Consumption of tea and hot chocolate is near universal in Germany. Tea is drunk by 91% of Germans at home/in the workplace, and hot chocolate by 71%. This ubiquitous nature puts the pressure on brands to increase volume sales, with 2024 seeing a 1% volume decline in tea sales, for example.
Inflation has impacted both categories with prices of tea and cocoa powder some 17.6% and 42.3% higher, respectively, in July 2024 than in 2020. Tea retail sales reached €1.59bn in 2024 and hot chocolate sales reached a little over €273m as prices continued to increase. Maintaining high usage frequency in this environment is a challenge for brands.
Climate change remains a disruptor for both industries, as significant supply challenges impact established tea-growing regions – yet the opportunity for localism in lesser developed cultivation areas continues to appear. Climate challenges and price fluctuations also impact the cocoa sector.
Health is a highly important avenue for both tea and hot chocolate NPD. To remain future-proof, advocation for health and sustainability will appeal to conscious consumers.
This report looks at the following areas:
- Market context and drivers for tea and hot chocolate, including the impact of the economy, the environment and personal health concerns
- Frequency of consumption, drinking occasions, and interest in innovations in tea and hot chocolate
- Attitudes and behaviours related to tea and hot chocolate, including interest in hot chocolate from a favourite brand, and healthy ingredients and unique hot chocolate flavours captivating consumer interest
- New product development trends, market shares, market size, segmentation and forecast
Focusing on functional health and unique flavours would bode well for both categories. Hot chocolate launches from well-established chocolate brands has huge appeal.
Hannah Sandow, Associate Director – Food & Drink, Germany
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EXECUTIVE SUMMARY
- The five year outlook for tea and hot chocolate
- Market context
- Tea remains a staple drink; hot chocolate is an affordable little luxury and afternoon pick-me-up
- Tightened finances, rising raw material prices and value-centric consumer behaviours are influencing both tea and hot chocolate categories
- Mental and physical health benefits, alongside ingredient concerns, coming to the fore
- Mintel predicts
- Tea and infusions will continue to see stronger value performance alongside weaker volume growth
- Market size and forecast: tea
- Steady continued growth of tea retail value sales
- Retail volume sales of tea are expected to remain flat
- Hot chocolate outperforms tea
- Market size and forecast: hot chocolate
- Retail value growth is expected amidst rising cocoa prices, well-sourced credentials and premiumisation
- Retail volume sales will be flatter up to 2029
- Opportunities
- Tea as an antidote to modern day stresses
- Position tea for tastier hydration
- Hot chocolate NPD from favourite brands appeals to Germans
- Promote tea – and hot chocolate’s – BFY ingredient functionality
- The competitive landscape
- Own label increases volume market share in both tea and hot chocolate categories
- Teekanne and OTG remain the tea market leaders value-wise, while own-label accounts for the largest volume share
- Graph 1: company retail value and volume shares of tea and infusions, 2024
- Nestlé remains the hot chocolate market leader, but own label sees an uptick during the cost-of-living hardship
- Graph 2: company retail value and volume shares of hot chocolate, 2024
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MARKET DRIVERS
- The German economy
- Inflation continues to affect consumers’ finances, confidence and expenditure
- Graph 3: financial confidence index, 2022-24
- Inflation hits hot beverage categories hard
- Graph 4: consumer price index for tea and cocoa powder, 2021-24
- Cocoa price hits record high as El Niño hurts crops
- Price increase in tea/hot chocolate cause over half of buyers to opt for cheaper products
- Personal health
- Ageing healthily and the significance of micro-nutrients
- Population health, including stress management, to remain at the fore of government agendas
- Rise of weight-loss drugs and what this means for food and drink solutions
- Ultra-processed food and drink, including hot chocolate, coming ‘under fire’
- Eco-ethical considerations
- Water usage, pollutants from tea production and drier weather in crucial production regions are critical environmental concerns
- Regional and organic produce remain important in light of the climate crisis
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WHAT CONSUMERS WANT AND WHY
- Frequency of drinking tea and hot chocolate
- Tea consumption remains constant amongst Germans…
- Graph 5: consumption of tea at home or in the workplace, 2022-24
- …with 16-34s remaining the lead drinkers
- Graph 6: consumption of tea, by age group, 2024
- Fruit and herbal/spice teas continue to take the lead
- Graph 7: frequency of drinking tea, by type, 2024
- Hot chocolate consumption falls marginally
- Graph 8: consumption of hot chocolate at home or in the workplace, 2022-24
- 16-34s are the biggest fans of hot chocolate
- One in 10 drink hot chocolate every day
- Graph 9: frequency of drinking hot chocolate, 2022-24
- Provide excitement with more versatility and variety
- Drinking occasions for tea and hot chocolate
- Tea and hot chocolate remain most commonly drunk alongside meals
- Graph 10: consumption of hot chocolate on its own or with meals, 2023-24
- Graph 11: consumption of hot brew tea on its own or with meals, 2023-24
- Tea is a morning and evening hero; hot chocolate keeps its place as an afternoon treat
- Graph 12: consumption of hot chocolate, by occasion, 2024
- Graph 13: consumption of tea, by occasion, 2024
- Upsell tea by positioning it with and/or applying it to sweet snacks
- Attitudes and behaviours towards tea
- Drinking tea brings a sense of escapism
- Graph 14: behaviours towards tea, 2024
- Under-represented in the media
- Gender and age diversity in TV/social media would aid category inclusivity
- Position tea as an alternative to alcoholic beverages
- Encourage kombucha product trial
- Need for taste innovation in the cold-brew segment
- Cold-brew teas as a healthier alternative to soft drinks
- Mixing tea with other non-alcoholic beverages
