DRIVING GROWTH WITHPRIVATE LABEL TEA

Published October 2020 insights@mother-parkers.com

AS DEMAND FOR TEA RISES, PRIVATE LABEL TEA WILL INCREASE YOUR TEA CATEGORY GROWTH

• Private label tea is outpacing major beverage categories including juices and soft drinks

• Increasing specialty and herbal teas in your private label tea portfolio can deliver sales growth to your total tea category

• Broadening private label specialty tea reaches consumers seeking healthy options to add to their new at home routines

PRIVATE LABEL TEA IS OUTPACING MAJOR BEVERAGE CATEGORIES; WITH ROOM TO GROW

4.5%IN THE U.S.1

OF US CATEGORY USERS INDICATE THEY DRINK TEA BECAUSE IT IS MORE NUTRITIOUS THAN OTHER DRINKS1

PRIVATE LABEL TEA IS UNDERDEVELOPED WITH ONLY

7.4%$ SHARE OF THE TEA CATEGORY

TEA IS PERCEIVED AS A HEALTHY BEVERAGE WITH

24% TEA & INFUSIONS 5-YEAR CAGR EXPECTED TO GROW AT

-20% -15% -10% -5% 0% 5% 10%

PRIVATE LABEL COFFEE

PRIVATE LABEL FRUIT DRINKS…

PRIVATE LABEL SOFT DRINKS

PRIVATE LABEL TEA

PRIVATE LABEL RTD COFFEE

PRIVATE LABEL ENERGY…

PRIVATE LABEL SOFT DRINKS

5%

6%

2%

7%

-5%

-21%

-74%

Dollar % Sales vs. YA2

Source: 1Lightspeed/mintel; base 1,809 internet users aged 18+ who drink tea (May 2018)2AC Nielsen market track l52w period ending May 16, 2020

$18MM RETAIL SALES OPPORTUNITY1PRIVATE LABEL

EXPANSION OF HERBAL PRIVATE LABEL TEA SHARE TO MATCH BRANDED SHARE - EQUATES TO AN $18MM OPPORTUNITY1

HERBAL TEA IS GROWING

+59%AND HAS A CATEGORY DEVELOPMENT INDEX (CDI) OF 58% LEAVING ENORMOUS SPACE FOR EXPANSION2

1Assumption: pl tea is a $105mm business, growing herbal from 21% to 38% represents $18mm sales2 Source: AC Nielsen l12w pe may 23, 2020

Private Label Herbal Tea Branded Herbal Tea

38%

21%

$22MM

+17%

Private Label Black Tea flat in $ sales % change with 54% dollar share of the segment3

ASSORTMENT IS KEY – WITH BLACK TEA OVER DEVELOPED AND DECLINING IN PRIVATE LABEL, HERBAL OFFERS GROWTH

1 Mintel tea & RTD teas – us August 2019 important tea purchase factors 2Source: U&A study commissioned by people talking research, n=15433AC Nielsen market track l52w pe May 23, 2020

0%

10%

20%

30%

40%

50%

60%

Private Label Black Tea Branded Black Tea

$ sh

are

0.3%$ sales

% change3

TEA FLAVOR IS THE MOST CONSIDERED FACTOR WHEN PURCHSING TEA1

ENSURE TOP HERBAL BLENDS ARE AVAILABLE2:

1. CHAMOMILE2. PEACH3. LEMON4. PEPPERMINT5. RASP/STRAWBERRY6. APPLE CINNAMON

Tea Sizes By Dollar % Share2

PRIVATE LABEL TEA IS UNDERDEVELOPED IN SPECIALTY COUNTS WHICH DOMINATE HERBAL OFFERINGS

1 Assumption: pl <21ct tea is $37mm in l52w; growing +20% $ share equals $21mm or 1.7% sales growth in $104mm private label tea category2 AC Nielsen l52w period ending May 23, 2020

AN INCREASE OF PRIVATE LABEL SPECIALTY TEA $ SHARE FROM 36% TO 56% CAN DELIVER

+1.7%GROWTH TO YOUR TOTAL TEA CATEGORY1

65%36%

56%

27%42%

32%

8% 22% 12%

BRANDED PRIVATELABEL

*RECO*PRIVATELABEL

MIX ¢/ BagPrice

21-99ct

<21ctSpecialty

>100ctBulk 3¢

10¢

19¢

REDUCE >21CT / BULK TEA BY 20% AND INCREASE

SPECIALTY TEA BY +20%

WE PROVIDE THE INSIGHTS AND PRODUCT DEVELOPMENT EXPERTISE TO GROW YOUR SPECIALTY TEA PROGRAM

MONITOR MARKET FOR TRENDS & INSIGHTS TO DRIVE ASSORTMENT AND EXECUTION

CONSUMER INSIGHTS DRIVEN PRODUCT DEVELOPMENT

RELIABILITY OF QUALITY, SUPPLY & CONSISTENTCY

• Customized analysis leveraging Nielsen Technomic & custom research studies

• Bespoke model with full time tea blenders working with over 130 raw materials

• Dedicated tea & herbal buyers delivering 158 blends

• Strong relationships with exporters, co-ops and market knowledge at origin

insights@mother-parkers.com