Our Take

Musings on the Foodservice Industry

You’re Invited to the Millennials’ Tea Party

What is hip, hot, cold, healthy, and very profitable and taking a run at the dominance of coffee as America’s beverage of choice? If you said tea, then you cheated and read the headline of this blog. 

Tea drinkers should not be pigeon-holed as health nuts or elderly ladies.  It may surprise you, considering the Starbucks® on every corner, that tea is rapidly becoming the drink of choice among Milliennials (those born between 1980 and 2000), that fickle, super-mobile demographic with enormous buying clout. 

Tea is nothing new on the American scene.  Why it is at the very core of our democracy if you recall the protest made about it prior to the Revolutionary War.  Central and Eastern Asians began taking tea from shrubs and small trees as far back as 5,000 years ago. It is grouped by various production and curing techniques, with six basic classifications: black, green, white, oolong, yellow, and post-fermented. Black tea is the most common tea used in America. 

Since 2000, tea consumption has risen by 20 percent driven primarily by the young generation, which enjoy it not teaonly as a refrigerated, ready-to-drink product, but also they are drawn to the fun, variety,  and experimentation of loose-leaf teas. There are dozens of types and styles from which to choose, which is attractive to the Millennials in search of the next healthy, gourmet food or beverage. Moreover, it provides another step away from sugar-laden carbonated soft drinks. 

For foodservice operators this is like being handed a wad of money on a silver platter.  They already have a cash cow in coffee and now there’s an even greater provider of sales and profit in tea.    

                     http://www.statista.com/chart/3277/younger-americans-are-ditching-coffee-for-tea/

While it depends upon the type and quality of tea you are serving, a foodservice operator can expect a hefty profit from a 12 oz. glass of iced tea. On average, a serving sold for $1.25 will net as much as $1.15 per cup. Not bad and that is why at a recent national restaurant show, there were more than 50 tea product exhibitors, showing off the value and profit in their products. 

Coffee is still the dominant drink of choice with Americans consuming 23 gallons per capita last year. A recent survey showed that when people under 30 were asked if they preferred coffee or tea, both proved equally popular, garnering 42 percent of the vote each. 

What we are seeing is a future in which tea will share a booth with coffee in driving foodservice beverage business.  That is why Starbucks® bought Teavana® and is opening Tea Bars and offers dozens of tea types on location and its website. 

Green tea, perceived to be the healthiest version, has been a big attraction for Millennials who are concerned with the health benefits of what they eat.  Worldwide, tea is the second most consumed beverage next to water by the way.  So America is just catching up. 

At one intrepid restaurant chain in Los Angeles called Hugo’s, the proprietor – a noted tea junkie – puts on tea tastings once a month to educate customers interested in learning more about tea.  He presides over a classic Chinese tea tasting and runs through the history of tea while pouring more than a dozen different styles.  

As this movement grows, foodservice operators must keep on top of the sweeteners they provide their customers.  In addition to a variety of pink, blue, green and yellow packaged artificial sweeteners, they should stock Agave and Maui Raws Turbinado sweetener products.  The latter two are especially attractive to Millennials for their natural sweetness. 

With all of that history coupled with all the new-fangled ways of selling and serving it, foodservice operators can relish in the fact that a new generation of tea drinkers will be walking through their doors.

So, it looks like we are all invited to the tea party. 

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