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Its all about the tea

Tea sales in the out-of-home coffee shop market are estimated at £300 million, according to a new report on tea drinking by Allegra World Coffee Portal. While coffee continues to dominate as the hot drink of choice out of home, tea – in its many different forms – is enjoying a resurgence in popularity with today’s increasingly demanding consumers expecting choice

Latest market reports (June 2014) show that retail sales of black tea have declined, however the market remains huge at £643.57m and black tea sales represent 81% of volume of total tea sales, so – in spite of the growing demand for different teas – black tea continues to be the UK’s most popular type of tea.

“Fruit and herbal makes up the next biggest category, closely followed by speciality, then decaf,” comments Stephen Drysdale, Head of Ringtons Beverages. “In addition, the green tea market is growing – by 7.8% volume in 12 months.”

When founded in 1907, Ringtons sold just one type of loose black tea; today the company offers over 200 varieties of tea in both tea bag and loose-leaf form. “Classic teas such as English Breakfast and Earl Grey remain our most popular black teas, but as consumer tastes have developed, we have seen more people trying a variety of black teas such as Assams, Pekoes and Darjeelings,” says Drysdale. “This is a trend that has really come about in the last five years as consumers have learnt more about tea and have developed their own taste preferences; in a similar manner to how people now know more about wine and have their favourites.”

In spite of the fact that sales of herbal infusions, green tea, fruit blends and Rooibos (a natural caffeine-free herb) have increased, Drysdale believes that black-tea alternatives remain a relatively niche market. “The majority of customers still want, and expect, more traditional black tea, with alternative teas more commonly being served as a second beverage,” observes Drysdale. “We believe that the market for single estate tea, whereby tea is taken from just one tea estate or garden, is also growing in popularity. While this market is still in its infancy, it is certainly one area to watch and we expect it to pick up momentum in the near future.”

tea leavesAfternoon tea

“Afternoon tea is particularly big business right now,” observes Andrew Jack, Head of Marketing at Matthew Algie. “A wide range of operators, from cafés to pubs, are looking to boost the afternoon lull and capitalise on the high margins of what for so long was the hotelier’s domain. Consequently, while demand has increased, so have consumer expectations and competition – and outlets are increasingly having to raise their game.

“In addition, the rise in popularity of highquality, unique blends is being driven by a need to differentiate from what can be bought on the average supermarket shelf.”

Keith Newton, founder of afternoontea agrees that afternoon tea is becoming increasingly popular. “Our website, which celebrated its tenth anniversary last year, saw a 50% rise in bookings in 2014 compared with 2013,” says Newton. “We’re very pleased to see that the interest in afternoon tea continues to grow. It’s an affordable luxury that appeals to both the British public and tourists alike. More and more venues are identifying the effect afternoon teas can have on boosting their revenues and, in turn, are becoming ever-more imaginative in their creations.”

Stronger together with Tetley

With a view to assisting operators to benefit from serving tea to customers out of home, Tetley has launched its Tetley Tea Academy.

“Nielsen research states the speciality tea market has grown by 3.3% in the last 12 months, giving operators the opportunity to profit by expanding their range,” comments Isabelle Haynes, Tetley Senior Brand Manager – Out of Home. “Tetley Tea Academy recommends stocking around seven to eight different blends both to profit from this trend and keep consumers coming back for more.”

One of the most notable opportunities for growth has come from the takeaway market, with consumers spending £6.3 billion on hot drinks to go every year. “The Tetley On The Go range meets this need by offering a complete solution for efficient takeaway tea service,” says Haynes. “It reduces fuss, spillages and mess with its double-walled, branded cups, convenient sip-lids and drip-free drawstring tea bags.

“Breakfast is also a growing trend that operators can take advantage of; consumers’ lifestyles are becoming increasingly busy, which is driving out-of-home sales, especially in the cost sector. Tea is enjoyed with 46%, or 7.6 billion, of all breakfast occasions, and this day part accounts for one third of all tea consumption.”

Green tea leavesPG tips and Monkey scale new heights for Comic Relief

Known for putting its money where its mouth is, Unilever Food Solutions (UFS) has come up with a campaign that will not only bring a smile to people’s faces but that plans to raise £1 million for Comic Relief.

PG tips’ iconic Monkey has been given a mission: to scale the spectacular London landmark that is The Shard – or, to be more precise, to scale a total of 70 metres at the top of the building from the viewing gallery (244 metres high, equivalent to around 2200 mugs of tea) to the summit.

Operators are bring encouraged to get behind Monkey and buy PG tips 1150 packs in the build-up to Red Nose Day on 13 March. For each special pack produced, UFS will donate 50p to Comic Relief and operators can claim a free, limited edition climbing Monkey with every two promotional packs purchased (subject to availability). Fundraising kits are also available for operators to download from the UFS website.

Emma Quinn, UFS category manager for tea, said: “We’re excited to be backing Monkey’s mission. Comic Relief is a fantastic charity that makes a difference to the lives of people here at home in the UK and across Africa. There are plenty of great reasons for operators to sell PG tips – a brand consumers love and trust – but now we’ve given operators an extra one with our pledge to donate 50p per special pack produced for this great cause.”

Visit ufs.teatips.co.uk to get your toolkit and find out how you can help PG tips and Monkey raise £1 million.

Comic relief

In a nation of 64 million people, 165 million cups of tea are consumed every day in the UK. The majority of cups are consumed at home or at work, according to Allegra World Coffee Portal’s new report on tea drinking. The report also reveals the following:

Polarisation of tea brands The market is split between premium brands (e.g. Twinings) and economy brands (e.g. Tetley).

Economy brands are responding to declining black tea sales by introducing a wider variety of non-traditional teas. Exposure to premium tea is changing the preferences of habitual economy tea drinkers and High Street coffee shops are focusing on premium brands.

Growth potential for tea out of home

Consumers drink on average 11 cups of tea per week at home, 5 at work and just 0.5 in coffee shops. Tea consumption in coffee shops has risen 3 percent points in the last two years from 14% in 2012 to 17% in 2014. 15% of consumers intend to increase tea consumption in the upcoming year compared with 77% who expect to maintain their current tea consumption frequency.

Premiumisation is key

Premiumisation is an important trend in the UK market. 62% of consumers consider a premium brand such as Twinings or Teapigs to be the most important factor when ordering tea out of home. Traditional black tea sales are in decline, while premium teas such as green, fruit and herbal are becoming more popular. 53% of consumers indicated they would spend more on a premium tea.

Tea spend lower than coffee spend

Consumers spend on average £1.68 on a cup of tea out of home. This compares with £2.31 for a latte or cappuccino. This price difference means that 38% consider tea to be good value for money in a coffee shop.

Herbal teasTea-focused High Street operators

Two thirds of tea drinkers would like to see specialised tea chains on the High Street. Starbucks’ US launch of Teavana Tea Shops in 2013 is a strong indicator that a similar concept could launch in the UK. Allegra expects this to be a catalyst for other specialised tea shops.

Other trends

  • Consumers have strong views on their preferred way of brewing tea so customisation with non-dairy, lemon, added water etc. is essential to meet their preferences
  • Healthier lifestyles are increasingly important. Green, fruit and herbal teas help consumers satisfy their desire for healthier choices
  • Health-promoting tea blends with specific benefits are growing in popularity e.g. cold remedy, boosting immune system, aiding digestion.
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