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Tea in Capsules is Booming

America’s top five tea companies earned a combined $100 million selling tea in capsules last year.

Euromonitor International estimates global sales of tea capsules at $300 million.  Global market research firm IRi reports point of sale data for most of the teas sold in licensed K-Cups in grocery and department store. A precise total is unavailable as sales data for most capsules is mixed in with data on sales of teabags and loose leaf tea but $150 million is a conservative estimate as attendees will learn during the World Tea Expo presentation Single Cup: Tea in an Instant. Get an in-depth briefing on this dynamic new format by attending the session from 8-9:30 a.m. Thursday.


Market Research firm Packaged Facts estimates tea and capsules account for about 10% of total U.S. bagged and loose leaf sales. Sales from non-licensed brands, including Starbucks, are sufficiently large to depress sales of specialty tea according to Packaged Facts and an indication that tea formulators have achieved taste parity with tea sold in teabags.


“It is now possible to replicate existing product offerings and deliver an excellent cup,” said Manjiv Jayakumar, president of QTrade Tea & Herbs, a Cerritos, Calif. blender that has created tea formulas for Keurig compatible capsules used by several prominent tea vendors.
All of the conventional tea manufacturers including Lipton, Tetley and Twinings; the leading herbal manufacturer Celestial Seasoning; iced tea heavy weights like Snapple and specialty tea firms Bigelow Tea, STASH, Higgins & Burke and Harney & Sons now offer tea in capsules. Small chains like Capital Teas have their own lines and even International brands like Wissotzky Tea (Israel) are entering the market with teas in Keurig-compatible capsules.

Keurig Green Mountain’s own Café Escapes brand was the top selling tea in capsules last year recording $30 million in sales, according to IRi Infoscan Reviews for the 52 weeks ending March 22. The tally includes all multi-outlet grocery, drug and mass merchant retailers, gas stations and convenience stores. Sales of various blends of Celestial Seasons amounted to $23 million and Snapple Iced Tea rounded out the top three with $11 million in sales.
Teavana capsules for Starbuck’s Verismo brewers, tea capsules for the Caffitaly brewers distributed by Coffee Bean & Tea Leaf and the growing number of Nespresso single-serve brewers ­­­­­have convinced tea blenders like England’s Cornish Tea to fill popular European capsule formats.

Capsule sales online are significant with Amazon alone accounting for up to half of capsule sales. Coffee capsules are one of the most popular categories on Amazon where several brands are listed among the top 20 bestsellers in the Grocery & Gourmet category.

A breakthrough in capsule design announced last month will make the PurPod100 North America’s first fully compostable capsule, lid and filter. Waste from capsules, manufactured in the billions annually, has generated a backlash from consumers cleverly depicted in this Kill the K-Cup video depicting gigantic capsules destroying a city.
Club Coffee and the University of Guelph in Canada devised a way to make compostable plastic from coffee chaff (waste from the roasting process). The entirely compostable PurPod100 capsules will soon be certified compostable as municipal waste by the Biodegradable Products Institute.

Read More: Keurig compatible tea capsules packing machine


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