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COFFEE OR TEA?

Ready-to-drink coffees and teas have carved out a significant niche in the beverage aisle. According to Beverage Marketing Corp., iced teas are experiencing continued growth, and ready-to-drink coffees are up nearly 100%, due in large part to Frappuccino, the Starbucks/Pepsi venture product."Considering consumer concerns about caffeine, it's amazing how well these categories are doing," says LouAnn

Ready-to-drink coffees and teas have carved out a significant niche in the beverage aisle. According to Beverage Marketing Corp., iced teas are experiencing continued growth, and ready-to-drink coffees are up nearly 100%, due in large part to Frappuccino, the Starbucks/Pepsi venture product.

"Considering consumer concerns about caffeine, it's amazing how well these categories are doing," says LouAnn Wester, grocery buyer for Brookshire Grocery Company, Tyler, Texas. "Naturally, teas sell really well in this part of the country -- more so in the summer than in the winter -- but ready-to-drink teas are pretty popular year round for us. Snapple is a huge seller, and of course the new lines, such as SoBe, are starting to do well for us."

The grocery buyer has found that there is strong acceptance of the coffees as well. "We were pleasantly surprised at how well the ready-to-drink coffee lines have done," Wester reported. "We had not expected we would do such volume with those items. "The cappuccino cooler type of item is the most popular for us right now," she continued. "We see customers buying that as more than just a beverage. It also doubles as a dessert substitute for some people. They want something sweet, but not something that is too heavy. So they'll reach for a ready-to-drink coffee item."

Mark Miller, a beverage buyer for Safeway, headquartered in Pleasanton, Calif., concurred. "Frappuccino is selling incredibly well for us," he said, "Especially the French vanilla flavor. There are other lines available, but that seems to be the one that most customers gravitate toward."

Ready-to-drink teas, he said, can barely be kept on the shelf. "Iced teas are by far our most popular category right now," he noted. "The Snapple line has always done, and continues to do, extremely well. Other lines that have been popular are the Mistic teas, and SoBe and Arizona iced teas. It's a category that continues to grow for us, especially with the introduction of the herbal infused or enhanced iced tea lines."

David Thorpe, grocery manager of Food Markets Northwest, Seattle, sees a different trend in his store. "The Snapple line has really slowed down a lot for us," he observed. "Consumer interests have shifted over to brands that seem to offer more health benefits. Tea lines such as SoBe and Arizona iced teas have all picked up in our stores. Consumers are gravitating towards products with a more healthful bent."

Tazo tea is one of Thorpe's best sellers. According to the grocery buyer, he recently sold 140 cases in one month. Another item, Tejaba, a microbrewed tea made from handpicked tea leaves and brewed in small batches, has developed a following in his store, as has Jamaica Gold.

Although there was a significant drop in new product introductions in the ready-to-drink coffee and tea categories, year-to-date in 1998, according to Marketing Intelligence, Naples, N.Y., both categories continue to see sales growth. Herbal infused and enhanced iced teas are two of the innovations creating diversity and opportunity in the tea category.