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Tea and Other Hot Drinks - UK - July 2016

“UK retail value sales of tea have been in decline, with growth in sales of green, fruit/herbal and speciality teas not enough to make up for a fall in sales of standard black tea that dominates the market. Tea brands need to increase the appeal of their products to 16-34-year-olds who have a stronger preference for more indulgent hot drinks.”

Richard Caines, Senior Food & Drink Analyst

This report looks at the following areas:

  • NPD needed to drive more tea drinking among younger generation
  • Adding value to tea market through wider repertoires and trading up
  • New features and formats needed in hot chocolate and malted drinks to develop new usage occasions

For the purposes of this Report, Mintel has used the following definitions:

The tea market is segmented – and defined – as follows:

  • Ordinary teabags, which contain black tea, account for the majority of standard black teas in the UK market and are the main product for brand leaders such as PG Tips and Tetley. Black tea usually has a rich taste, which means it is suited to being served with milk and sugar.
  • Decaffeinated tea is used to refer to black tea that has been through a process to remove most of the caffeine content.
  • Speciality tea is used to refer to tea which, although similar in appearance to standard tea and also often drunk with milk, is usually sourced from specific high-quality tea plantations and has a distinctive taste. Examples include Earl or Lady Grey, Chai and Darjeeling, Ceylon, Assam and Kenyan blends.
  • Fruit and herbal teas are typically infusions which contain pieces of fruit, herbs (eg peppermint), spices or flowers (eg camomile). Tending not to contain black or green tea, they are generally caffeine-free. The segment also includes Redbush tea.
  • Green tea is a tea which is a light green colour when brewed and is generally drunk without milk. In contrast to black tea which is oxidised, green tea is un-oxidised and has a more bitter flavour.
  • Instant tea comes in powder or granule form and contains soluble tea solids, sometimes with the addition of sweetener, milk powder and/or flavourings.

Hot chocolate drinks are defined as follows:

  • Hot chocolate powder that requires the addition of either milk or water. It also includes products that are ready prepared and need to be heated in the microwave, as well as stir-in spoons (that are stirred into hot milk).
  • Cocoa and cocoa powder.

Malted drinks are defined as follows:

  • Malted drinks that require the addition of either milk or water.
  • Malted hot chocolate drinks, eg Ovaltine malted drinks, chocolate malted drinks.

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this report
      • Executive Summary

          • The market
            • Decline in total sales of tea and other hot drinks
              • Figure 1: UK retail value sales and forecast for the tea*, hot chocolate and hot malted drinks market, 2011-21
            • Green tea the biggest boost to tea market
              • Figure 2: UK retail value sales of tea, by segment, 2013-15
            • Companies and brands
              • PG Tips’ lead over Twinings narrows
                • Figure 3: Top brands’ sales and shares in the UK tea market, by value, 2015-16
              • The consumer
                • Half of people drink standard black tea daily
                  • Room to encourage more drinking of hot chocolate
                    • Strong brand loyalty in tea buying
                      • Figure 4: Prompts that would encourage people to buy a different tea type/brand, May 2016
                    • Low price and promotions exert a big influence
                      • Figure 5: Most important factors influencing choice when buying one tea type/brand over another, May 2016
                    • Strong interest in tea with added health benefits
                      • Figure 6: Interest in trying different products, May 2016
                    • Speciality teas can appeal as a treat and encourage trading up
                      • Figure 7: Attitudes towards tea and other hot drinks, May 2016
                    • What we think
                    • Issues and Insights

                      • NPD needed to drive more tea drinking among younger generation
                        • The facts
                          • The implications
                            • Adding value to tea market through wider repertoires and trading up
                              • The facts
                                • The implications
                                  • New features and formats needed in hot chocolate and malted drinks to develop new usage occasions
                                    • The facts
                                      • The implications
                                      • The Market – What You Need to Know

                                        • Decline in total sales of tea and other hot drinks
                                          • Long-term decline in tea consumption continues
                                            • Green tea the biggest boost to the tea market
                                              • Fall in sales of hot chocolate and hot malted drinks
                                                • Need for market to encourage more drinking by younger people
                                                • Market Size and Forecast

                                                  • Declining sales of standard black tea hits total market
                                                    • Figure 8: UK retail sales for the tea*, hot chocolate and hot malted drinks market, by volume and value, 2011-21
                                                  • No immediate signs of recovery in total tea sales
                                                      • Figure 9: UK retail value sales and forecast for the tea*, hot chocolate and hot malted drinks market, 2011-21
                                                    • Forecast methodology
                                                    • Segment Performance

