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Tea - UK - July 2015

Tea operators can seek to boost volume sales by encouraging people to use tea in less traditional ways, for example in cold drinks such as ice tea or smoothies and in cooking and baking. Boding well for this is young people’s interest in such usage occasions, with scope for more companies to tap this interest by providing recipe inspiration.

This report looks at the following areas:

  • Encouraging people to use tea in more ways other than simply drinking it hot can help to boost usage frequency
  • Encouraging experimentation can help to inject more excitement into the tea market
  • Gifting can be more actively encouraged by tea operators
The downward trajectory within the overall tea market continues. Overall volume sales dropped by 15%between 2010 and 2014, with an annual decline of 7% forecast for 2015. Despite a rise in average selling price, the value of the market has also been steadily slipping over the 2010-15 period, with an overall decline of 6% to £654 million.

This poor performance, however, masks very contrasting performances from the different segments within the tea market. The downfall is almost completely attributable to diminishing sales of ordinary teabags, which dominate the market. Meanwhile, fruit/herbal tea, speciality tea and green tea continue to enjoy strong growth. As such, these segments have become hotbeds of innovation activity.

 

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 1: UK retail value sales and forecast for the tea market, 2010-20
            • Market factors
              • The warm weather in 2014 was bad news for the tea market
                • Climate change is a major issue for the tea industry
                  • Growth in 25-34s to benefit the green and herbal tea markets
                    • Companies, brands and innovation
                      • PG Tips and Tetley lose sales
                        • Figure 2: Top brands’ shares in the UK tea market, by value, 2014/15*
                      • High-profile NPD activity in the fruit/herbal and green tea segments
                        • An uptick in adspend in 2014
                          • The consumer
                            • Most people drink standard tea daily
                              • Figure 3: Frequency of usage of tea, by type, April 2015
                            • Tea is an established partner for biscuits and cakes
                              • Figure 4: Attitudes towards tea, April 2015
                            • Mood enhancement and health are key to the appeal of green and herbal teas
                              • Figure 5: Attitudes towards fruit, herbal and green tea, April 2015
                            • Standard tea is set apart by its traditional quality
                              • Figure 6: Correspondence Analysis – tea, April 2015
                            • What we think
                            • Issues and Insights

                                • Encouraging people to use tea in more ways other than simply drinking it hot can help to boost usage frequency
                                  • The facts
                                    • The implications
                                      • Encouraging experimentation can help to inject more excitement into the tea market
                                        • The facts
                                          • The implications
                                            • Gifting can be more actively encouraged by tea operators
                                              • The facts
                                                • The implications
                                                • Market Drivers

                                                  • Key points
                                                    • Long-term decline in purchasing of tea
                                                      • Figure 7: UK household purchases of tea, coffee and cocoa, hot chocolate and malt drinks, 1974-2013
                                                    • Tea prices can be volatile depending on harvests
                                                      • The warm weather in 2014 was bad news for the tea market
                                                        • Growth in 25-34s to benefit the green and herbal tea markets
                                                        • Strengths and Weaknesses

                                                          • Strengths
                                                            • Weaknesses
                                                            • Who’s Innovating?

                                                              • Key points
                                                                • An increase in launches of loose tea in 2014
                                                                  • Figure 8: New product launches in the UK tea market, by format type, 2010-15
                                                                • A packaging revamp sees Pukka jump to the top in terms of NPD
                                                                  • Figure 9: New product launches in the UK tea market, by top 10 ultimate companies, 2010-15
                                                                • Other stalwarts give their packaging a design makeover
                                                                  • More companies expand into herbal and green tea
                                                                    • Functional benefits provide scope for NPD
                                                                    • Market Size and Forecast

                                                                      • Key points
                                                                        • Long-term decline within the tea market
                                                                          • Figure 10: UK retail sales value and volumes for the tea market, 2010-20
                                                                        • The future
                                                                          • Figure 11: UK retail volume sales and forecast for the tea market, 2010-20
                                                                          • Figure 12: UK retail value sales and forecast for the tea market, 2010-20
                                                                        • Methodology
                                                                        • Segment Performance

                                                                          • Key points
                                                                            • Ordinary teabags continue to lose share
                                                                              • Figure 13: UK retail value sales of tea, by segment, 2012-14
                                                                            • Fruit/herbal, speciality and green teas are the rising stars
                                                                              • Loose tea is down
                                                                              • Market Share

                                                                                • Key points
                                                                                  • PG Tips and Tetley lose sales
                                                                                    • Figure 14: Top brands’ sales and shares in the UK tea market, by value and volume, 2012/13-2014/15
                                                                                  • Twinings and Pukka benefit from increased interest in herbal teas
                                                                                      • Figure 15: Top manufacturers’ sales and shares in the UK tea market, by value and volume, 2012/13-2014/15
                                                                                  • Companies and Products

                                                                                    • Apeejay
                                                                                      • Background
                                                                                        • Product range
                                                                                          • Product innovation
                                                                                            • Advertising and promotion
                                                                                              • Associated British Foods
                                                                                                • Background
                                                                                                  • Product range
                                                                                                    • Product innovation
                                                                                                      • Advertising and promotion
                                                                                                        • Taylors of Harrogate
                                                                                                          • Background
                                                                                                            • Product range
                                                                                                              • Advertising and promotion
                                                                                                                • Tata Global Beverages
                                                                                                                  • Background
                                                                                                                    • Product range
                                                                                                                      • Product advertising and promotion
                                                                                                                        • Unilever
                                                                                                                          • Background
                                                                                                                            • Product range
                                                                                                                              • Product innovation
                                                                                                                                • Advertising and promotion
                                                                                                                                • Brand Research

