USDA examines RTD tea opportunities in Mexico

The Foreign Agriculture Service at the USDA said Mexican RTD tea sales increased 29 per cent in 2008 to $118.5m, making it a fast growing but niche market.

Nevertheless, the report said that Mexico is the second largest market for RTD tea from the US, just behind Canada.

Growth drivers​

And as more brands and flavours are introduced, the USDA expects the category to continue to expand.

Improved distribution systems are being developed by major retailers for high-value imports and this is tipped to facilitate further growth. As better cold chain technology is part of this market evolution RTD tea is in line to benefit.

Despite these advantages the USDA said there are challenges ahead for international companies operating in the Mexican tea market.

Challenges ​

Its market report said Mexican consumers are varying their drink consumption and starting to turn to juices and flavoured waters that fit into the health and wellness trend.

RTD tea suppliers will have to adapt their offerings to meet the changing market.

The report said: “It is expected that companies will intensely promote their low sugar and light RTD tea to women and young adults who are concerned with their weight.”​

Less expensive fruit juices and flavoured waters are also expected to be a constraint on growth. The economic situation could also be a barrier.

The report said: “An extended sharp decline in the Mexican economy may affect sales of RTD tea because there are no economy brands of RTD tea on the market.”​

As tea drinkers tend are most likely to be middle income and affluent, continued growth in the Mexican economy is a prerequisite to significant long-term increases in RTD tea sales.