Functional benefits and new flavors are adding new options to the ready-to-drink tea category.

After water, tea is the most widely consumed beverage in the world, with almost all users other than Americans drinking the beverage hot. Iced tea is considered a U.S. phenomenon and one that has been growing in popularity since the debut of Snapple in 1980.

Retail dollar sales of ready-to-drink (R.-T.-D.) tea have slowed this past year compared to the double-digit growth of the past decade, according to “Tea and ready-to-drink tea in the U.S, 5th edition” from the market research firm Packaged Facts, Rockville, Md. Further, Packaged Facts projects retail dollar sales growth will be nominal in the next five years, with most activity coming from the convenience channel. The report suggests there’s a great deal of opportunity for iced tea in the food service category for freshley brewed and fountain offerings, as well as R.-T.-D. options.

One obstacle to further growth of the category is tea consumption skews female, a point driven home by tea’s association as healthy and even dainty, e.g., floral tea cups, tea rooms, etc.

“But the flipside is that plenty of opportunity exists to make tea drinking a bit more manly,” said David Sprinkle, research director at Packaged Facts. “Brand acceptance by gender provides evidence that men are looking for more masculine tea products. AriZona and Nestea are the only brands that seem to resonate as much with men as they do with women. AriZona has surely benefitted from its association with golf legend Arnold Palmer, but its packaging — with checkerboard design and bold colors — also skews toward the more masculine.

“There’s more marketers can do to drive tea’s appeal among the male demographic. At present many marketers have developed products specifically suited for women; for example, Yogi Tea offers a full line of Woman’s Tea formulated to help support the female system. There’s opportunity to market tea to men in the form of functional benefits such as energy, virility and stress-relief.”

Though new Uncle Si’s Iced Tea makes no such functional promises, its licensed affiliation is bound to appeal to men.

“It’s the only tea to carry the name of Duck Commander and America’s beloved Si Robertson,” said Joe Ragazzo, vice-president of sales at Chinook USA, Prospect, Ky., licensees of beverages for Duck Commander, West Monroe, La. “It’s based on the Robertson family’s brewed-to-perfection family recipe. TV viewers often see Si drinking tea out of his blue Tupperware cup that his mom sent to him while serving in the Army.”

Chinook sources a blend of tea leaves from S&D Coffee & Tea, Concord, N.C., to duplicate the recipe.

“The premium tea leaves are gently brewed by simply applying heated water and steeping them the old-fashioned way,” Mr. Ragazzo said.

Uncle Si’s Iced Tea comes in R.-T.-D. 16-oz single-serve plastic bottles. There’s also a fresh-brewed version for food service. The shelf-stable bottled teas come in four varieties, with one being unsweetened. The three cane sugar-sweetened versions are Half & Half (half iced tea/half lemonade), peach tea and sweet tea.

A functional foundation

Regarding functional ingredients, R.-T.-D. brewed teas are inherently functional beverages due to abundant catechins intrinsic to tea leaves. Marketers are starting to build on tea’s health value through the addition of additional nutrients.

For example, Titan Tea, New York, is introducing a namesake beverage designed for active people.

“I have always loved brewed tea,” said John Gagliardi, company founder and former Team USA lacrosse player. “In fact, I grew up drinking very sweet freshly brewed tea. As I got older, I reduced my consumption of refined sugar.”

He learned that properly brewed tea may taste great without a lot of added sugar.

“As a professional athlete, I was looking for something healthy that would help me hydrate before practice, stay energized when training and refuel after a hard game, but without being full of sugar or artificial ingredients,” Mr. Gagliardi said. “When I noticed that my energy levels were unusually low, I went to a nutritionist and found out I was deficient in ribose. I began supplementing twice daily to regain my energy levels and it worked.”

Ribose, an organic compound naturally produced by the human body, supplies energy to cells and aids in the recovery of muscles. When Mr. Gagliardi set out to develop a better-for-you brewed tea, he wanted ribose to be a part of the formulation.

Sourcing organic Fair Trade tea from Sri Lanka, Mr. Gagliardi works with a co-packer who steeps the leaves for 12 hours, a brewing process he believes produces the best-tasting tea. The tea then is infused with electrolytes, ribose and caffeine for sustained energy. The combination of ingredients provides the benefits of drinking a sports hydration drink with the flavor of a cold-brewed tea.

