically produced beverages more affordable than imported products. Additionally, industry operators receive indirect
assistance from trade associations. For instance, the American Beverage Association provides assistance for research and
development initiatives and acts as a liaison between manufacturers and the government. The Tea Association of the USA
also provides industry operators with assistance with regards to adhering to federal regulations and policies.
Moreover, magazines, such as Beverage Industry Magazine, also provide additional information regarding the tea industry.
The RTD Tea Production industry benefits from associations and trade publications because it provides consumers with
additional information regarding the health benefits of tea. Moreover, as media outlets increasingly depict soda as an
unhealthy beverage, demand for tea-based products is expected to increase.
COVID-19 and Paycheck Protection Program
In response to the emergence and consequences of coronavirus, the federal government has passed substantial legislation
to provide broad support for the economy. In March 2020, the federal government passed the Coronavirus Aid, Relief and
Economic Security (CARES) Act. The act consisted of a $2.2 trillion stimulus bill and included a number of programs aimed
at assisting businesses as they weather the effects of the coronavirus. There are several provisions in the bill that may
assist sector operators moving forward, ranging from an extended the deadline for payroll tax payments to the Paycheck
Protection Program (PPP) from the United States Small Business Administration (SBA). The PPP is primarily aimed at
36 IBISWorld.com
assisting smaller operators that employ fewer than 500 employees and have been affected by the coronavirus and
economic downturn, including cash strapped home health care operators. The program permits small businesses to take
out loans of up to $10.0 million for payroll costs, covering employees earning up to $100,000.00 annually. Furthermore, the
loans are eligible for being forgiven if the operator uses the loan for payroll, rent or utility costs.
The CARES Act included $350.0 billion in loans allocated to the Small Business Administration's (SBA) Paycheck
Protection Program (PPP), a small-business loan program aimed at keeping workers employed. However, the PPP was
quickly exhausted as demand outstripped available funds. In response, the US government passed additional legislation to
provide greater funding, an additional $484.0 billion bill to address the fallout of the coronavirus, including $380.0 billion in
PPP funding. In July, the federal government approved an additional five-week extension of the PPP program, running
through the beginning of August. In December, the federal government passed a $900.0 billion stimulus bill as part of a
larger appropriations package, which includes additional stimulus and sets aside an additional $285.0 billion for additional
loans under PPP, renewing the program created under the CARES Act.
In March 2021, the federal government passed the American Recovery Act (ARA), an additional $1.9 trillion dollar stimulus
measure that is expected to benefit broad swaths of the economy and impact industry operators. The ARA extends many of
the provisions of the PPP, in addition to state and local aid and direct payments to individuals, which are expected to
strengthen demand from the industry's downstream markets.
37 IBISWorld.com
Key Statistics
Industry Data
Domestic Per capita
Year ($m) ($m) (Units) (Units) (Units) ($m) ($m) ($m) ($m) income ($)
2012 6,441 949 188 173 6,481 498 500 408 6,443 39,782
2013 5,793 857 209 195 6,523 578 547 423 5,762 39,002
2014 5,832 874 213 200 6,448 683 589 407 5,738 40,308
2015 6,142 952 251 235 5,946 768 630 381 6,004 41,684
2016 6,340 1,043 274 257 6,482 742 771 428 6,369 42,208
2017 6,438 968 318 297 8,612 686 821 466 6,573 43,233
2018 6,497 969 397 366 8,724 635 735 507 6,596 44,552
2019 6,321 964 455 419 9,284 670 620 534 6,271 45,302
2020 6,565 1,002 490 454 9,734 665 719 559 6,618 47,768
2021 6,689 1,023 522 486 10,050 717 681 575 6,653 49,531
2022 6,676 1,033 550 516 10,217 728 664 583 6,612 48,558
2023 6,784 1,055 582 549 10,538 734 682 599 6,731 50,300
2024 6,895 1,078 614 583 10,858 752 686 616 6,829 52,110
2025 7,011 1,098 645 616 11,131 771 691 630 6,930 54,044
2026 7,128 1,119 671 642 11,388 790 695 644 7,033 56,056
Annual Change
Domestic Per capita
Year (%) (%) (%) (%) (%) (%) (%) (%) (%) income (%)
2012 5.65 6.73 3.29 2.97 15.4 39.6 32.6 15.7 5.34 2.58
2013 -10.1 -9.70 11.2 12.7 0.64 16.0 9.40 3.57 -10.6 -1.97
2014 0.68 1.92 1.91 2.56 -1.15 18.2 7.62 -3.70 -0.42 3.34
2015 5.30 8.97 17.8 17.5 -7.79 12.4 7.08 -6.44 4.64 3.41
2016 3.23 9.52 9.16 9.36 9.01 -3.40 22.3 12.3 6.08 1.25
2017 1.53 -7.13 16.1 15.6 32.9 -7.64 6.48 9.02 3.21 2.43
2018 0.91 0.03 24.8 23.2 1.30 -7.37 -10.5 8.86 0.35 3.04
2019 -2.71 -0.47 14.6 14.5 6.41 5.48 -15.7 5.22 -4.93 1.68
2020 3.85 3.92 7.69 8.35 4.84 -0.72 16.0 4.64 5.54 5.44
2021 1.89 2.12 6.53 7.04 3.24 7.78 -5.31 2.98 0.52 3.68
2022 -0.20 0.90 5.36 6.17 1.66 1.61 -2.43 1.28 -0.61 -1.97
2023 1.62 2.15 5.81 6.39 3.14 0.82 2.61 2.83 1.81 3.58
2024 1.63 2.21 5.49 6.19 3.03 2.43 0.64 2.75 1.45 3.59
2025 1.67 1.79 5.04 5.66 2.51 2.48 0.68 2.35 1.49 3.71
2026 1.67 1.92 4.03 4.22 2.30 2.49 0.66 2.17 1.48 3.72
Key Ratios
Imports/ Exports/ Revenue per Wages/ Employees per
IVA/Revenue Demand Revenue Employee Revenue estab.
Year (%) (%) (%) ($'000) (%) (Units) Average Wage ($)
2012 14.7 7.76 7.73 994 6.33 34.5 62,938
2013 14.8 9.49 9.98 888 7.29 31.2 64,771
2014 15.0 10.3 11.7 905 6.98 30.3 63,105
2015 15.5 10.5 12.5 1,033 6.20 23.7 64,026
2016 16.4 12.1 11.7 978 6.74 23.7 65,952
2017 15.0 12.5 10.6 748 7.24 27.1 54,122
2018 14.9 11.1 9.77 745 7.81 22.0 58,161
2019 15.3 9.88 10.6 681 8.45 20.4 57,508
2020 15.3 10.9 10.1 674 8.51 19.9 57,397
2021 15.3 10.2 10.7 666 8.60 19.3 57,254
2022 15.5 10.0 10.9 653 8.73 18.6 57,042
2023 15.5 10.1 10.8 644 8.83 18.1 56,870
2024 15.6 10.0 10.9 635 8.93 17.7 56,714
2025 15.7 9.97 11.0 630 8.99 17.3 56,626
2026 15.7 9.89 11.1 626 9.03 17.0 56,551
Figures are inflation adjusted to 2021
38 IBISWorld.com
Additional Resources
Additional Beverage Industry
Resources http://www.bevindustry.com
Tea Association of the USA Inc.

