Sector Insight: tea

Tea is entrenched in the British lifestyle, but herbal and speciality variants are carving out a health-based niche of their own.

Sector Insight: tea

There's nothing like a positive health claim to get food marketers excited and consumers eagerly filling their shopping trolleys. From blueberries to dark chocolate, a wide array of produce is being classed as superfoods or rich in health-enhancing properties.

This trend has even stretched to the humble cup of tea. Its antioxidant and hydrating properties mean that the nation's tea-drinking habits are also benefiting our health. Black tea conta­ins zinc, fluoride and flavo­noids, all of which, it is believed, boost health.

Herbal and green teas can lay claim to the most benefits; for example, re­search suggests cam­omile tea relieves colds and menstrual pain, and green tea eases arthritis.

Speciality and herbal teas are experi­encing the strongest growth, although standard tea still accounts for 92% of volume sales. Total growth in 2008 was modest, with value and volume sales rising only 1% to reach £552m, according to Mintel.

While tea faces competition from coffee and soft drinks, household penetration is high, with 83% of adults drinking it, and just over half (54%) doing so several times a day.

Herbal tea drinkers tend to be women, ABC1s and from the 45- to 50-year-old age group (followed by 25- to 34-year-olds) accord­ing to TGI. Of British men, 15% drink herbal tea, compared with 27% of women. Herbal teas usually form a part of consumers' tea-drinking repertoire, rather than replacing black tea entirely.

Rooibos tea, more commonly known as redbush, has been one of the best-performing alternative variants in recent years. Made from the leaves of the Rooibus bush, which grows in South Africa, it has gained favour due to its immune-system boosting prop­erties, low tannin levels and caffeine-free content. Because it can be drunk with milk, as well as straight, it makes an appealing alternative for UK drink­ers unwilling to forego white tea. It gained a broader audience when Tet­ley launched a range of Rooibus tea bags, backed by significant promo­tional investment, in 2007.

Although tea's caffeine content is lower than that of coffee, sales of caf­feine-free tea have increased, and now make up more than 5% of the market.

Ethical trading has also grown in importance for tea drinkers, despite still being a relatively small part of the market (16% of shoppers are regular purchasers of fairtrade products, according to TGI). Tea is a product, like coffee and chocolate, that easily lends itself to this trading scheme and both the Co-op and Marks & Spen­cer have switched all their own-label teas to Fairtrade-accredited variants.

Big-name brands continue to domi­nate the sector with Tetley, PG Tips, Twinings, Typhoo and Yorkshire Tea taking a market share of almost 75%. Own-label teas account for 17%.

Attempts to boost the premium end of the market have been prevalent among sup­pliers, with a rise in spec­iality blends or origin-specific leaves. In the 90s the shape of the tea bag became the focus of NPD, but this appears to have little impact on consu­mer choice today. Instead, packa­ging has been used as a way of gaining shelf-standout in a crowded market.

Tata-owned Tetley is the number one supplier of tea in the UK. In 2008 it tried, unsuccessfully, to buy Clipper Teas, but it did acquire Good Earth Teas, a US organic range, which has launched in the UK. Tata's recent promotional activity has included TV ads for its green teas promoting their place in a healthy lifestyle.

Unilever's PG Tips has used its brand icon, Monkey, to promote its range, with an accompanying range of toys making the simian a children's favourite. It has also joined with the Rainbow Alliance to source its tea from sustain­able plantations.

By 2013, Mintel predicts the tea market will be worth £574m, a rise of 4% on 2008. However, in real terms this is a value drop of 5%.

 

Tea Brands by Value and Market Share
RankBrand200820072006% change
£m%£m%£m%
1Tetley   1382513725135252.2
2PG Tips  1252312423124230.8
3Twinings  5094994894.2
4Typhoo   4384284282.4
5Yorkshire Tea   3873773772.7
Other  641265126412-
Own-label  9417951792172.2
Total   5521005491005421001.8
 
  Source: Mintel

 

Retail Sales of Tea by Type
Type200820072006% change
£m%£m%£m%
Standard tea, of which:  431784327943480-0.7
Tea bags  417764197642178-1
Decaffeinated   28527524416.7
Loose   1431321327.7
Speciality tea, of which:  4995094794.3
Herbal/fruit  42840737713.5
Teabags  4074073778.1
Loose tea  234234234-
Green tea  17316314321.4
Loose   92102102-10
Redbush tea  816141100
Instant tea  515161-14.3
Total  5521005491005421001.8

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