Menu Innovations | November 2011 | By Barney Wolf

Reading the Tea Leaves

Restaurants increasingly see profits brewing in both cold and hot teas.

For most American restaurants, tea had become something of an afterthought among nonalcoholic beverages.

Sure, tea is the world’s No. 2 beverage, second only to water. But as quick-service and fast-casual eateries focused on the expanding number of carbonated drinks and growing interest in coffee mixtures, tea was seen as a boring, necessary part of the menu.

These days, however, tea is hot, so to speak, and not just in teahouses. Restaurants’ tea sales have picked up briskly, especially as more units offer sweet tea, and traditional coffee houses are increasingly expanding their tea offerings.

“We’re seeing tea sales grow, and you can’t look past McDonald’s, or Subway, or any of the quick-service restaurants,” says Joe Simrany, president of the Tea Association of the USA Inc.

“They’re embracing tea like we haven’t seen in a long, long time.”

Consumers are “looking for more natural, more healthy alternatives,” and that is fueling the interest in different varieties and flavors of fresh brewed teas, he says. “People overdosed on carbonated soft drinks, and iced tea is benefiting from that.”

Almost all the tea sold in the U.S. is grown outside the country, and the Tea Association estimates tea imports grew more than 10 percent in 2010 over the previous year. Foodservice tea sales have been rising 3–5 percent annually in recent years.

More anecdotal evidence was the number of companies, nearly 50, exhibiting tea products at the annual National Restaurant Association Show in Chicago in May.

“People want an alternative beverage that is refreshing, with great taste, and that is healthy,” says Toby Tomblin, vice president and director of food innovations and ingredients at S&D Coffee Inc., which supplies restaurants with coffee and custom teas.

“Tea is a pretty natural product,” he adds, rich in antioxidants “with clean labels and a short ingredients list.”

In fact, tea accounted for 15.2 percent of restaurant beverage menu items during the fourth quarter of 2010, making it the third most-available type of nonalcoholic beverage at eateries, according to research firm Mintel.

The number of tea beverages offered at restaurants grew 11.2 percent from 2008 to 2010.

“Everyone’s trying to branch out beyond carbonated beverages,” says Kathy Hayden, foodservice analyst at Mintel. “Just as good coffee has become a requirement now for restaurants, operators are looking to do the same with tea.”

Tea provides an inexpensive alternative, she says, and “you can make a signature drink with just one flavor.”

Tomblin says flavors can be applied to the tea leaves before brewing or can be applied to the brewed tea afterward.

“You can get just about any flavor you want,” he says.

Consumption of tea, derived from certain shrubs and small trees in eastern and central Asia, dates back 5,000 years. 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 variety in North America, accounting for about 90 percent of all tea sales. The term comes from its color, which is the result of the leaves being fully oxidized. The tea became a popular trade item because it retains its flavor for years.

Green tea has grown in popularity in recent years because of its supposed health benefits, although the unwilted, unoxidized tea generally loses its flavor within a year.

White tea uses young leaves that are wilted and unoxidized, while yellow tea is unwilted and unoxidized, but with a slower drying phase than green tea. Oolong, which also is gaining in popularity, is wilted under strong sun and partially oxidized.

Similar to wine, different types of tea take their names from the districts where they’re grown, and each area is known for producing brews with a unique flavor and character.

By far, most tea consumed in the U.S. is the iced variety. Mintel research determined that 39 percent of restaurant-goers drink cold tea, about twice as many that have hot tea.

Additionally, a report by research and consulting firm Technomic Inc. found that 10 percent of restaurant consumers are drinking more iced tea than just two years ago, despite a 7 percent increase in prices during that same period.

For many years, quick-service tea didn’t always focus on quality, but that has been changing in recent years, as fresh-brewed tea, often made several times a day, became the norm.

Some fast feeders have their own blends of teas, while others use national brands. Subway, for instance, is using a fresh-brewed version of Coca Cola’s Fuze. Other quick serves and fast casuals offer bottled teas in refrigerated cases.

Technology has also helped bring better fresh-brewed iced tea to restaurants. One new idea is the Teafinity Brewmaster system developed by S&D Coffee.

Teafinity Brewmaster was one of the winners of the first Food & Beverage Product Innovations Awards showcased at the NRA Show.

The two-part system uses a liquid tea concentrate and a new dispensing system that delivers the look and taste of consistent, high-quality, fresh-brewed tea.

The flavor comes from real tea leaves and the brewing process is similar to steeping tea, Tomblin says. “It’s all about the correct amount of raw tea, the correct temperature of the water, and the correct dilution level.”

The resulting concentrate is packaged, placed into the machine, and mixed with fresh filtered water to create the final product. To customers, the Brewmaster looks like a typical tea dispenser.