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Tea and Other Hot Drinks - UK - July 2017

“Although black tea is still drunk by the vast majority of people, competition from other tea types, as well as coffee and soft drinks, has chipped away at its role as Britons’ go-to day-to-day drink. Indulgent flavours could help to sidestep younger consumers’ dislike of the bitterness of black tea, while highlighting their sugar-free credentials could allow flavoured teas to foster a role as an alternative to sugary drinks.”
– Anita Winther, Research Analyst

This Report discusses the following key topics:

  • Dessert flavours and functional benefits could entice the young to tea 
  • Fostering new usage occasions for tea as alternative to sugary drinks and with savoury pairings
  • Alternative sugars and wider uses warrant attention for hot chocolate and 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
            • Tea’s decline accelerates in 2016
              • Tea looks set for further decline
                • Figure 1: UK retail value sales of tea, 2012-22
              • Volume decline continues in hot chocolate and malted drinks
                • Further decline forecast for hot chocolate and malted drinks volumes
                  • Figure 2: UK retail value sales of hot chocolate and hot malted drinks, 2012-22
                • Ordinary tea bags continue to struggle
                  • Figure 3: UK retail value sales of tea, by segment, 2015 and 2016
                • Hot chocolate stalls, malted drinks decline
                  • Figure 4: UK retail value sales of hot chocolate and hot malted drinks, by segment, 2015 and 2016
                • Competition for drinking occasions is fierce
                  • Commodity prices on the rise, incomes set to be squeezed
                    • Companies and brands
                      • PG Tips sees values fall; Tetley reverses fortunes
                        • Figure 5: Leading brands’ shares in the UK retail tea market, by value, 2016/17*
                      • Cadbury remains dominant in hot chocolate
                        • Figure 6: Leading brands’ shares in the UK retail hot chocolate market, by value, 2016/17*
                      • Hot malted drinks brands struggle
                        • Figure 7: Leading brands’ shares in the UK retail hot malted drinks market, by value, 2016/17*
                      • Brands continue to lead tea NPD
                        • Functional and indulgent trends continue
                          • Cadbury’s Freddo brand enters hot chocolate
                            • Adspend falls in 2016
                              • Yorkshire Tea spotlights local heroes; Tetley introduces “Awesome Woman”
                                • Figure 8: Total above-the-line, online display and direct mail advertising expenditure on tea and other hot drinks, 2013-17
                              • The consumer
                                • Tea remains ingrained in the British diet
                                  • Figure 9: Frequency of drinking tea, by tea type, May 2017
                                • Hot chocolate and malted drinks remain rare treats
                                  • Figure 10: Frequency of drinking hot chocolate and hot malted drinks, May 2017
                                • No magic bullet to bolster standard black tea
                                  • Figure 11: Barriers to drinking standard black tea, May 2017
                                • De-stressing/calming and digestive health functions have strongest appeal
                                  • Figure 12: Interest in health/functional benefits provided by tea, May 2017
                                • Hot chocolate with refined sugar alternatives garners interest
                                  • Dessert-flavoured teas hit the sweet spot with 16-34-year-olds
                                    • Figure 13: Interest in product concepts in tea and other hot drinks, May 2017
                                  • Flavoured tea could gain from sugar debate
                                    • Expanding usage occasions for hot chocolate and malted powders
                                      • Figure 14: Attitudes towards tea and other hot drinks, May 2017
                                    • What we think
                                    • Issues and Insights

                                      • Dessert flavours and functional benefits could entice the young to tea
                                        • The facts
                                          • The implications
                                            • Fostering new usage occasions for tea as alternative to sugary drinks and with savoury pairings
                                              • The facts
                                                • The implications
                                                  • Alternative sugars and wider uses warrant attention for hot chocolate and malted drinks
                                                    • The facts
                                                      • The implications
                                                      • The Market – What You Need to Know

