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Tea and Other Hot Drinks - UK - July 2014

Published By :

Mintel

Published Date : Jul 2014

Category :

Beverages

No. of Pages : 172 Pages


Higher-caffeine teas could help brands increase usage by positioning the drink as an energy-boosting alternative to coffee while in hot chocolate, new formats would provide a platform for trading drinkers up.
Table of Content

Introduction

Definition
Excluded
Abbreviations

Executive Summary

The market
The future
Figure 1: UK retail value sales and forecast for the tea*, hot chocolate and hot malted drinks market, 2009-19
Market factors
Tea consumption is in long-term decline
Climate change could negatively impact tea yields
Slower growth of the 15-34 age group could limit tea’s growth
Companies, brands and innovation
Unilever holds over a quarter of the UK retail tea market by value
Figure 2: Estimated manufacturer shares in the UK retail tea market, by value, 2013/14*
Own-label’s share of NPD reaches a four-year high
Adspend falls for a second year
The consumer
Four in five Brits drink tea
Figure 3: Consumption of tea, hot chocolate and hot malted drinks, April/May 2014
A well-known brand is the most important factor in tea drinkers’ choice
Figure 4: Factors considered when buying tea, April/May 2014
Tea is seen as a good option to curb hunger between meals
Figure 5: Attitudes towards tea, April/May 2014
Smaller teabags interest a quarter of users
Figure 6: Attitudes towards teabags, April/May 2014
New flavours of malted drinks interest a third of users
Figure 7: Attitudes towards hot chocolate and malted drinks, April/May 2014
What we think

Issues and Insights

Higher-caffeine tea has scope to compete with coffee
The facts
The implications
Black tea with added health benefits appeals to half of tea drinkers
The facts
The implications
New hot chocolate formats should add value to the category
The facts
The implications

Trend Application

Extend My Brand
Help Me Help Myself
Minimize Me

Market Drivers
\'
Key points
Tea consumption is in long-term decline
Figure 8: UK household purchases of coffee and tea, 1974-2012
Climate change threatens long-term production in tea-producing regions
Tea brands should do more to position tea as an alternative to alcohol
Figure 9: Trends in UK per capita consumption of 100% alcohol, 2000-13
Slower growth of the 15-34 age group could affect growth of tea
Figure 10: Trends in the age structure of the UK population, 2009-14 and 2014-19
Warm weather in 2013 puts pressure on tea sales
Figure 11: Hours of sunshine in the UK, by month, 2008-14

Strengths and Weaknesses

Strengths
Weaknesses

Who’s Innovating?

Key points
Teabags accounted for nine in 10 new launches in the tea category in 2013
Figure 12: New product launches in the UK tea market, by format type, 2010-13
Own-label accounts for two in five new launches in 2013
Figure 13: NPD in the UK tea market, by own-label and brands, 2010-13
Figure 14: New product launches in the UK tea market, by top 10 ultimate companies, 2010-13
Ethical claims continue to gain ground
Figure 15: New product launches in the UK tea market, by top 10 claims, 2010-13
Strong growth in caffeine-free and premium variants
Flavoured teas gain share in new launches
Figure 16: New product launches in the UK tea market, by top 10 flavour components, 2010-13
Functional claims feature on minority of launches
New formats and ones to watch
Matcha tea
Teabags for cold water
Tea pods/sticks
Brands accounted for four in five new launches in hot chocolate and malted drinks in 2013
Figure 17: New product launches in the UK malt and other hot beverages market, by top 10 ultimate companies, 2010-13
Manufacturers look to liquids to make mixing teas and hot chocolates easier and quicker
Hot chocolate takes cues from the chocolate confectionery market with ‘additions’

Market Size and Forecast

Key points
Value growth expected to accelerate while volume decreases should ease
Figure 18: UK retail sales value and volumes for the tea*, hot chocolate and hot malted drinks market, 2009-19
Figure 19: UK retail value sales and forecast for the tea*, hot chocolate and hot malted drinks market, 2009-19
Tea value sales will grow with volumes set to post a sluggish performance
Figure 20: UK retail value and volume sales of tea*, 2009-19
Figure 21: UK retail value sales and forecast for tea*, 2009-19
Hot chocolate and malted drinks volumes to fall whilst value remains flat
Figure 22: UK retail value and volume sales for the hot chocolate and hot malted drinks market, 2009-19
Figure 23: UK retail value sales and forecast for the hot chocolate and hot malted drinks market, 2009-19
Methodology

Segment Performance

Key points
Ordinary teabags continue to decline while green, fruit and herbal rocket
Figure 24: UK retail value sales of tea, by segment, 2011-13
Figure 25: UK retail volume sales of tea, by segment, 2011-13
Ordinary teabags struggle
Strong growth in other segments
Hot chocolate leaps ahead while malted drinks continue their decline
Figure 26: UK retail value sales of hot chocolate and hot malted drinks, by segment, 2011-13
Figure 27: UK retail volume sales of hot chocolate and hot malted drinks, by sector, 2011-13

