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TEA AND OTHER HOT DRINKS - UK - JULY 2018

Published By :

Mintel

Published Date : Jul 2018

Category :

Non-Alcoholic Drinks

No. of Pages : N/A

While Britons continue to live up to their reputation of being a nation of tea drinkers, volume sales for ordinary teabags, which dominate the market, are down, the competition from coffee and soft drinks eroding sales. While ordinary teabags remain their core offering, operators are developing their mix of products from other segments such as green, fruit/herbal and speciality tea, as well as teas to be drunk with alternative milks, to capitalise on growth opportunities in the shrinking market.

Table of contents
OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Inflation drives values while volume sales continue to fall in tea
Figure 1: UK retail value sales of tea, 2013-23
Ordinary teabags see ongoing drop in volume sales
Figure 2: UK retail value sales of tea, by segment, 2016 and 2017
Hot chocolate and malted drinks see ongoing decline
Figure 3: UK retail value sales of hot chocolate and hot malted drinks, by segment, 2016 and 2017
Incomes set to rise but expenditure to remain subdued
Drop in younger people poses potential barrier to growth
Companies and brands
Market leader PG Tips sees sales fall in tea
Figure 4: Leading brands’ value shares in the tea retail market, 2017/18*
Cadbury leads in hot chocolate but sees sales fall
Figure 5: Leading brands’ value shares in the hot chocolate retail market, 2017/18*
Market leader Horlicks sees continued decline in malted drinks
Figure 6: Leading brands’ value shares in the malted drinks retail market, 2017/18*
PG Tips launches dairy-free blend
Environmental claims remain widespread in tea
Adspend continues downward trajectory in 2017
PG Tips scores highest on brand commitment
The consumer
Standard tea dominates; 70% drink it, 45% daily
Figure 7: Frequency of drinking tea, by tea type, May 2018
Hot chocolate remains an infrequent treat
Figure 8: Frequency of drinking hot chocolate and hot malted drinks, May 2018
Branded opportunities in hot chocolate
Figure 9: Interest in innovation in tea, hot chocolate and malted drinks, May 2018 
Hydration benefits of tea noted by 83%
Figure 10: Attitudes towards tea, May 2018
Standard tea is seen to be traditional, comforting and refreshing
Figure 11: Correspondence analysis of qualities associated with hot drinks, May 2018 
A third see RTD cold tea as a good alternative to other soft drinks
Figure 12: Attitudes to RTD cold tea, May 2018
What we think
ISSUES AND INSIGHTS
Cold versions of tea can help the market to better compete with soft drinks
The facts
The implications
Opportunities for brands to talk about how dairy-free milks influence tea
The facts
The implications
Highlighting ethical/environmental credentials is timely given current consumer sentiment
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Inflation drives values while volume sales continue to fall in tea
Hot chocolate and malted drinks see ongoing decline
Ordinary teabags see ongoing drop in volume sales
Decline in tea drinking plateaus
Price rises seen in the market
Incomes set to rise but expenditure to remain subdued
Drop in younger people poses potential barrier
MARKET SIZE AND FORECAST
Inflation drives values while volume sales continue to fall in tea
Figure 13: UK retail value and volume sales of tea, 2013-23
Rise in values predicted, on the back of falling volumes
Figure 14: UK retail value sales of tea, 2013-23
Figure 15: UK retail volume sales of tea, 2013-23
Hot chocolate and malted drinks see ongoing decline
Figure 16: UK retail value and volume sales of hot chocolate and malted drinks, 2013-23
Further decline expected in hot chocolate and malted drinks
Figure 17: UK retail value sales of hot chocolate and malted drinks, 2013-23
Figure 18: UK retail volume sales of hot chocolate and malted drinks, 2013-23
Forecast methodology
MARKET SEGMENTATION
Ordinary teabags see ongoing drop in volume sales
Figure 19: UK retail value and volume sales of tea, by segment, 2015-17
Continued decline in hot chocolate and malted drinks
Figure 20: UK retail value and volume sales of hot chocolate and hot malted drinks, by segment, 2015-17
MARKET DRIVERS
Decline in tea drinking plateaus
Figure 21: UK household purchases of tea, coffee and cocoa, hot chocolate and malted drinks, 1974-2016/17
Under pressure from coffee and soft drinks
Price rises seen in the market