- Recipe inspiration sees Ehrenwort. Genussmomente’s Pink Superfood Iced Latte topped with strawberry ice cream
- Tea is seen as a hydrating and natural choice of flavoured drink
- Graph 15: attitudes towards tea/hot chocolate, 2024
- Drinking tea is a great way to stay hydrated…
- …and get an energy boost
- Sports/gaming sponsorship opportunities
- Tea brands can market to younger drinkers by sponsoring events
- Attitudes and behaviours towards hot chocolate
- Sugar reduction strategies for hot chocolate would appeal
- Graph 16: agreement that there should be a wider range of hot chocolate products with reduced sugar content, 2024
- Sugar and sweetener attribute associations: sugar is addictive, but most alternatives are unnatural
- Interest in tea innovation
- Health and convenience-led innovation have most appeal to tea drinkers
- Graph 17: interest in select tea innovations, 2024
- Younger Germans are target users for health-led NPD
- Health-led developments make their mark in tea
- Medicinal-health positioned teas serve as homemade remedies
- Enhance menopause support for women through ‘balancing’ teas
- Liquid concentrates help reduce packaging and offer value
- Innovative tea serves
- New tea formats gain popularity
- Recipes for cocktails/mocktails would appeal to younger health-conscious alcohol reducers
- Interest in hot chocolate innovation
- Leading chocolate brands can shake up the hot chocolate category with unique flavours/functional ingredient additions
- Graph 18: interest in select hot chocolate innovations, 2024
- Almost half of Germans aged 25-34 are interested in hot chocolate NPD from a favourite chocolate brand
- Hot chocolate with unique flavours appeals to both young and middle-aged consumers
- The German market can be adventurous with formats, from flakes to ‘chocolate spoons’
- Health-promoting ingredients are rare in hot chocolate
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LAUNCH ACTIVITY AND INNOVATION
- Coffee and tea impact each other’s innovation landscape
- Graph 19: hot beverage launches, by sub-category, 2021-24
- Branded tea and hot chocolate players dominate NPD
- Graph 20: brands’ share of tea and hot chocolate launches, 2021-24
- Hot beverages lead food and drink categories for sustainability claims
- Graph 21: leading food & drink categories with select sustainability claims, 2023-24
- Tea launch activity and innovation
- LSH continues to innovate, making it one of the leading players in Germany
- Graph 22: tea launches by ultimate company, 2021-24
- Plain and herbal teas continues to lead NPD activity
- Graph 23: tea launches, by flavour component/flavour component sub-group, 2020-24
- Graph 24: tea launches by flavour component sub-group, 2020-24
- Cold-brew tea witnessed strong launch performance in 2023
- Teas brands share their ethical and charitable stories
- Graph 25: tea launches by leading claims, 2020-24
- Sustainably sourced and biodegradable/compostable tea bags
- Functional sleep teas with added melatonin
- Teas for weight loss, purifying and detoxifying
- Chocolate launch activity and innovation
- Brands continue to lead the hot chocolate market, but private label is building a solid base
- Graph 26: malt and other hot beverage launches, by ultimate company, 2021-24
- Plain chocolate leads flavour NPD activity
- Graph 27: malt and other hot beverages launches, by flavour component/flavour component sub-group, 2020-24
- Sustainability and ethicality of hot chocolate
- Graph 28: hot chocolate launches by leading claims, 2020-24
- Advertising and marketing activity
- Fruit flavoured teas inspired by the produce of EU countries
- Teekanne’s iced tea Cool Sensations Sport drinks
- Bremer Gewürzhandel Genuss Helfer donates money to non-profit organisations
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MARKET SHARE
- Teekane and OTG are the main players in the German tea market; Nestlé continues to takes the lead for hot chocolate
- Retail market share of tea and infusions, by value and volume
- Teekanne still leads the German tea market by a large margin
- Teekanne and East West Tea Co are the only two companies to witness growth in volume sales in 2023-24
- Retail market share of hot chocolate, by value and volume
- Nestlé continues to lead the hot chocolate market, but own label gains most market share
- Nestlé also dominates volume market sales, but own label also sees the biggest gain
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MARKET SIZE, SEGMENTATION AND FORECAST
- Market segmentation for tea and infusions
- Fruit teas are the fastest growing segment
- Infusions see faster growth than tea
- Tea and infusions in retail volume for 2024 saw a decrease in all categories other than fruit and instant tea
- Market forecast for tea and infusions
- Price increases drive value sales growth, despite slowing volume sales
- Retail value sales forecast to continue rising
- Retail volume sales are set to witness weak volume growth
- Market segmentation for hot chocolate
- Speciality hot chocolate struggles to prove its worth amidst cost of living struggles
- Cocoa drinks outperform specialities in value in 2024
- Speciality chocolate sales drop in 2024
- Market forecast for hot chocolate
- Continued cost-of-living hardship, inflation and cacao price fluctuations will boost value sales
- Significant retail value sales growth is forecast for hot chocolate
- Retail volume sales are forecast to see only marginal growth
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APPENDIX
- Appendix – products covered, abbreviations, consumer research methodology and language usage
- Products covered in this Report
- Abbreviations
- Consumer research methodology
- A note on language
- Appendix – market size and central forecast methodology
- Forecast methodology
- Forecast methodology – fan chart
- Market size and forecast – tea and infusions
- Market size tea and infusions – value
- Market size tea and infusions – volume
- Market forecast and prediction intervals for tea and infusions – value
- Market forecast and prediction intervals for tea and infusions – volume
- Market size and forecast – hot chocolate
- Market size hot chocolate – value
- Market size hot chocolate – volume
- Market forecast and prediction intervals for hot chocolate– value
- Market forecast and prediction intervals hot chocolate – volume
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