                                                      • Declining black tea sales continue to hit market
                                                        • Figure 10: UK retail value and volume sales of tea*, 2011-21
                                                        • Figure 11: UK retail value sales and forecast for tea*, 2011-21
                                                      • Green tea provides the biggest boost to the market
                                                        • Figure 12: UK retail value sales of tea, by segment, 2013-15
                                                        • Figure 13: UK retail volume sales of tea, by segment, 2013-15
                                                      • Decline in sales of hot chocolate and malted drinks
                                                        • Figure 14: UK retail value and volume sales for the hot chocolate and hot malted drinks market, 2011-21
                                                        • Figure 15: UK retail value sales and forecast for the hot chocolate and hot malted drinks market, 2011-21
                                                      • Need for more marketing activity to encourage drinking
                                                        • Figure 16: UK retail value sales of hot chocolate and hot malted drinks, by segment, 2013-15
                                                        • Figure 17: UK retail volume sales of hot chocolate and hot malted drinks, by sector, 2013-15
                                                    • Market Drivers

                                                      • Long-term decline in tea but more drinking of coffee
                                                        • Figure 18: UK household purchases of tea, coffee and cocoa, hot chocolate and malt drinks, 2001-14
                                                      • Competition from soft drinks and waters
                                                        • Figure 19: UK household purchases of mineral and spring waters and soft drinks, 2001-14
                                                      • Younger people need encouraging to drink more tea
                                                        • Figure 20: Trends in the age structure of the UK population, 2010-20
                                                    • Key Players – What You Need to Know

                                                      • PG Tips’ lead over Twinings narrows
                                                        • Yorkshire Tea and Pukka see sales growth
                                                          • Mondelēz has nearly half of hot chocolate sales
                                                            • Big focus on flavour extensions in tea
                                                              • Increasing choice of green and speciality teas
                                                                • Confectionery brands extend hot chocolate offer
                                                                  • Darker or more indulgent hot drinks and different formats
                                                                    • Increase in 2015 advertising for teas
                                                                      • PG Tips the most trusted brand
                                                                        • Twinings stands out for innovation and high quality
                                                                          • Typhoo has more lapsed users
                                                                          • Market Share

                                                                            • PG Tips’ market lead over Twinings is narrowing
                                                                              • Yorkshire Tea and Pukka see sales growth
                                                                                • Figure 21: Top brands’ sales and shares in the UK tea market, by value and volume, 2014/15 and 2015/16
                                                                              • Mondelēz accounts for nearly half of hot chocolate sales
                                                                                • Tassimo benefits from popularity of pod machines
                                                                                  • Figure 22: Leading brands’ sales and shares in the UK hot chocolate market, by value and volume, 2014/15 and 2015/16
                                                                                • Horlicks and Ovaltine dominate hot malted drinks
                                                                                  • Figure 23: Leading brands’ sales and shares in the UK malted drinks market, by value and volume, 2014/15 and 2015/16
                                                                              • Launch Activity and Innovation

                                                                                • Tea bags dominate launch activity
                                                                                  • Figure 24: New product launches in the UK tea market, by format type, 2011-16
                                                                                • Twinings leads launch activity with flavour extensions
                                                                                  • Figure 25: Examples of new flavour launches in the UK tea market, 2015 and 2016
                                                                                  • Figure 26: Further examples of new flavour launches in the UK tea market, 2015 and 2016
                                                                                • Tetley puts focus on added health benefits
                                                                                  • Figure 27: Examples of Tetley’s super’ fruits and green tea launches in the UK tea market, 2015 and 2016
                                                                                  • Figure 28: New product launches in the UK tea market (top 12*), by company, 2011-16
                                                                                • Increasing choice of green teas available
                                                                                  • Packaging revamp for PG Tips and more blends to choose from
                                                                                    • Ethical claims prominent in the tea market
                                                                                      • Figure 29: New product launches in the UK tea market, by claims (top 15*), 2011-16
                                                                                    • Chocolate confectionery brands extend hot chocolate offer
                                                                                      • Options was the focus of launch activity for Ovaltine
                                                                                        • Figure 30: Examples of launches in the UK hot chocolate market, 2015 and 2016
                                                                                      • More indulgent hot chocolates and added flavours
                                                                                        • Figure 31: Examples of launches in the UK hot chocolate market, 2015 and 2016
                                                                                        • Figure 32: New product launches in the UK malt and other hot beverages market, by company, 2011-16
                                                                                      • ‘Light’ products prominent and low-sugar claims growing
                                                                                        • Figure 33: New product launches in the UK malt and other hot beverages market, by claims (top 12*), 2011-16
                                                                                    • Brand Communication and Promotion