Lightly sweetened with organic cane sugar to keep calories low, Titan Tea comes in four flavors: lemon black tea, peach green tea, pomegranate green tea and raspberry black tea.

Targeting a specific demographic presents an opportunity to grow the category.

“Today’s consumers expect a greater degree of customization in any product they buy and beverage choices are no exception,” Mr. Sprinkle of Packaged Facts said. “This has led to personalization not being just a trend, but an expectation. To that end, tea marketers must be actively looking for avenues to personalize tea drinking.”

This is true in both R.-T.-D. and food service offerings.

Zone 8 Beverages, Oakbrook Terrace, Ill., markets a namesake tea designed to appeal to the millennial demographic, which may include an ethnically diverse network of friends, who are native label readers and who are better educated about food and its importance to good health, according to the company.

“The current beverage market lacks brands addressing cultural relevance that appeal to customers in an authentic way,” said Tim Megenbier, president and co-founder. “We see this as an opportunity to engage with consumers and provide a connection for them as individuals and as a diverse group. Consumers can now experience flavors of the world and they can share and relate to the authentic flavor profiles that we are bringing to market.”

The line comes in four varieties: Agua de Jamaica Hibiscus Tea, Black Tea, Honey Lemon Tea and Red Rooibos Pomegranate. Packaged in 16.9-oz plastic bottles, the teas contain zero to 88 calories.

On the food service side, Bee & Tea, Chicago, is on a mission to make boba tea a mainstream treat. Boba tea, a traditional Taiwanese beverage, is made with a milk-tea base and personalized with topping, flavor and sweetener options, much like the coffee drinks ordered at Starbucks. Toppings include honey tapioca boba, agar-agar, fruit-flavored bursting boba and flavored jellies. The company’s specialty bubbles sink to the bottom of each drink, getting picked up through a fat straw.

Other ways to differentiate

In efforts to create a point of differentiation in the R.-T.-D. tea category, AriZona Beverage USA, Woodbury, N.Y., is rolling out AriZona Oak Reserve, the first tea steeped with oak chips, according to the company. It comes in three flavors: unsweetened, lightly sweetened and lemon.

As part of a revamp, Honest Tea, Bethesda, Md., a division of The Coca Cola Co., Atlanta, is using Fair Trade Certified organic sugar in its sweetened tea varieties. The move coincides with a packaging redesign with the new label touting the company’s pledge of “1% for the Planet.”

The company also is introducing a new variety — raspberry tea — a Fair Trade Certified organic black tea from southern India. It is made with organic raspberry juice, blackberry leaves and sweetened with cane sugar.

Suja Juice Co., San Diego, recently launched a line of cold-brewed, organic, non-GMO Project Verified and cold-pressured teas. Cold pressure, also known as high-pressure processing, retains food quality, maintains freshness and extends microbiological shelf life without heating to high temperatures.

The range includes Chunmee Tropical, a blend of chunmee green tea and the tropical flavors of pineapple, mango and lime, and sweetened with honey and coconut palm sugar. Honeybush Peach features honeybush and tulsi teas with peach and honey. Jasmine Pomegranate blends jasmine tea with lemon, pomegranate, tamarind and honey.

The final variety is Unsweetened Biodynamic Black, which is a blend of Nilgiri, Darjeeling and Assam teas. It is Demeter Certified Biodynamic, which is a certification for biodynamic agriculture.

In/Fusion is a beverage created in 2012 by the In/Fusion Co. of Paris, and is now being imported into the United States by Brands Within Reach, Mamaroneck, N.Y. The beverages blend fruit juices with herbal teas for a caffeine-free, no-added-sugar aseptically packaged drink that comes in two varieties: Peach-Vervain-Lemon and Pomegranate-Blackcurrant-Blackcurrant Leaf-Peppermint.

Talking Rain Beverage Co., Seattle, is growing its zero-calorie iced tea line with Sparkling Ice Tea. This lightly carbonated blend of brewed black tea, green tea and fruit juice is unlike any other R.-T.-D. tea in the marketplace.

“Consumers are searching for refreshing beverage alternatives, and we noticed a largely untapped and growing category, which presented Sparkling Ice beverages with the opportunity to deliver a line of zero calorie sparkling teas,” said Kevin Klock, president and chief executive officer.

Indeed, there are many opportunities in the R.-T.-D. tea category. It will be these innovations that grow the category.