Market Share

Key points
Unilever accounts for over a quarter of UK tea sales
Figure 28: Top five manufacturers’ sales and shares in the UK tea market, by value and volume, 2012/13 and 2013/14
PG Tips leads the market but Twinings sees fastest value growth
Figure 29: Top five brands’ sales and shares in the UK tea market, by value and volume, 2012/13 and 2013/14
Cadbury brands dominate the hot chocolate market
Figure 30: Top five brands’ sales and shares in the UK hot chocolate market, by value and volume, 2012/13 and 2013/14
Malted drinks sector sees market decline
Figure 31: Leading brands’ sales and shares in the UK malted drinks market, by value and volume, 2012/13 and 2013/14

Companies and Products

Apeejay (Typhoo)
Background
Product range
Product innovation
Advertising and promotion
Associated British Foods (Twinings, Options, Ovaltine)
Background
Product range
Product Innovation
Advertising and promotion
GlaxoSmithKline (Horlicks)
Background
Product range
Product innovation, advertising and promotion
Mondelez International (Cadbury)
Background
Product range
Product innovation, advertising and promotion
Taylors of Harrogate (Yorkshire Tea)
Background
Product range
Product innovation
Advertising and promotion
Tata Global Beverages (Tetley)
Background
Product range
Product innovation
Product advertising and promotion
Unilever (PG Tips, Lipton)
Background
Product range
Product innovation
Advertising and promotion

Brand Communication and Promotion

Key points
Adspend falls below £20 million after second consecutive year of decline
Figure 32: Main monitored media advertising expenditure in the UK tea and hot drinks market, 2010-14
Taylors of Harrogate overtakes Unilever for highest adspend in 2013
Figure 33: Main monitored advertising expenditure in the UK tea and hot drinks market, by top five advertisers, 2010-14
Twinings aims to corner premium and mainstream sectors
Figure 34: Main monitored advertising expenditure in the UK tea and hot beverages market (excluding coffee), by top five brands, 2013
TV adspend falls while outdoor gains
Figure 35: Main monitored advertising expenditure in the UK tea and hot drinks market, by media type, 2010-14
Brands also look for visibility on social media

Channels to Market

Key points
Supermarkets account for two thirds of sales of soft drinks
Figure 36: Estimated consumer spending on soft drinks (including tea and other hot drinks), by type of retailer, 2013
Specialists work hard to carve out a point of difference in the market
Various brands look online

The Consumer – Frequency of Usage

Key points
Five in every six consumers drink tea
Figure 37: Consumption of tea, hot chocolate and hot malted drinks, April/May 2014
Standard tea leads by usage
Fruit and herbal teas chime with women
Indulgent image limits hot chocolate usage
Figure 38: Frequency of consumption of tea, hot chocolate and malted drinks, April/May 2014
Figure 39: Repertoire of usage of tea, April/May 2014

The Consumer – Factors Considered when Buying Tea

Key points
A well-known brand is the most widely noted as important in tea choice
Figure 40: Factors considered when buying tea, April/May 2014
Younger cohorts are less interested in brands
More users consider low prices important than price promotions
Less than one in five users see ethics as important when buying tea
A fifth of users see a clear regional British heritage as important in tea
Brands rebrand to tap into regional interest

The Consumer – Attitudes Towards Tea

Key points
Tea is widely seen as a good option to curb hunger between meals
Figure 41: Attitudes towards tea, April/May 2014
Tea is deemed a good alternative to alcohol on a night in
Other markets can offer inspiration for marketing
Links with chocolate can support treat proposition
Flavours tailored for the seasons interest over a third of tea users
Packaging can highlight seasonal positioning
Tea pods spark interest among a third of tea users

The Consumer – Attitudes Towards Teabags

Key points
Smaller teabags interest a quarter of standard tea users
Figure 42: Attitudes towards teabags, April/May 2014
Liquid tea concentrates interest one in seven
One in 10 would pay more for teabags made from a better quality material

The Consumer – Attitudes Towards Hot Chocolate and Hot Malted Drinks

Key points
New flavours of malted drinks interest a third of users
Figure 43: Attitudes towards hot chocolate and malted drinks, April/May 2014
Over a quarter of users think that powdered hot chocolate does not dissolve well
Liquid formats could take cues from other markets
Hot chocolate flavoured with alcohol interests a quarter of adults
Fortified hot chocolates would appeal to one in four

