Ferolito, Vultaggio & Sons, maker of the Arizona RTD teas, is the leader in the United States RTD tea market, with an off-trade value share of 26% in 2012, down from 27% in 2011. The company has been able to maintain its lead in this category through product innovation and low prices. New products are introduced frequently to create excitement among consumers. Ferolito, Vultaggio & Sons benefited from the growth and innovation around its signature Arizona Arnold Palmer brand. In addition to the regular version, both the new reduced-calorie (Arnold Palmer Lite Half & Half with Splenda – a no-calorie sweetener) and green tea versions of the half-lemonade, half-iced tea blend have done well in the market. The majority of its RTD teas are sold for US$0.99, making it one of the cheapest single-serve soft drinks options in the beverage aisle.
Total volume sales of RTD tea grew by 4% to reach 4.5 billion litres in 2012, repeating the 4% growth achieved in 2011. Off-trade value sales of RTD tea grew by 7% to reach US$4.8 billion in 2012. The 7% value growth was higher than the 5% growth seen in 2011 and the 6% review period CAGR. While a maturing category, RTD tea sales benefited from its healthy positioning and the improvement in the US economy that allowed consumers to purchase these beverages.
Total volume sales of RTD teas are predicted to grow by 10% over the forecast period, reaching 5.0 billion litres in 2017. Some of the growth can be attributed to an increasing number of on-trade establishments providing RTD tea as a healthier alternative to carbonates. The diversity and innovation in RTD teas? new flavours, low-calorie, reduced-sugar, all-natural and organic products will continue to draw new consumers, as they seek better-for-you alternatives to high-calorie, high-sugar carbonates. Healthier substitutes to carbonates come as close to carbonates as possible as in Lipton?s diet sparkling green tea in strawberry kiwi flavour.
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