                                                                                      • Big increase in 2015 advertising
                                                                                        • Figure 34: Recorded above-the-line, online display and direct mail total advertising expenditure on tea and other hot drinks, 2012-16
                                                                                      • Taylor’s Yorkshire Tea biggest spender
                                                                                        • Figure 35: Recorded above-the-line, online display and direct mail total advertising expenditure on tea, by advertiser, 2012-16
                                                                                      • Twinings benefits from encouraging everyday drinking
                                                                                        • Unilever’s PG Tips launches ‘Keep It Tea’ campaign
                                                                                          • Tetley looks to mix of new products and nostalgia
                                                                                            • Clipper Teas pushes green tea range
                                                                                              • Return to major advertising for Typhoo 
                                                                                                • Nielsen Media Research coverage
                                                                                                • Brand Research

                                                                                                    • What you need to know
                                                                                                      • Brand map
                                                                                                        • Figure 36: Attitudes towards and usage of selected brands, May 2016
                                                                                                      • Key brand metrics
                                                                                                        • Figure 37: Key metrics for selected brands, May 2016
                                                                                                      • Brand attitudes – PG Tips the most trusted brand
                                                                                                        • Figure 38: Attitudes, by brand, May 2016
                                                                                                      • Brand personality – Pukka stands out for being vibrant and ethical
                                                                                                        • Figure 39: Brand personality – Macro image, May 2016
                                                                                                      • Authenticity – A key strength for Yorkshire Tea
                                                                                                        • Figure 40: Brand personality – Micro image, May 2016
                                                                                                      • Brand analysis
                                                                                                        • Twinings stands out for consistently high quality
                                                                                                          • Figure 41: User profile of Twinings, May 2016
                                                                                                        • Yorkshire Tea the most authentic brand
                                                                                                          • Figure 42: User profile of Yorkshire Tea, May 2016
                                                                                                        • Pukka has a vibrant, fun and ethical image
                                                                                                          • Figure 43: User profile of Pukka, May 2016
                                                                                                        • PG Tips the most refreshing and accessible brand
                                                                                                          • Figure 44: User profile of PG Tips, May 2016
                                                                                                        • Tetley among the most trusted and accessible brands
                                                                                                          • Figure 45: User profile of Tetley, May 2016
                                                                                                        • Typhoo lacks standout and brand commitment
                                                                                                          • Figure 46: User profile of Typhoo, May 2016
                                                                                                      • The Consumer – What You Need to Know

                                                                                                        • Half of people drink standard black tea daily
                                                                                                          • Younger, more affluent bias to drinking of other teas
                                                                                                            • Room to encourage more drinking of hot chocolate
                                                                                                              • Drinking standard black tea spread throughout most of day
                                                                                                                • Strong brand loyalty in tea buying
                                                                                                                  • Low price and promotions exert a big influence
                                                                                                                    • Strong interest in tea with added health benefits
                                                                                                                      • A wider variety of flavours can increase the appeal of tea
                                                                                                                        • Speciality teas can appeal as a treat and encourage trading up
                                                                                                                          • Being unhealthy or too sweet limiting drinking of hot chocolate
                                                                                                                          • Drinking of Tea and Other Hot Drinks

                                                                                                                            • Half of people drink standard black tea daily
                                                                                                                              • Figure 47: Frequency of drinking different types of hot drink, May 2016
                                                                                                                            • Younger, urban and affluent bias to drinkers of other teas
                                                                                                                              • Half of people drink hot chocolate but most do so no more than once a week
                                                                                                                                • Half of people drink more than one type of tea
                                                                                                                                  • Figure 48: Number of different types of tea drunk in last month, May 2016
                                                                                                                                • Number of cups of standard black tea drunk
                                                                                                                                  • Figure 49: Number of cups of standard black tea drunk per day by drinkers of standard black tea, May 2016
                                                                                                                              • Times of Day for Drinking Hot Drinks