                                                                                                                                  • What you need to know
                                                                                                                                    • Brand map
                                                                                                                                      • Figure 16: Attitudes towards and usage of selected brands, June 2015
                                                                                                                                    • Key brand metrics
                                                                                                                                      • Figure 17: Key metrics for selected brands, June 2015
                                                                                                                                    • Brand attitudes: Consumers likely to pay more for Twinings
                                                                                                                                      • Figure 18: Attitudes, by brand, June 2015
                                                                                                                                    • Brand personality: Accessibility is key to PG Tips and Tetley
                                                                                                                                      • Figure 19: Brand personality – macro image, June 2015
                                                                                                                                    • Clipper and Twinings have particularly different brand images
                                                                                                                                      • Figure 20: Brand personality – micro image, June 2015
                                                                                                                                    • Brand analysis
                                                                                                                                      • Twinings has the strongest premium connotations
                                                                                                                                        • Figure 21: User profile of Twinings, June 2015
                                                                                                                                      • Clipper has ethical point of difference
                                                                                                                                        • Figure 22: User profile of Clipper, June 2015
                                                                                                                                      • PG Tips enjoys high usage due to its accessibility, value and reassuring nature
                                                                                                                                        • Figure 23: User profile of PG Tips, June 2015
                                                                                                                                      • Yorkshire Tea is considered masculine compared to other brands
                                                                                                                                        • Figure 24: User profile of Yorkshire Tea, June 2015
                                                                                                                                      • Tetley has similar overall image to PG Tips but struggles to engage 16-24s as much
                                                                                                                                        • Figure 25: User profile of Tetley, June 2015
                                                                                                                                    • Brand Communication and Promotion

                                                                                                                                      • Key points
                                                                                                                                        • An uptick in adspend in 2014
                                                                                                                                          • Figure 26: Recorded above-the-line, online display and direct mail total advertising expenditure on tea, 2011-15
                                                                                                                                        • Unilever reclaims its place as the highest-spending advertiser
                                                                                                                                          • Figure 27: Recorded above-the-line, online display and direct mail total advertising expenditure on tea, by top 10 advertisers, 2011-15
                                                                                                                                        • Spend on Yorkshire Tea reaches a four-year high
                                                                                                                                          • Tetley’s £13 million campaign continues with new ad
                                                                                                                                            • ABF plans a £10 million investment for Twinings in 2015
                                                                                                                                              • Tea gets the Aldi treatment
                                                                                                                                                • Coverage/methodology clarification:
                                                                                                                                                • The Consumer – Usage of Tea

                                                                                                                                                  • Key points
                                                                                                                                                    • Most people drink standard tea daily
                                                                                                                                                        • Figure 28: Frequency of usage of tea, by type, April 2015
                                                                                                                                                      • One in three stick to one type of tea
                                                                                                                                                        • Figure 29: Repertoire of types of tea used, April 2015
                                                                                                                                                      • Tea usage varies by age and socio-economic status
                                                                                                                                                        • Figure 30: Consumers who drink speciality tea, green tea, fruit/herbal tea and instant tea at least once a day, by gender, age and socio-economic group, April 2015
                                                                                                                                                        • Figure 31: Consumers who drink one type of tea and those who drink five types of tea, by age, April 2015 
                                                                                                                                                      • Tea is most likely to be drunk in the morning and afternoon
                                                                                                                                                        • Figure 32: Times of day at which tea is typically drunk, April 2015
                                                                                                                                                    • The Consumer – Attitudes towards Tea

                                                                                                                                                      • Key points
                                                                                                                                                        • Tea is an established partner for biscuits and cakes
                                                                                                                                                          • Figure 33: Attitudes towards tea, April 2015
                                                                                                                                                        • Willingness to spend more on high-quality tea
                                                                                                                                                          • Brands can encourage more use of tea in cooking and baking
                                                                                                                                                            • New formats appeal to four in 10 under-35s
                                                                                                                                                            • The Consumer – Attitudes towards Fruit, Herbal and Green Tea

                                                                                                                                                              • Key points
                                                                                                                                                                • Mood enhancement and health are key to the appeal of green and herbal teas
                                                                                                                                                                  • Figure 34: Attitudes towards fruit, herbal and green tea, April 2015
                                                                                                                                                                • Smaller packs can encourage experimentation
                                                                                                                                                                  • Scope to build on diet connotations with green/fruit teas
                                                                                                                                                                    • Interest from 16-24s in creating their own cold tea-based drinks
                                                                                                                                                                    • The Consumer – Qualities Associated with Hot Drinks

                                                                                                                                                                      • Key points
                                                                                                                                                                        • Methodology
                                                                                                                                                                          • Standard tea is set apart by its traditional quality
                                                                                                                                                                            • Figure 35: Correspondence Analysis – tea, April 2015
                                                                                                                                                                            • Figure 36: Qualities associated with different hot drinks, April 2015
                                                                                                                                                                            • Figure 37: Further qualities associated with different hot drinks, April 2015
                                                                                                                                                                          • The health benefits of green tea are widely accepted
                                                                                                                                                                            • Higher-caffeine tea could heighten energy-boosting associations
                                                                                                                                                                              • The tea market is characterised with a lack of excitement
                                                                                                                                                                              • Appendix – Market Size and Forecast

                                                                                                                                                                                  • Figure 38: Best and worst case forecasts for the total UK tea, by value, 2014-19
                                                                                                                                                                                  • Figure 39: Best and worst case forecasts for the total UK tea, by value, 2014-19

                                                                                                                                                                              Companies Covered

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                                                                                                                                                                              Tea - UK - July 2015

                                                                                                                                                                              US $2,672.70 (Excl.Tax)