                                                        • Tea’s decline accelerates in 2016
                                                          • Tea looks set for further decline
                                                            • Volume decline continues in hot chocolate and malted drinks
                                                              • Further decline forecast for hot chocolate and malted drinks volumes
                                                                • Ordinary tea bags continue to struggle
                                                                  • Hot chocolate stalls, malted drinks decline
                                                                    • Competition for drinking occasions is fierce
                                                                      • Commodity prices on the rise, incomes set to be squeezed
                                                                      • Market Size and Forecast

                                                                        • Tea’s decline accelerates in 2016
                                                                          • Figure 15: UK retail value and volume sales of tea, 2012-22
                                                                        • Tea looks set for further decline
                                                                          • Figure 16: UK retail value sales of tea, 2012-22
                                                                          • Figure 17: UK retail volume sales of tea, 2012-22
                                                                        • Volume decline continues in hot chocolate and malted drinks
                                                                          • Figure 18: UK retail value and volume sales of hot chocolate and hot malted drinks, 2012-22
                                                                        • Further decline forecast for hot chocolate and malted drinks volumes
                                                                          • Figure 19: UK retail value sales of hot chocolate and hot malted drinks, 2012-22
                                                                          • Figure 20: UK retail volume sales of hot chocolate and hot malted drinks, 2012-22
                                                                        • Forecast methodology
                                                                        • Market Segmentation

                                                                          • Further decline for ordinary tea bags
                                                                            • Figure 21: UK retail value sales of tea, by segment, 2014-16
                                                                            • Figure 22: UK retail volume sales of tea, by segment, 2014-16
                                                                          • Hot chocolate stalls, malted drinks decline
                                                                            • Figure 23: UK retail value and volume sales of hot chocolate and hot malted drinks, by segment, 2014-16
                                                                        • Market Drivers

                                                                          • Competition for drinking occasions is fierce
                                                                            • Commodity prices on the rise as Brexit vote hits the market
                                                                              • Figure 24: Average price for tea bags, January 2013-May 2017
                                                                            • Household incomes set to be squeezed
                                                                              • Growth in 25-34s should benefit green and herbal tea
                                                                                • Growth in child population unlikely to alleviate the suffering hot chocolate market
                                                                                  • Figure 25: Trends in the age structure of the UK population, 2012-17 and 2017-22
                                                                              • Companies and Brands – What You Need to Know

                                                                                • PG Tips sees values fall; Tetley reverses fortunes
                                                                                  • Cadbury remains dominant in hot chocolate
                                                                                    • Hot malted drinks brands struggle
                                                                                      • Brands continue to lead tea NPD
                                                                                        • Functional and indulgent trends continue
                                                                                          • Cadbury’s Freddo brand enters hot chocolate
                                                                                            • Adspend falls in 2016
                                                                                              • Yorkshire Tea spotlights local heroes; Tetley introduces “Awesome Woman”
                                                                                              • Market Share

                                                                                                • Market leader PG Tips sees values fall
                                                                                                  • Twinings sees mixed results
                                                                                                    • Tetley reverses its fortunes
                                                                                                      • Yorkshire Tea and Pukka continue sales growth
                                                                                                        • Figure 26: Leading brands’ value sales and shares in the tea market, 2015/16 and 2016/17
                                                                                                        • Figure 27: Leading brands’ volume sales and shares in the tea market, 2015/16 and 2016/17
                                                                                                      • Cadbury remains the only dominant brand in hot chocolate
                                                                                                        • Tassimo’s growth continues
                                                                                                          • Figure 28: Leading brands’ sales and shares in the UK hot chocolate market, by value and volume, 2015/16 and 2016/17
                                                                                                        • Hot malted drinks leader Horlicks sees biggest fall
                                                                                                          • Figure 29: Leading brands’ sales and shares in the UK hot malted drinks market, by value and volume, 2015/16 and 2016/17
                                                                                                      • Launch Activity and Innovation

