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Tea - UK - July 2015

Published By :

Mintel

Published Date : Jul 2015

Category :

Beverages

No. of Pages : N/A


The downward trajectory within the overall tea market continues. Overall volume sales dropped by 15% between 2010 and 2014, with an annual decline of 7% forecast for 2015. Despite a rise in average selling price, the value of the market has also been steadily slipping over the 2010-15 period, with an overall decline of 6% to £654 million.

This poor performance, however, masks very contrasting performances from the different segments within the tea market. The downfall is almost completely attributable to diminishing sales of ordinary teabags, which dominate the market. Meanwhile, fruit/herbal tea, speciality tea and green tea continue to enjoy strong growth. As such, these segments have become hotbeds of innovation activity.

Introduction

Definition
Abbreviations

Executive Summary

The market
Figure 1: UK retail value sales and forecast for the tea market, 2010-20
Market factors
The warm weather in 2014 was bad news for the tea market
Climate change is a major issue for the tea industry
Growth in 25-34s to benefit the green and herbal tea markets
Companies, brands and innovation
PG Tips and Tetley lose sales
Figure 2: Top brands’ shares in the UK tea market, by value, 2014/15*
High-profile NPD activity in the fruit/herbal and green tea segments
An uptick in adspend in 2014
The consumer
Most people drink standard tea daily
Figure 3: Frequency of usage of tea, by type, April 2015
Tea is an established partner for biscuits and cakes
Figure 4: Attitudes towards tea, April 2015
Mood enhancement and health are key to the appeal of green and herbal teas
Figure 5: Attitudes towards fruit, herbal and green tea, April 2015
Standard tea is set apart by its traditional quality
Figure 6: Correspondence Analysis – tea, April 2015
What we think

Issues and Insights

Encouraging people to use tea in more ways other than simply drinking it hot can help to boost usage frequency
The facts
The implications
Encouraging experimentation can help to inject more excitement into the tea market
The facts
The implications
Gifting can be more actively encouraged by tea operators
The facts
The implications

Market Drivers

Key points
Long-term decline in purchasing of tea
Figure 7: UK household purchases of tea, coffee and cocoa, hot chocolate and malt drinks, 1974-2013
Tea prices can be volatile depending on harvests
The warm weather in 2014 was bad news for the tea market
Growth in 25-34s to benefit the green and herbal tea markets

Strengths and Weaknesses

Strengths
Weaknesses

Who’s Innovating?

Key points
An increase in launches of loose tea in 2014
Figure 8: New product launches in the UK tea market, by format type, 2010-15
A packaging revamp sees Pukka jump to the top in terms of NPD
Figure 9: New product launches in the UK tea market, by top 10 ultimate companies, 2010-15
Other stalwarts give their packaging a design makeover
More companies expand into herbal and green tea
Functional benefits provide scope for NPD

Market Size and Forecast

Key points
Long-term decline within the tea market
Figure 10: UK retail sales value and volumes for the tea market, 2010-20
The future
Figure 11: UK retail volume sales and forecast for the tea market, 2010-20
Figure 12: UK retail value sales and forecast for the tea market, 2010-20
Methodology

Segment Performance

Key points
Ordinary teabags continue to lose share
Figure 13: UK retail value sales of tea, by segment, 2012-14
Fruit/herbal, speciality and green teas are the rising stars
Loose tea is down

Market Share

Key points
PG Tips and Tetley lose sales
Figure 14: Top brands’ sales and shares in the UK tea market, by value and volume, 2012/13-2014/15
Twinings and Pukka benefit from increased interest in herbal teas
Figure 15: Top manufacturers’ sales and shares in the UK tea market, by value and volume, 2012/13-2014/15

Companies and Products

Apeejay
Background
Product range
Product innovation
Advertising and promotion
Associated British Foods
Background
Product range
Product innovation
Advertising and promotion
Taylors of Harrogate
Background
Product range
Advertising and promotion
Tata Global Beverages
Background
Product range
Product advertising and promotion
Unilever
Background
Product range
Product innovation
Advertising and promotion

Brand Research

What you need to know
Brand map
Figure 16: Attitudes towards and usage of selected brands, June 2015
Key brand metrics
Figure 17: Key metrics for selected brands, June 2015
Brand attitudes: Consumers likely to pay more for Twinings
Figure 18: Attitudes, by brand, June 2015
Brand personality: Accessibility is key to PG Tips and Tetley
Figure 19: Brand personality – macro image, June 2015
Clipper and Twinings have particularly different brand images
Figure 20: Brand personality – micro image, June 2015
Brand analysis
Twinings has the strongest premium connotations
Figure 21: User profile of Twinings, June 2015
Clipper has ethical point of difference
Figure 22: User profile of Clipper, June 2015
PG Tips enjoys high usage due to its accessibility, value and reassuring nature
Figure 23: User profile of PG Tips, June 2015
Yorkshire Tea is considered masculine compared to other brands
Figure 24: User profile of Yorkshire Tea, June 2015
Tetley has similar overall image to PG Tips but struggles to engage 16-24s as much
Figure 25: User profile of Tetley, June 2015

Brand Communication and Promotion

Key points
An uptick in adspend in 2014
Figure 26: Recorded above-the-line, online display and direct mail total advertising expenditure on tea, 2011-15
Unilever reclaims its place as the highest-spending advertiser
Figure 27: Recorded above-the-line, online display and direct mail total advertising expenditure on tea, by top 10 advertisers, 2011-15
Spend on Yorkshire Tea reaches a four-year high
Tetley’s £13 million campaign continues with new ad
ABF plans a £10 million investment for Twinings in 2015
Tea gets the Aldi treatment
Coverage/methodology clarification:

The Consumer – Usage of Tea

Key points
Most people drink standard tea daily
Figure 28: Frequency of usage of tea, by type, April 2015
One in three stick to one type of tea
Figure 29: Repertoire of types of tea used, April 2015
Tea usage varies by age and socio-economic status
Figure 30: Consumers who drink speciality tea, green tea, fruit/herbal tea and instant tea at least once a day, by gender, age and socio-economic group, April 2015
Figure 31: Consumers who drink one type of tea and those who drink five types of tea, by age, April 2015 
Tea is most likely to be drunk in the morning and afternoon
Figure 32: Times of day at which tea is typically drunk, April 2015

The Consumer – Attitudes towards Tea

Key points
Tea is an established partner for biscuits and cakes
Figure 33: Attitudes towards tea, April 2015
Willingness to spend more on high-quality tea
Brands can encourage more use of tea in cooking and baking
New formats appeal to four in 10 under-35s

The Consumer – Attitudes towards Fruit, Herbal and Green Tea

Key points
Mood enhancement and health are key to the appeal of green and herbal teas
Figure 34: Attitudes towards fruit, herbal and green tea, April 2015
Smaller packs can encourage experimentation
Scope to build on diet connotations with green/fruit teas
Interest from 16-24s in creating their own cold tea-based drinks

The Consumer – Qualities Associated with Hot Drinks

Key points
Methodology
Standard tea is set apart by its traditional quality
Figure 35: Correspondence Analysis – tea, April 2015
Figure 36: Qualities associated with different hot drinks, April 2015
Figure 37: Further qualities associated with different hot drinks, April 2015
The health benefits of green tea are widely accepted
Higher-caffeine tea could heighten energy-boosting associations
The tea market is characterised with a lack of excitement

Appendix – Market Size and Forecast

Figure 38: Best and worst case forecasts for the total UK tea, by value, 2014-19
Figure 39: Best and worst case forecasts for the total UK tea, by value, 2014-19

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