http://www.teausa.com
World Tea News

http://www.worldteanews.com
US Census Bureau
http://www.census.gov
US Department of Agriculture
http://www.usda.gov
Industry Jargon ANTIOXIDANT

A molecule that inhibits the oxidation of other molecules, widely believed to boost metabolism, fight cancer and have
other health benefits.
CARBONATED SOFT DRINK

A nonalcoholic beverage that contains carbonation and generally some form of sweetener or flavor.
FUNCTIONAL DRINK
A beverage that performs a function, including sports drinks that enhance athletic performance and energy drinks
that increase alertness.
ORGANIC
Organic foods use a limited amount of synthetic inputs, such as pesticides and chemical fertilizers.
RTD (READY-TO-DRINK)
A type of beverage that is prepared and packaged, ready for consumption.
WHOLESALE BYPASS
A popular trend within retail and manufacturing industries where producers supply goods directly to stores,
eliminating the middleman.
Glossary BARRIERS TO ENTRY

High barriers to entry mean that new companies struggle to enter an industry, while low barriers mean it is easy for
new companies to enter an industry.
CAPITAL INTENSITY
Compares the amount of money spent on capital (plant, machinery and equipment) with that spent on labor.
IBISWorld uses the ratio of depreciation to wages as a proxy for capital intensity. High capital intensity is more than
$0.333 of capital to $1 of labor; medium is $0.125 to $0.333 of capital to $1 of labor; low is less than $0.125 of
capital for every $1 of labor.
CONSTANT PRICES
The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using the current year (i.e.
year published) as the base year. This removes the impact of changes in the purchasing power of the dollar, leaving
only the "real" growth or decline in industry metrics. The inflation adjustments in IBISWorld’s reports are made using
the US Bureau of Economic Analysis’ implicit GDP price deflator.
DOMESTIC DEMAND
Spending on industry goods and services within the United States, regardless of their country of origin. It is derived
by adding imports to industry revenue, and then subtracting exports.
EMPLOYMENT
The number of permanent, part-time, temporary and seasonal employees, working proprietors, partners, managers
and executives within the industry.
ENTERPRISE
A division that is separately managed and keeps management accounts. Each enterprise consists of one or more
establishments that are under common ownership or control.
ESTABLISHMENT
39 IBISWorld.com
The smallest type of accounting unit within an enterprise, an establishment is a single physical location where
business is conducted or where services or industrial operations are performed. Multiple establishments under
common control make up an enterprise.
EXPORTS
Total value of industry goods and services sold by US companies to customers abroad.
IMPORTS
Total value of industry goods and services brought in from foreign countries to be sold in the United States.
INDUSTRY CONCENTRATION
An indicator of the dominance of the top four players in an industry. Concentration is considered high if the top
players account for more than 70% of industry revenue. Medium is 40% to 70% of industry revenue. Low is less
than 40%.
INDUSTRY REVENUE
The total sales of industry goods and services (exclusive of excise and sales tax); subsidies on production; all other
operating income from outside the firm (such as commission income, repair and service income, and rent, leasing
and hiring income); and capital work done by rental or lease. Receipts from interest royalties, dividends and the sale
of fixed tangible assets are excluded.
INDUSTRY VALUE ADDED (IVA)