                                                                                                        • Tea launches hit four-year high
                                                                                                          • Figure 30: Share of new product launches in the UK tea market, by branded and private label, 2013-17
                                                                                                        • Loose-leaf tea grows share of NPD
                                                                                                          • Figure 31: Share of new product launches in the UK tea market, by format type, 2013-17
                                                                                                        • Twinings revamps fruit and green tea packaging
                                                                                                          • Figure 32: Share of new product launches in the UK tea market, by top 10 companies (sorted by 2016), 2013-17
                                                                                                        • Yorkshire Tea and Unilever go for speciality to reinvigorate black tea
                                                                                                          • Yorkshire Tea launches occasion brews
                                                                                                            • Unilever launches single-origin Pure Leaf
                                                                                                              • Brands look to functional benefits for a boost
                                                                                                                • Figure 33: Share of new product launches in the UK tea market featuring a functional of vitamin/mineral-fortified claim (sorted by 2016), 2013-17
                                                                                                              • Indulgent flavour NPD continues
                                                                                                                • Ethical claims remain prevalent in tea
                                                                                                                  • Figure 34: New product launches in the UK tea market, by top 10 claims (sorted by 2016), 2013-17
                                                                                                                • Activity in hot chocolate and malted drinks continues to lag behind tea
                                                                                                                  • Figure 35: Share of new product launches in the UK hot chocolate and malted drinks markets, by launch type, 2013-17
                                                                                                                • Cadbury’s Freddo brand enters hot chocolate
                                                                                                                  • New recipe and packaging for Cadbury Highlights
                                                                                                                    • Sweet Freedom unveils animal-themed packaging
                                                                                                                    • Advertising and Marketing Activity

                                                                                                                      • Adspend falls in 2016
                                                                                                                        • Figure 36: Total above-the-line, online display and direct mail advertising expenditure on tea and other hot drinks, 2013-17
                                                                                                                      • Unilever returns to the top of adspend table
                                                                                                                        • Figure 37: Total above-the-line, online display and direct mail advertising expenditure on tea and other hot drinks, by top 5 advertisers (sorted by 2016), 2013-17
                                                                                                                      • Yorkshire Tea uses local heroes in new campaign
                                                                                                                        • “Awesome Woman” leads Tetley’s Super Tea charge
                                                                                                                          • Typhoo unveils second Nigella Lawson TV advert
                                                                                                                            • Twinings supports fruit and green tea relaunch
                                                                                                                              • Clipper puts the spotlight on taste in black tea campaign
                                                                                                                                • Tea brands support charity
                                                                                                                                  • Nielsen Ad Intel coverage
                                                                                                                                  • The Consumer – What You Need to Know

                                                                                                                                    • Tea remains ingrained in the British diet
                                                                                                                                      • Hot chocolate and malted drinks remain rare treats
                                                                                                                                        • No magic bullet to bolster standard black tea
                                                                                                                                          • De-stressing/calming and digestive health functions have strongest appeal
                                                                                                                                            • Hot chocolate with refined sugar alternatives garners interest
                                                                                                                                              • Dessert-flavoured teas hit the sweet spot with 16-34-year-olds
                                                                                                                                                • Flavoured tea could gain from sugar debate
                                                                                                                                                  • Expanding usage occasions for hot chocolate and malted powders
                                                                                                                                                  • Drinking of Tea and Other Hot Drinks

                                                                                                                                                    • Tea remains ingrained in the British diet
                                                                                                                                                      • Figure 38: Repertoire of types of teas drunk, May 2017
                                                                                                                                                    • 48% of Brits drink standard black tea daily
                                                                                                                                                        • Figure 39: Frequency of drinking tea, by tea type, May 2017
                                                                                                                                                      • 25-34s are the most adventurous tea drinkers…
                                                                                                                                                        • …together with urbanites and the more affluent
                                                                                                                                                          • Figure 40: Drinking of tea once a day or more, by tea type, by age, May 2017
                                                                                                                                                        • Hot chocolate and malted drinks remain rare treats
                                                                                                                                                            • Figure 41: Frequency of drinking hot chocolate and hot malted drinks, May 2017
                                                                                                                                                        • Barriers to Drinking Standard Black Tea

