“Tea please,” he says smiling for the camera: Oi Ocha is the colloquial way of saying “tea please” in Japanese.

Though Oi Ocha celebrated its 20th anniversary in Japan last year, ITO EN (North America), the United States subsidiary of ITO EN, Ltd. (Tokyo, Japan), introduced the brand in mainstream markets in the US in 2008 to join its portfolio of premium RTD tea brands including Teas’ Tea, Teas’ Tea Naturally Sweet, Natural Fruit Teas and Ito En Shot, with the notion that the American palate has acquired a taste for an unsweetened, traditional-tasting green tea.

Over the past decade, the premium RTD green tea category has been developing in the US and ITO EN (North America), which set up shop in the DUMBO section of Brooklyn in 2001, has much to do with its progression. The company’s grass roots marketing efforts helped consumers discover green tea through its authentic brands that embody the company’s five principles—healthy, natural, safe, delicious and well-designed.

“In the span of 10 years, the RTD unsweetened tea category has gone from virtually nothing to the single largest tea
category in the US,” says Honjo. “The convenience factor of RTD appeals to a wider audience than just traditional tea, and over time, we began to see the American palate evolve and understand the distinct flavor of green tea. Today, consumers are knowledgeable on the intrinsic qualities of the tea leaf and are enjoying the beverage on its own without added flavors or sugar.”

And if pop culture is any indication of the knowledge or popularity of green tea, well, Honjo’s comments ring true.
Teas’ Tea, the company’s line of unsweetened flavored green teas designed specifically for the North American market in 2002, has been seen in the office of Ari Gold, played by Jeremy Piven, in HBO’s hit series Entourage.

In Ocean’s 13, the 2007 heist film, Eddie Izzard, who plays Roman Negal, the tech expert who creates the magnetron cell phone, requests green tea from his butler in an opening scene with Danny Ocean (George Clooney) and Rusty (Brad Pitt) by saying, “I’d like some sencha or genmaicha. And don’t burn it. Pour it just before boiling point, not after,” which speaks to the growth and education surrounding how to correctly prepare green tea.

The June 2009 edition of Everyday with Rachel Ray named ITO EN’s Oi Ocha the “Best Green Tea”—a recognition that paints a clear picture of just how far the premium RTD green tea category has come in the US.
“Rachel Ray is really representative of mainstream America,” says Rona Tison, senior vice president of corporate relations for ITO EN (North America). “For her team to have selected Oi Ocha was just the type of proof that, finally the palate was ready for a real authentic premium green tea.”

According to Beverage Marketing Corp. (BMC), RTD green tea is growing faster than black tea in the US. In 2008, green tea volume increased by 14.7 percent to 52.6 million cases and its share grew by 3.4 percentage points from 39.7 percent in 2007 to 43.1 percent in 2008.

“ITO EN has helped to pioneer the super-premium RTD tea category, which has developed over the last decade,” says Gary Hemphill, senior vice president of information services, BMC. “It’s a product that appeals to tea devotees because the focus is on the tea, not on sweeteners or other flavorings.”

In Japan, ITO EN is a recognized brand name with a rich history spanning 40-plus years. Daisuke Honjo, Yosuke’s older brother, took over as president of the company in May 2009; he succeeds his uncle, Hachiro Honjo, who is now the chairman, replacing his brother, Masanori Honjo, now deceased, father of Daisuke and Yosuke. Mansanori and Hachiro started the company from meager means in 1966 and later changed its name to ITO EN, Ltd. in 1969.

ITO EN helped to pioneer the category by being the first to package green tea in a can in 1985 after nearly a decade of research.

“While green tea was the most popular beverage in the Japanese home, it was never imagined that it could be packaged as an RTD beverage due to the technical difficulty and oxidation of green tea,” says Daisuke. “After years of research, ITO EN had a technological breakthrough and discovered the method to create the first RTD unsweetened green tea without oxidizing and maintaining its optimal taste profile. Since then, the Japanese market has embraced the convenience and mobility factor of the RTD green tea and is today ranked the third-largest in the Japanese RTD market.”

