Diners skip the wine list as iced tea goes cool

NEW YORK (Reuters Life!) - Rather than pairing a filet mignon with a bottle of Cabernet, rising numbers of American diners are opting for a peach, mint or green iced tea with sales of iced tea, plain and exotic, surging nationwide.

Americans have become voracious consumers of iced tea with figures from market researcher the NPD Group showing 54 percent of the U.S. population drinks iced tea, up from 49 percent in 2002, with adults and children choosing tea over wine or soda.

Restaurants ranging from steakhouses and upscale eateries such as the Tribeca Grill in New York to fast-food chains like Dunkin' Donuts have picked up on this latest trend and are responding by increasing their selection of iced teas.

"Iced tea has taken on a new dimension," said John Crabtree, owner of Crabtree's Kittle House in Chappaqua, New York, an upscale restaurant where some diners are foregoing the 70,000 bottle wine cellar for one of 20 designer iced teas.

"As martini sales have gone down at business lunches, iced tea has gone up," said Crabtree, recalling a group of six doctors getting through three gallons at one sitting.

The Tribeca Grill, owned by actor Robert DeNiro, has responded to the growing trend by adding seasonal iced flavors, like its currently featured peach.

"More and more you're finding people that are looking for something non-alcoholic that's interesting," said bar manager Greg Ryan.

Since 2001, iced tea sales at U.S. restaurants has grown 12.5 percent to 4.5 billion servings, according to the NPD Group. NPD data also shows that sales of iced tea in quick service restaurants rose 8 percent to 2.3 billion servings in the year to April 2007.

HEALTHY BREW

McDonald's and Dunkin' Donuts have both jumped onto this trend, realizing that iced tea, once a regional favorite of the south, is fast becoming one of the nation's favorite drinks.

Dunkin' Donuts rolled out sweetened iced tea in three flavors -- original, peach, and raspberry -- as well as unsweetened tea in its northeast stores this month.

"Our industry data shows that iced tea is a fast-growing category and we felt that as a beverage leader, with over 50 years of brewing experience, we wanted to be at the forefront of this trend," said Scott Hudler, director of brand marketing for Dunkin' Donuts.

McDonald's added iced tea to its menu several years ago, but has since expanded its selection and availability.

Restaurateurs cite several causes for iced teas growth.

One is the decline in alcohol consumption during the day -- and also the fact that iced tea is low-cost and profitable.

"Iced tea appeals to all age groups, so your entire clientele is your audience," said Cassandra Mas, development chef for restaurant consultancy Quantified Marketing.

"Iced tea is very cost-effective to make so there is a great profit margin. It can also be made in-house."

Reports about the health benefits of tea, especially green tea and black teas, are also cited as a major influence.

Organic bottled tea brand Honest Tea has reported 65 percent compound growth since 1998 and is projecting 80 percent growth in 2007

"People are still looking for a little bit of caffeine, but are open to healthier alternatives to soda," said Honest Brands Chief Executive Seth Goldman.

But in the end iced tea may also just be in the right place at the right time.

One loyal iced drinker, New Yorker David Starr, who works in real estate, told Reuters: "I like iced tea because it's healthy and full of flavor. Soda is for kids and alcohol at lunch can sometimes get aggressive."