                                                                                                                                                          • No magic bullet to bolster standard black tea
                                                                                                                                                            • Figure 42: Barriers to drinking standard black tea, May 2017
                                                                                                                                                          • Competition from coffee remains fierce
                                                                                                                                                            • Bitterness is an issue for the under-45s
                                                                                                                                                            • Interest in Functional Benefits in Tea

                                                                                                                                                              • Majority interested in health benefits in tea
                                                                                                                                                                • Figure 43: Interest in health/functional benefits provided by tea, May 2017
                                                                                                                                                              • Scope for tea to build on its reputation as comforting…
                                                                                                                                                                • …through NPD and marketing
                                                                                                                                                                  • Digestive health a good fit for herbal tea…
                                                                                                                                                                    • …but also holds potential in black tea
                                                                                                                                                                      • Detox and metabolism-boosting resonate among young women
                                                                                                                                                                      • Interest in Tea and Other Hot Drinks Product Concepts

                                                                                                                                                                        • Scope for hot chocolate to explore alternatives to refined sugar
                                                                                                                                                                          • Cocoa powders should highlight their unsweetened credentials
                                                                                                                                                                            • Figure 44: Interest in product concepts in tea and other hot drinks, May 2017
                                                                                                                                                                          • Dessert-flavoured teas hit the sweet spot with 16-34-year-olds
                                                                                                                                                                            • Personalised blends interest under-45s and higher earners
                                                                                                                                                                              • Interest in tea subscriptions remains niche
                                                                                                                                                                              • Attitudes towards Tea and Other Hot Drinks

                                                                                                                                                                                • Flavoured tea could gain from sugar debate
                                                                                                                                                                                  • Figure 45: Attitudes towards tea and other hot drinks, May 2017
                                                                                                                                                                                • Savoury food pairings interest 25-34-year-olds
                                                                                                                                                                                  • Expanding usage occasions for hot chocolate and malted powders
                                                                                                                                                                                  • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                      • Abbreviations
                                                                                                                                                                                        • Consumer research methodology
                                                                                                                                                                                        • Appendix – Market Size and Forecast

                                                                                                                                                                                          • Forecast methodology
                                                                                                                                                                                              • Figure 46: Total UK retail value sales of tea, best- and worst-case forecast, 2017-22
                                                                                                                                                                                              • Figure 47: Total UK retail volume sales of tea, best- and worst-case forecast, 2017-22
                                                                                                                                                                                              • Figure 48: Total UK retail value sales of hot chocolate and hot malted drinks, best- and worst-case forecast, 2017-22
                                                                                                                                                                                              • Figure 49: Total UK retail volume sales of hot chocolate and hot malted drinks, best- and worst-case forecast, 2017-22
                                                                                                                                                                                          • Appendix – Market Drivers

                                                                                                                                                                                              • Figure 50: Mean temperature, by month, January 2012-June 2017
                                                                                                                                                                                          • Appendix – Market Share

                                                                                                                                                                                              • Figure 51: Leading manufacturers’ sales and shares in the UK tea market, by value and volume, 2015/16 and 2016/17
                                                                                                                                                                                              • Figure 52: Leading manufacturers’ sales and shares in the UK hot chocolate market, by value and volume, 2015/16 and 2016/17
                                                                                                                                                                                              • Figure 53: Leading manufacturers’ sales and shares in the UK hot malted drinks market, by value and volume, 2015/16 and 2016/17
                                                                                                                                                                                          • Appendix – Launch Activity

                                                                                                                                                                                              • Figure 54: Share of new product launches in the UK hot chocolate and hot malted drinks market, by top 10 companies (sorted by 2016), 2013-17

                                                                                                                                                                                          Companies Covered

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

                                                                                                                                                                                          Tea and Other Hot Drinks - UK - July 2017

                                                                                                                                                                                          US $2,672.70 (Excl.Tax)