RTD Teas Are Taking Off

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RTD Teas Are Taking Off

NEW YORK -- Teas are "white hot" in the marketplace as consumers begin to demand healthier beverage options, the Associated Press reported recently.

Christine Farkas, a Merrill Lynch analyst, said the $4 billion U.S. ready-to-drink tea market is surging, with annual growth in the double digits since 2004. In 2005, the global ready-to-drink beverage industry totaled an estimated $653 billion, of which the tea market was valued at about $25 billion, according to Farkas.

"The market has benefited from a number of factors including a consumer shift to healthy beverages, a desire for functional beverages (i.e. antioxidants), increased distribution of new and relevant brands, increased packaging sizes/options and accelerated innovation," Farkas wrote in an analyst's note.

"Ready-to-drink teas have become a terrific platform for flavor and functional innovation," she continued. "Consumers appear willing to try new blends, are interested in exotic sources and are willing to pay up for healthier options or quality."

According to the AP report, top players in the market include AriZona Beverage Co., a private company based in Florida; Purchase, N.Y.-based PepsiCo Inc., which markets Lipton and SoBe teas; Cadbury Schweppes plc of London, which markets Snapple teas; and Coca-Cola Co., Atlanta, which has the Nestea business. Leaders include AriZona and Pepsi, while Cadbury and Coke have lost market share.