Incomes set to rise but expenditure to remain subdued
Figure 22: Annual percentage change in CPI and AWE (regular pay), monthly basis, January 2012-April 2018
Drop in younger people poses potential barrier to growth
Figure 23: Trends in the age structure of the UK population, 2013-23
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Market leader PG Tips sees sales fall in tea
Twinings sees growth slow
Yorkshire Tea and own-label see sales rise
Cadbury leads in hot chocolate but sees sales fall
Market leader Horlicks sees continued decline in malted drinks
PG Tips launches dairy-free blend
Environmental claims remain widespread in tea
Adspend continues downward trajectory in 2017
PG Tips scores highest on brand commitment
MARKET SHARE
Market leader PG Tips sees sales fall in tea
Unilever buys Pukka
Twinings sees growth slow
Yorkshire Tea and own-label see sales rise
Figure 24: Leading brands’ value sales and shares in the tea market, 2016/17 and 2017/18
Figure 25: Leading brands’ volume sales and shares in the tea market, 2016/17 and 2017/18
Cadbury leads in hot chocolate but sees sales fall
Options and Galaxy grow but Tassimo falters
Figure 26: Leading brands’ value sales and shares in the hot chocolate market, 2016/17 and 2017/18
Market leader Horlicks sees continued decline in malted drinks
Figure 27: Leading brands’ value sales and shares in the malted drinks market, 2016/17 and 2017/18
LAUNCH ACTIVITY AND INNOVATION
PG Tips launches dairy-free blend
Figure 28: PG Tips launches dairy-free blend, 2018
Yorkshire Tea unveils Biscuit Brew
Figure 29: Yorkshire Tea launches biscuit brew, 2018
Twinings targets healthy lifestyles with Superblends launch
Figure 30: Share of new product launches in the UK tea market, by top 10 companies, 2014-18 (sorted by 2017)
Figure 31: Twnings unveils Superblends range, 2018
Turmeric sees increase in popularity
Figure 32: Turmeric sees increasingly popularity as a flavour component, 2018
Asda ramps up activity in 2018
Figure 33: Asda launches dessert-inspired tea products, 2018
Own-labels look to premiumisation trend
Figure 34: Own-labels look to premiumisation, 2017 and 2018
Environmental claims remain widespread in tea
Removing plastic from teabags
Figure 35: New product launches in the UK tea market, by top 10 claims (sorted by 2017), 2014-18
Brands look to certification
Convenience appeals to time-pressed consumers
Figure 36: Brands launch teas with convenience claims, 2018
Vivid Matcha looks to single-serve sachets for OTG consumers
Hot chocolate and malted drinks NPD trails that of tea
Mars leads NPD; launching pods for Galaxy and Maltesers
M&S looks to single origin in hot chocolate
Figure 37: M&S launches single origin hot chocolates, 2017
Versatility could help to increase occasions
Figure 38: Brands pushing versatility, 2017 and 2018
ADVERTISING AND MARKETING ACTIVITY
Adspend continues downward trajectory in 2017
Figure 39: Total above-the line, online display and direct mail advertising expenditure on tea and other hot drinks, 2014-18
Bettys & Taylors of Harrogate leads spend in 2017
Figure 40: Total above-the line, online display and direct mail advertising expenditure on tea and other hot drinks, 2014-18
Unilever cuts spending on PG Tips…
…as does Tetley
Twinings, Clipper, Pukka and Teapigs increase spend
Mondel?z leads spend on hot chocolate
Nielsen Ad Intel coverage
BRAND RESEARCH
What you need to need to know
Brand map
Figure 41: Attitudes towards and usage of selected brands, July 2018
Key brand metrics
Figure 42: Key metrics for selected brands, July 2018
Brand attitudes: Twinings is seen to be worth paying more for
Figure 43: Attitudes, by brand, July 2018
Brand personality: PG Tips, Tetley and Yorkshire Tea are most accessible
Figure 44: Brand personality – Macro image, July 2018
Twinings offers sophistication; PG Tips, Tetley and Yorkshire Tea reassurance
Figure 45: Brand personality – Micro image, July 2018
Brand analysis
Twinings is seen to be worth paying more for; attracting an affluent user base
Figure 46: User profile of Twinings, July 2018
Yorkshire Tea seen to be authentic
Figure 47: User profile of Yorkshire Tea, July 2018
PG Tips scores highest on brand commitment
Figure 48: User profile of PG Tips, July 2018
Tetley is the least diverse
Figure 49: User profile of Tetley, July 2018
Clipper is seen to be the most ethical
Figure 50: User profile of Clipper, July 2018
THE CONSUMER – WHAT YOU NEED TO KNOW
Standard tea dominates; 70% drink it, 45% daily
