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As we settle into fall and winter weather with crisp air and chilly temperatures, it's the perfect time to cozy up with a warm cup of tea, and the perfect time for retailers to optimize their tea aisle.
More than 87% of Millennials and more than four in five U.S. consumers are tea drinkers, according to the Tea Association of the U.S.A. We spoke with Hain Celestial, makers of Celestial Seasonings' Sleepytime Extra tea — the No. 1 wellness tea in multi-outlet (MULO) — for tea category insights and assortment tips to help independent grocers drive category growth this season.
What trends are you seeing in the tea category right now?
Wellness tea is a hot commodity, with growth outpacing the total specialty bag tea category. Consumers are (and are expected to continue) seeking health and wellness benefits, and the tea category is a natural fit. In fact, wellness bagged tea spending trends outperform the total tea category and specialty bagged tea segment. Shoppers spend an average of +3.7% more dollars when buying wellness bags compared to all other bags specialty tea.
What consumer behaviors are you seeing with wellness teas?
Our research shows that the majority of wellness tea consumers purchase one brand, and Celestial Seasonings is the No. 1 most preferred wellness tea with the highest dollar velocity on shelf. Shoppers are not switching brands very much when it comes to wellness teas. Only 8% of wellness tea purchases are shoppers switching from another brand, according to National Shopper Card data.
We also know that our wellness teas bring new users to the category due to its range of offerings and product benefits, and delivers the highest repeat rates, which reflect strong consumer product satisfaction. In other words, Celestial Seasonings Wellness teas drive consistent growth with the highest trial and repeat rates compared to the competition.
55% of households are exclusive to one brand, and 15.6% of shoppers who buy a single brand buy Celestial Seasonings Wellness tea. Source: National Shopper Card Data –ACI 26WE 1.28.23
What merchandising tips do you have for independent grocers, especially given how many tea brands and varieties are available?
Shoppers often experience confusion at the shelf due to duplication. Independent retailers have the opportunity to improve shopability and make room for innovation by not overstocking.
For example, the average grocery retailer carries 245 tea items, but the top 5% of items in the category contribute 80% of the volume. Independents can use the data to revise their selection to carry these top-selling teas, while reducing assortment duplication (i.e. carry one-two brands in these key tea flavors instead of multiple brands):
- Peppermint
- Earl grey
- Chamomile
- Matcha
- Sleep tea
We recommend limiting brand selection to avoid overwhelming the shopper. Choose the brand based on the data: for example, Celestial Seasonings buyers spend 5% more than buyers of other tea brands, with an average basket value of $128. Stocking Celestial Seasonings teas over another brand, like Bigelow, whose shoppers only have an average basket value of $120, would make your tea aisle a transaction builder based on this data.
For more information on curating the best assortment of teas for your store, work with your wholesaler or contact Hain Celestial directly here.
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