How To Win With Private Brand Teas

The numbers keep coming in- private label and store brand teas continue to grow by captivating consumers with better quality, great taste, and improved value.

Private brands and store brand teas maintain their rise because of their ability to capitalize on:

Right Selection:
Successful private brands combine the best-in-class in flavor and function from across top-selling national brands

Right Fit:
Their tea brand maintains consistency with other branded product lines and meets customer expectations for quality and convenience (e.g. Organic, Fair Trade, Free-From, Non-GMO, etc.)

Right Value:
Whether your private brand is premium or discount-focused, the tea brand is competitively and attractively positioned

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Good Reasons For The Rise In Private Brand Teas

Store brand and private brand teas are on the rise for several good reasons:

1. American consumers have the spending power necessary to upgrade. Per-capita disposable income continues to rise, so higher quality and functional teas are becoming preferred over lower-grade, commodity-based teas.

2. The US tea market is nowhere near its full potential. When you look at the per-capita consumption levels across countries, there is plenty of room for many countries, including the US, to drink more tea. As it stands, about half of Americans drink tea on a daily basis, and an average of less than a cup a day. Each person in the US consumes about 0.5 pounds worth of tea each year, compared to Turkey (a famous coffee drinking culture) which consumes about 7 pounds of tea per person per year.

3. Americans are starting to prefer tea to coffee. Many consumers understand the health benefits related to tea drinking, and they seek the diversity of flavors and variety that teas offer. Millennials, now the largest age demographic in the US, make up 26% of all American households. The are as likely to order a tea as a cup of coffee. In fact, 87% of Millennials drink tea, but (as consumption levels indicate) they can certainly drink more.

The Advantages of Successful Private Brands

Depending on the setting, private and store brand teas face a range of helps and hindrances. The main settings showing private brand tea developments include:
– Grocery
– On-premise

Store brands are the most important area for the development of private tea brands. Some 80% of tea purchased is bought at the grocery store.

Store Brands: Grocery

Competition on a grocery shelf is direct and intense, but also allows for more direct comparison. The value claims and pricing are visible side-by-side, so a store brand tea can conveniently display its comparative value over national brands. Supermarkets with successful store brands in other product areas are in touch with shopper preferences that they can leverage multiple items. Their trusted products in other areas of the store give them an advantage in brand trust and familiarity. Their physical store presence in shopper’s communities can also be an advantage.

Private Brands: Coffee Shops

Coffee shops and other on-premise beverage providers with their own private brand see how their private brand tea creates the right fit across their tea and coffee selection. A selection of mediocre, and cheap old teabags look out of place beside single-origin, specialty coffees. This is an important fact when hot tea orders are on par with espresso and iced coffee orders across the country. The right selection of private brand teas enable coffee shops to offer specialty tea beverages and attract customers during dayparts when coffee is less popular and tea is a better fit.

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