The canned product was named Oi Ocha in 1989 and later packaged in PET in 1996. Thanks to the brand’s success, ITO EN is the fourth-largest company in Japan and ranks 37th on Beverage World’s Global 100 list with $3.3 billion in annual sales for 2008.

After a difficult economic 2009 for the premium beverage market, Daisuke says that he follows these words of advice from his father in running the company: “Never become complacent. Always question what the customer may still not be satisfied with and continue to define their needs; have a ‘go positive’ attitude and remember to stay true to our legacy of products with a high standard of excellence.”

Moving West
In the US, ITO EN (North America’s) portfolio is available nationwide in natural and specialty stores and more mainstream retailers including Wegmans, Whole Foods, Target and Costco.

Getting there, however, didn’t come without its challenges. Yosuke shares that when the company first conducted its focus groups for its more traditional RTD unsweetened teas in 2000, the response was poor. To help bridge the gap from the sweet black teas US consumers are accustomed to and Teas’ Tea, the premium line of unsweetened green teas that it was offering, the company launched its Teas’ Tea Naturally Sweet line in 2008 in Citrus Black, Blueberry Green and Mango Oolong. The naturally sweet line is sweetened with 9 grams of cane sugar and has 40 calories per serving. The company also offers a line of Natural Fruit Teas, also sweetened with cane sugar.

“Americans were not accustomed to unsweetened green tea that tended to be slightly astringent in taste, a quality that is revered in Japan,” Yosuke says. “Realizing that there were many Americans who needed a bridge from sweetened to unsweetened teas, we see [Teas’ Tea Naturally Sweet] as training wheels for consumers to go completely unsweetened.”

As part of ITO EN (North America’s) branding efforts it launched a Tea Shop, ITO EN New York and KAI restaurant on Madison Avenue in New York City in 2002. (A second restaurant, Donguri, also in New York City, was acquired.)

“The Tea Shop,” says Yosuke, “was meant to introduce and educate the consumers on the different varietals of Japanese green tea and its tea culture. Learning to prepare a proper cup of green tea is important to enjoy its flavor and aromas.” Zagat Survey New York City Gourmet Shopping & Entertaining voted it Best Tea Shop in 2008.

“The restaurant KAI was inspired by the kaiseki cuisine that is accompanied by the traditional Japanese tea ceremony. We wanted to create a space that celebrated this tradition and the total experience of hospitality,” he adds.

The hands-on approach of ITO EN (North America) continues with integrated outreach at community and special events coupled with social media marketing tools such as Twitter and Facebook and consumer promotions as the company aims to build brand loyalty in the US, a market that represents a tremendous opportunity—only 2 percent of the company’s sales volume accounts for the market outside Japan.

Jim Hoagland, senior vice president of sales and general manager of the natural/specialty division for ITO EN (North America), says the company’s three major platforms for this year are to focus on getting Oi Ocha, Teas’ Tea and the trio of ITO EN Shots into the marketplace.

The company has noted success with its Sencha Shot and Oolong Shot, and is excited to introduce its Mate Shot this month in the US, he says. The 6.4-ounce shots packaged in cans offer the consumer a concentrated tea experience. “I like to describe it as a green tea espresso,” says Hoagland of the Sencha Shot. “One of the reasons we’ve been so successful with the shot line is because it’s a very clean, all natural product. If you look at the ingredients, it’s tea leaves, vitamin C and water. We’ve had a lot of success with the Sencha Shot and when we looked at the market, we saw that there was an opportunity with the mate as well.”

In addition to the RTD portfolio of ITO EN (North America), last year the company launched Teas’ Tea New York, a line extension to Teas’ Tea designed for the Japanese market. “That’s been a pretty big initiative and very successful in Japan,” says Hoagland. “As ITO EN (North America) we are very proud that we built [Teas’ Tea] here and seven years later it’s going back to Japan.”

So, while US consumers are practicing their pronunciation of Oi Ocha, the Japanese are well on their way to experiencing Teas’ Tea New York. Any way you look at it, it seems consumers on either side of the globe are saying, “Tea please.”

From Beverage World January 15, 2010