The market value of goods and services produced by the industry minus the cost of goods and services used in
production. IVA is also described as the industry's contribution to GDP, or profit plus wages and depreciation.
INTERNATIONAL TRADE
The level of international trade is determined by ratios of exports to revenue and imports to domestic demand. For
exports/revenue: low is less than 5%, medium is 5% to 20%, and high is more than 20%. Imports/domestic demand:
low is less than 5%, medium is 5% to 35%, and high is more than 35%.
LIFE CYCLE
All industries go through periods of growth, maturity and decline. IBISWorld determines an industry's life cycle by
considering its growth rate (measured by IVA) compared with GDP; the growth rate of the number of establishments;
the amount of change the industry's products are undergoing; the rate of technological change; and the level of
customer acceptance of industry products and services.
NONEMPLOYING ESTABLISHMENT
Businesses with no paid employment or payroll, also known as nonemployers. These are mostly set up by self-
employed individuals.
PROFIT
IBISWorld uses earnings before interest and tax (EBIT) as an indicator of a company’s profitability. It is calculated as
revenue minus expenses, excluding interest and tax.
REGIONS
West | CA, NV, OR, WA, HI, AK
Great Lakes | OH, IN, IL, WI, MI
Mid-Atlantic | NY, NJ, PA, DE, MD
New England | ME, NH, VT, MA, CT, RI
Plains | MN, IA, MO, KS, NE, SD, ND
Rocky Mountains | CO, UT, WY, ID, MT
Southeast | VA, WV, KY, TN, AR, LA, MS, AL, GA, FL, SC, NC
Southwest | OK, TX, NM, AZ
VOLATILITY
The level of volatility is determined by averaging the absolute change in revenue in each of the past five years.
Volatility levels: very high is more than ±20%; high volatility is ±10% to ±20%; moderate volatility is ±3% to ±10%;
and low volatility is less than ±3%.
WAGES
The gross total wages and salaries of all employees in the industry.
40 IBISWorld.com
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INDUSTRY REPORT OD4297

RTD Tea Production

Thi Le | August 2021

IBISWorld.com 1-800-330-3772 info@IBISWorld.com

INDUSTRY AT A GLANCE................................ 7 MAJOR COMPANIES...................................... 29

About This Industry

Major Players Unilever

Arizona Beverage Company

The Coca-Cola Bottling Company United

Main Activities The primary activities of this industry are:

Producing ready-to-drink tea beverages

The major products and services in this industry are:

Green and white tea

RELATED INTERNATIONAL INDUSTRIES

$6.7bn 3.0% 0.1%

Annual Growth Annual Growth Annual Growth

$287.6m Industry Structure

Annual Growth Annual Growth Barriers to Entry Industry Globalization

 Tea has become a staple in US households; nonetheless,

 Most industry products have full market acceptance and are

 Greater consumer demand will bolster profitability for

Annual Growth Annual Growth Annual Growth

2016–2021 2021–2026 2016–2026

Products & Services Segmentation

Major Players SWOT

Growth Life Cycle Stage

Low & Steady Level of Assistance

High Revenue Growth (2016-2021)

Low Outlier Growth

Key External Per capita disposable income

Per capita tea consumption

Healthy eating index

Per capita soft drink consumption

Current The Ready-to-Drink (RTD) Tea Production industry manufactures brewed

HEALTH BENEFITS DRIVE GROWTH

Picking up on the overall consumer trend of embracing health

INNOVATION AND COMPETITION

Since major brands, such as Snapple, achieved success by initially

PROFIT AND TRADE

Tea has become a staple in US households; nonetheless, RTD tea is still a

Historical Performance Data

As per capita disposable income is expected to increase at an annualized

EXPANSION AND DEVELOPMENT

Performance Outlook Data

RTD teas are increasingly being introduced to new markets

Products & Markets

Supermarkets & Grocery Stores in the US Wholesale Trade in the US

Convenience Stores in the US Plastic Bottle Manufacturing in the US

Food Service Contractors in the US Snack Food Production in the US

Street Vendors in the US 2nd Tier

Grocery Wholesaling in the US Hay & Crop Farming in the US

2nd Tier Janitorial Services in the US

Consumers in the US Printing in the US

Products & Services

Black tea continues to dominate industry demand at an estimated 65.9%

GREEN AND WHITE TEA

This segment includes green and white tea at an anticipated 24.8% of

Herbal teas comprise an estimated 9.3% of industry revenue.

WAREHOUSE CLUBS AND SUPERSTORES

Other downstream retailers include warehouses and superstores.

GAS STATIONS AND CONVENIENCE STORES

Vending machines are forecast to be the fastest-growing market for the

International Trade Exports in this industry are Medium and Steady

Imports in this industry are Medium and Decreasing