                                                                                                                                • Drinking black tea spread throughout most of the day
                                                                                                                                  • Figure 50: Times of day people typically drink different types of hot drinks, May 2016
                                                                                                                              • Factors Influencing Choice of Tea

                                                                                                                                • Strong brand loyalty when shopping for tea
                                                                                                                                  • Figure 51: Sticking to one tea product vs buying different tea products, May 2016
                                                                                                                                • Strong interest in free samples
                                                                                                                                  • Figure 52: Prompts that would encourage people to buy a different tea type/brand, May 2016
                                                                                                                                • Price has a big influence on decision making
                                                                                                                                  • Regional British heritage more important to older tea drinkers
                                                                                                                                    • Figure 53: Most important factors influencing choice when buying one tea type/brand over another, May 2016
                                                                                                                                  • Being ethically sourced a significant consideration
                                                                                                                                  • Interest in Trying Different Products

                                                                                                                                    • Strong interest in tea with functional health benefits
                                                                                                                                        • Figure 54: Interest in trying different products, May 2016
                                                                                                                                      • Added flavours can increase interest in standard black tea
                                                                                                                                        • Tea capsules/pods have limited appeal
                                                                                                                                          • Room for added-value hot chocolates
                                                                                                                                          • Attitudes towards Hot Drinks

                                                                                                                                            • Room for more indulgence in tea market
                                                                                                                                                • Figure 55: Attitudes towards tea and other hot drinks, May 2016
                                                                                                                                              • Caffeine content only a limited barrier to drinking tea
                                                                                                                                                • Healthy living limiting the drinking of hot chocolate
                                                                                                                                                  • Flavour of hot malted drinks a barrier to purchasing
                                                                                                                                                  • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                      • Abbreviations
                                                                                                                                                        • Consumer research methodology
                                                                                                                                                        • Appendix – The Market

                                                                                                                                                            • Figure 56: Best- and worst-case forecast of total UK retail volume sales of tea*, hot chocolate and hot malted drinks, 2011-21
                                                                                                                                                            • Figure 57: Best- and worst-case forecast of total UK retail value sales of tea*, hot chocolate and hot malted drinks, 2011-21
                                                                                                                                                            • Figure 58: Best- and worst-case forecast of total UK retail volume sales of tea*, hot chocolate and hot malted drinks, 2011-21
                                                                                                                                                            • Figure 59: Best- and worst-case forecast of total UK retail volume sales of tea*, 2011-21
                                                                                                                                                            • Figure 60: Best- and worst-case forecast of total UK retail value sales of tea*, 2011-21
                                                                                                                                                            • Figure 61: Best- and worst-case forecast of total UK retail volume sales of tea*, 2011-21
                                                                                                                                                            • Figure 62: Best- and worst-case forecast of total UK retail volume sales of hot chocolate and hot malted drinks, 2011-21
                                                                                                                                                            • Figure 63: Best- and worst-case forecast of total UK retail value sales of hot chocolate and hot malted drinks, 2011-21
                                                                                                                                                            • Figure 64: Best- and worst-case forecast of total UK retail volume sales of hot chocolate and hot malted drinks, 2011-21
                                                                                                                                                          • Fan chart forecast
                                                                                                                                                          • Appendix – Key Players

                                                                                                                                                              • Figure 65: Top manufacturers’ sales and shares in the UK tea market, by value and volume, 2014/15 and 2015/16
                                                                                                                                                              • Figure 66: Top manufacturers’ sales and shares in the UK hot chocolate market, by value and volume, 2014/15 and 2015/16
                                                                                                                                                              • Figure 67: Top manufacturers’ sales and shares in the UK malted drinks market, by value and volume, 2014/15 and 2015/16
                                                                                                                                                              • Figure 68: New product launches in the UK tea market, by launch type, 2011-16
                                                                                                                                                              • Figure 69: New product launches in the UK tea market, by branded vs private label, 2011-16
                                                                                                                                                              • Figure 70: New product launches in the UK malt and other hot beverages market, by branded vs private label, 2011-16
                                                                                                                                                              • Figure 71: New product launches in the UK malt and other hot beverages market, by launch type, 2011-16

                                                                                                                                                          Companies Covered

                                                                                                                                                          To learn more about the companies covered in this report please contact us.

                                                                                                                                                          Tea and Other Hot Drinks - UK - July 2016

                                                                                                                                                          £1,995.00 (Excl.Tax)