By Lindsey Goodwin 

Editor’s note: This is the first in a two-part series examining the changing beverage tastes of Americans and how they may affect the tea business.

To understand the changing tastes of American tea drinkers, we decided to start with the mainstream. And these days, bottled drinks are as mainstream as blue jeans and cell phones.

Ready-to-drink teas (RTDs) are the largest and fastest-growing segment of the U.S. tea market. According to “The State of the U.S. Tea Industry,” a report by Tea Association of the U.S.A. President Joseph Simrany, the RTD market hit $2.8 billion in 2007 and is estimated to grow at an annual rate of 12 to 15 percent.

As RTDs capture a larger share of the beverage market, they shape the palates of a new wave of tea drinkers. Today's RTD trends can give us a glimpse of what's on the horizon for hot tea.

Seth Goldman, TeaEO of Honest Tea, said, “The single biggest thing feeding RTD growth is that people are moving away from sodas.” The primary reason: high fructose corn syrup.

Goldman and Michelle Weisblatt, director of marketing for Sweet Leaf Tea, both said they are claiming the lion’s share of new customers from the waning soda market. Like Honest Tea, Sweet Leaf uses organic cane sugar instead of high fructose corn syrup.

Energy drinks are also suffering some perception problems that have benefited tea. Rona Tison, senior vice president of corporate relations for ITO EN, said the popularity of her company’s Sencha Shots is due to its “good-for-you energy drink feel without the horrible stuff in energy drinks.”

Add water to the list of waning drink superstars. According to Tison, most fans of the “clean” taste of ITO EN’s unsweetened lines are former bottled-water drinkers. She said the shift to RTDs occurred when “the bottled water market peaked and people needed a new (flavor) dimension.”

Today’s RTD trends

Sage Group’s 2004 edition of “The Specialty Tea Is ‘Hot’ Report” stated, “Unsweetened and lightly sweetened RTDs have been launched with modest, but stable success.” Since then, drinks like those in Honest Tea’s Tad Sweet line and ITO EN’s unsweetened lines have taken off, diversifying the market’s sugar levels.

ITO EN’s unsweetened teas are its strongest sellers, Tison said. “People are reaching out, looking for unsweetened drinks.”

Eric Swanson, category manager of the Southeastern natural foods chain Earth Fare Market & Café, concurred: “Much of our growth has been in … ‘pure tea’ products that are unsweetened.”

This doesn’t mean that people are tossing out the sweetened drinks altogether. Weisblatt stands by more traditional, sweetened RTDs, and noted that Starbucks and McDonalds have both recently debuted in-house sweet teas, indicating consumers’ desire for sugary drinks.

“The view is that as long as it’s sweetened with sugar (rather than high fructose corn syrup), it’s a healthier beverage,” she said.

Honest Tea fills the sugar gap with its Tad Sweet teas. Goldman described these as an “accessible” part of the “democratization of tea” that he feels is necessary for RTDs’ shift from natural chains into the mainstream.

Besides sweetener, flavors and the quality of the tea add other dimensions to the distinction of tea tastes.

According to “The Specialty Tea is ‘Hot’ Report,” Americans prefer their RTDs flavored, and tea writer James Norwood Pratt added that variations on flavors “can seemingly never be exhausted.”

As for current flavor preferences, Goldman said that Honest Tea’s flavors are increasingly those of “functional foods,” such as mangosteen and goji berries. He maintained that these are more than trends, citing the ongoing popularity of his Pomegranate Red Tea with Gogi Berry.

ITO EN’s TEAS’ TEA line includes unflavored teas, as well as rose-, mint- and jasmine-flavored varieties. Its Fruit Tea line encompasses the functional blueberry green, the traditional peach black and the quirky pear white.

Sweet Leaf has remained conservative with its flavors. As Weisblatt put it, “We use fruits people have heard of.”

As quality levels have increased, sources said, so has consumer sophistication.

Tison said, “We never thought we’d be selling the kinds of tea we’re selling now. People get introduced and then evolve … There are now many aficionados who started off very novice.”

Pratt added that now, “there’s actual tea in some bottles,” referring to higher leaf quality and better brewing technology at the source.

All this evolution in RTDs is shaping the way Americans choose their tea in general.

Tison and Goldman both pointed to the trend toward “pure, authentic tastes” as evidence that customer sophistication and, thus, tea quality will continue to rise.

“It’s an iterative process,” Weisblatt said. “Through RTDs, people get exposure to teas they may not have considered drinking before.”

Pratt concluded, “RTDs will give American consumers more choices in flavors and types of tea than ever before, and it’s hard to believe some of these won’t catch on.”