Hot chocolate remains an infrequent treat
Branded opportunities in hot chocolate
Hydration benefits noted by 83%
Standard tea is seen to be traditional, refreshing and comforting
Just 9% drink RTD cold tea
A third see RTD tea as a good alternative to other soft drinks
DRINKING HABITS – TEA AND OTHER HOT DRINKS
Standard tea dominates; 70% drink it, 45% daily
Figure 51: Frequency of drinking tea, by tea type, May 2018
Speciality, fruit and green tea are drunk by 36%
Figure 52: Usage of speciality, green or fruit and herbal/spice tea, by household income, May 2018
A desire for variety: 34% drink 3-6 types of tea
Figure 53: Repertoire of types of tea drunk, May 2018
Hot chocolate remains an infrequent treat
Figure 54: Frequency of drinking hot chocolate and hot malted drinks, May 2018
INTEREST IN INNOVATION
Branded opportunities in hot chocolate
Figure 55: Interest in innovation in tea, hot chocolate and malted drinks, May 2018 
Environmental issues hold sway
22% show interest in tea using British ingredients
Figure 56: Tea products highlight English ingredients, 201 5 and 2017
Premium cues appeal to minority
ATTITUDES TOWARDS TEA
Hydration benefits noted by 83%
Figure 57: Attitudes towards tea, May 2018
43% take their own tea to work
59% keep their tea in the packaging it comes in
29% are tea connoisseurs
Figure 58: Agreement with the statement ‘I consider myself a tea connoisseur’, by age, May 2018
Figure 59: M&S provides guidance on how to make the perfect brew, 2018
23% drink tea with alternative milks
Knowing how much goes to the farmer would make fair trade tea worth paying more for
Figure 60: Tea and other hot drinks – CHAID – Tree output, May 2018
QUALITIES ASSOCIATED WITH HOT DRINKS
Standard tea is seen to be traditional, comforting and refreshing
Speciality tea seen to be premium; green and fruit most healthy
Figure 61: Correspondence analysis of qualities associated with hot drinks, May 2018 
Figure 62: Qualities associated with tea and other hot drinks, May 2018
Hot chocolate is most comforting and indulgent
Figure 63: Asda calls out indulgence in product name, 2018
Methodology
USAGE OF AND ATTITUDES RELATED TO RTD COLD TEA
Just 9% drink RTD cold tea
Coca-Cola’s launch of Fuze Tea could build momentum
Figure 64: Types of bottled drinks drunk, May 2018
A third see RTD cold tea as a good alternative to other soft drinks
Figure 65: Attitudes to RTD cold tea, May 2018
Opportunities for tea brands to branch into RTD cold tea
Sugar content is a concern for 29%
Opportunities for non-sweet flavours
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
CHAID – Methodology
Figure 66: Tea and other hot drinks – CHAID – Table output, May 2018
APPENDIX – MARKET SIZE AND FORECAST
Figure 67: UK value sales of tea, best- and worst-case forecast, 2018-23
Figure 68: UK volume sales of tea, best- and worst-case forecast, 2018-23
Figure 69: UK value sales of hot chocolate and malted drinks, best- and worst-case forecast, 2018-23
Figure 70: UK volume sales of hot chocolate and malted drinks, best- and worst-case forecast, 2018-23
Forecast methodology
APPENDIX – MARKET DRIVERS
Figure 71: UK household purchases of mineral or spring waters and soft drinks, 1992-2016/17
APPENDIX – MARKET SHARE
Figure 72: Leading manufacturer’s value and volume sales and shares in the tea market, 2016/17 and 2017/18
Figure 73: Leading manufacturer’s value and volume sales and shares in the hot chocolate market, 2016/17 and 2017/18
APPENDIX – LAUNCH ACTIVITY AND INNOVATION
Figure 74: Share of new product launches in the UK tea market, by branded and private label, 2014-18
Figure 75: Share of new product launches in the UK tea market, by top 20 flavours (sorted by 2017), 2014-18
Figure 76: Share of new product launches in the UK tea market, by claim category (sorted by 2017), 2014-18
Figure 77: Share of new product launches in the UK hot chocolate and malted drinks markets, by launch type, 2014-18
Figure 78: Share of new product launches in the UK hot chocolate and malted drinks markets, by top 10 companies (sorted by 2017), 2014-18
Figure 79: Share of new product launches in the UK hot chocolate and malted drinks markets, by top 10 flavours (sorted by 2017), 2014-18
APPENDIX – ADVERTISING AND MARKETING ACTIVITY
Figure 80: Total above-the line, online display and direct mail advertising expenditure on tea and other hot drinks, by top 10 brands, (sorted by 2017), 2014-18

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