Appendix – Market Size and Forecast

Figure 44: Best and worst case forecasts for the total UK tea*, hot chocolate and hot malted drinks market, by value, 2014-19
Figure 45: Best and worst case forecasts for the total UK tea* hot chocolate and hot malted drinks market, by volume, 2014-19
Figure 46: UK retail volume sales and forecast for the tea*, hot chocolate and hot malted drinks market, 2009-19
Figure 47: Best and worst case forecasts for the UK tea* market, by value, 2014-19
Figure 48: Best and worst case forecasts for the UK tea* market, by volume, 2014-19
Figure 49: Best and worst case forecasts for the UK tea* market, by volume, 2009-19
Figure 50: Best and worst case forecasts for the UK hot chocolate and hot malted drinks market, by value, 2014-19
Figure 51: Best and worst case forecasts for the UK hot chocolate and hot malted drinks market, by volume, 2014-19
Figure 52: Best and worst case forecasts for the UK hot chocolate and hot malted drinks market, by volume, 2009-19

Appendix – The Consumer – Frequency of Usage

Figure 53: Frequency of usage of hot drinks in the last month, by type, April 2014
Figure 54: Frequency of usage of hot drinks in the last month, by type – Standard tea, by demographics, April 2014
Figure 55: Frequency of usage of hot drinks in the last month, by type – Speciality tea, by demographics, April 2014
Figure 56: Frequency of usage of hot drinks in the last month, by type – Green tea, by demographics, April 2014
Figure 57: Frequency of usage of hot drinks in the last month, by type – Fruit tea or herbal tea, by demographics, April 2014
Figure 58: Frequency of usage of hot drinks in the last month, by type – Instant tea, by demographics, April 2014
Figure 59: Frequency of usage of hot drinks in the last month, by type – Hot chocolate in any format, by demographics, April 2014
Figure 60: Frequency of usage of hot drinks in the last month, by type – Hot malted drink, by demographics, April 2014
Repertoire of usage of tea
Figure 61: Repertoire of usage of tea in the last month, by type, April 2014
Figure 62: Repertoire of usage of tea in the last month, by type, by demographics, April 2014
Figure 63: Frequency of usage of tea in the last month, by type, by repertoire of usage of tea in the last month, April 2014

Appendix – The Consumer – Factors Considered when Buying Tea

Figure 64: Factors considered when buying tea, April 2014
Figure 65: Most popular factors considered when buying tea, by demographics, April 2014
Figure 66: Next most popular factors considered when buying tea, by demographics, April 2014
Figure 67: Other factors considered when buying tea, by demographics, April 2014

Appendix – The Consumer – Attitudes Towards Tea

Figure 68: Attitudes towards tea, April 2014
Figure 69: Agreement with the statement ‘Tea is a good option to have between meals to prevent hunger’, by demographics, April 2014
Figure 70: Agreement with the statement ‘Drinking tea is a good alternative to having alcohol on a night in^’, by demographics, April 2014
Figure 71: Agreement with the statement ‘I would be interested in trying standard black tea that offered added health benefits’, by demographics, April 2014
Figure 72: Agreement with the statement ‘I prefer teas with a higher level of antioxidants’, by demographics, April 2014
Figure 73: Agreement with the statement ‘Teas with flavours tailored for the seasons would appeal to me’, by demographics, April 2014
Figure 74: Agreement with the statement ‘Ready-to-drink teas are a healthier alternative to soft drinks’, by demographics, April 2014
Figure 75: Agreement with the statement ‘I would like to see a greater variety of standard black teabags with added flavours’, by demographics, April 2014
Figure 76: Agreement with the statement ‘I would be interested in trying tea with a higher caffeine content as an alternative to coffee’, by demographics, April 2014
Figure 77: Agreement with the statement ‘I would be interested in using tea pods to make tea drinks’, by demographics, April 2014
Figure 78: Agreement with the statement ‘I would like to see more varieties of chai lattes’, by demographics, April 2014
Figure 79: Agreement with the statement ‘Hot tea does not appeal to me in hot weather’, by demographics, April 2014
Figure 80: Agreement with the statement ‘Tea takes too long to make at breakfast time during the week’, by demographics, April 2014

Appendix – The Consumer – Attitudes Towards Teabags

Figure 81: Attitudes towards standard teabags, April 2014
Figure 82: Most popular attitudes towards standard teabags, by demographics, April 2014
Figure 83: Next most popular attitudes towards standard teabags, by demographics, April 2014
Figure 84: Frequency of usage of hot drinks in the last month, by type, by most popular attitudes towards standard teabags, April 2014
Figure 85: Frequency of usage of hot drinks in the last month, by type, by next most popular attitudes towards standard teabags, April 2014

Appendix – The Consumer – Attitudes Towards Hot Chocolate and Hot Malted Drinks

Figure 86: Attitudes towards hot chocolate and hot malted drinks, April 2014
Figure 87: Most popular attitudes towards hot chocolate and hot malted drinks, by demographics, April 2014
Figure 88: Next most popular attitudes towards hot chocolate and hot malted drinks, by demographics, April 2014

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