2025
9
UK Tea and Other Hot Drinks Market Report 2025
2025-02-04T12:03:47+00:00
REPF5FF2FFE_005B_438F_B7E5_D886FBF93644
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179295
[{"name":"Tea and Other Hot Drinks","url":"https:\/\/store.mintel.com\/industries\/drinks\/tea"}]
Report
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Some of the trading down seen during the cost of living crisis will start to reverse as real incomes regain momentum, creating more premium and added-value opportunities. However, inflation in…
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  8. UK Tea and Other Hot Drinks Market Report 2025

UK Tea and Other Hot Drinks Market Report 2025

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Some of the trading down seen during the cost of living crisis will start to reverse as real incomes regain momentum, creating more premium and added-value opportunities. However, inflation in tea remained high in 2024, prompting a third of consumers who drink and buy tea to rethink their tea choices in the last 12 months, with own-label continuing to gain share.

There will be no reprieve for tea from the ever-evolving competition from coffee and soft drinks, this being the biggest factor behind the market’s long-term decline. Engaging young consumers continues to be a struggle for the dominating standard black tea segment. This is not helped by most under-35s feeling their generation is absent in media depictions of black tea drinking. The image of tea needs to be modernised, and PG Tips has taken up the challenge to make the cuppa cool in its latest campaign.

Half of adults report to try to avoid drinks that cause your blood glucose to rise quickly, rising to 58% of under-45s. Raising awareness of unsweetened herbal tea’s blood sugar-friendly credentials – for example on-pack and in advertising, being mindful of claims regulations – would help the tea market to fully capitalise on the interest in managing blood sugar.

This report looks at the following areas:

  • The impact of the cost of living crisis on value and volume sales of tea and other hot drinks, and RTD tea
  • Trends in launch activity in tea and other hot drinks, and opportunities for further innovation
  • Usage of tea and other drinks by type, including key demographics
  • Interest in tea and hot chocolate concepts, including easy ways to make coffee shop-style teas at home and serving suggestions that make tea more exciting
  • Behaviours relating to tea, including perceptions of tea in the media, and the importance placed on tea breaks
  • Attitudes towards tea, including towards decaffeination and tea’s impact on blood glucose

Encouraging consumers to make teas drunk at home more exciting, and leaning into tea’s blood-sugar friendly and non-UPF credentials, can heighten its appeal.

Emma Clifford, Associate Director – Food and Drink

Market Definitions

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

The tea market is segmented and defined as follows:

  • Ordinary tea bags, 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.
  • Decaffeinated tea refers to black tea that has been through a caffeine-removal process.
  • Specialty tea refers to higher-quality tea and named blend teas. Examples include Darjeeling, Ceylon, Assam and Kenyan blends.
  • Fruit and herbal teas are typically infusions that 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 light green colour when brewed. 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.

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

Hot chocolate drinks are defined as follows:

  • Hot chocolate powder that requires the addition of 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.

Hot malted drinks are defined as follows:

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

Excluded:

This Report excludes teas and other hot drinks sold through catering outlets (ie cafés, restaurants, pubs etc) or vending machines. Coffee is excluded and is examined in Mintel’s UK Coffee Report.

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  1. EXECUTIVE SUMMARY

    • Opportunities for the tea and other hot drinks market
    • Elevate the at-home tea occasion…
    • …with convenient formats and suggestions beyond brands’ websites
    • Modernise the image of standard black tea
    • Target young consumers in campaigns to boost the relevance of black tea
    • Raise awareness of tea’s blood sugar-friendly credentials
    • Market dynamics and outlook
    • Market size & forecast
    • Market predictions
    • Rising prices will keep values in growth despite ongoing decline in volumes
    • Rising prices drive robust value growth across all tea segments
    • Graph 1: retail value sales of tea, by segment, 2022-24
    • Kombucha enjoys rapid growth, volumes of iced tea slip back in 2024
    • Graph 2: retail value sales of iced tea and kombucha, 2022-24
    • Yorkshire Tea, Typhoo and own-label continue to post robust growth in 2023/24
    • Graph 3: leading brands’ value sales in the retail tea market, 2021/22-23/24
    • Cadbury’s lead is eroded as volumes slump in 2023/24
    • Graph 4: leading brands’ value sales in the retail hot chocolate market, 2021/22-23/24
    • Horlicks grows values despite volume decline
    • Graph 5: leading brands’ value sales in the retail malted drinks market, 2021/22-23/24
    • Lipton continues to dominate RTD tea, but loses share
    • Graph 6: leading brands’ value sales in the retail RTD tea market, 2021/22-23/24
    • Inflation in tea has outpaced that for food and non-alcoholic drink in 2024
    • Graph 7: CPI annual rate, tea and all food and non-alcoholic drinks, 2019-24
    • What consumers want and why
    • Standard black tea remains the nation’s favourite cuppa
    • Graph 8: frequency of drinking tea and other hot drinks, 2024
    • Inspire consumers to create their own coffee shop-style teas at home
    • Graph 9: interest in products/concepts in tea and other hot drinks, 2024
    • Show young people drinking standard black tea to modernise its image
    • Graph 10: behaviours relating to tea, 2024
    • Raise awareness of tea’s blood sugar-friendly credentials
    • Graph 11: attitudes towards tea, 2024
    • Innovation and marketing
    • A surge in functional NPD in 2024
    • Graph 12: share of tea launches with functional claims and which are vitamin/mineral fortified, 2020-24
    • Sweet treat flavours, energy and cold tea formats have attracted attention
    • 2024 saw adspend drop back from its 2023 peak
    • Graph 13: above-the-line, online display and direct mail advertising on tea and other hot drinks, by advertiser, 2020-24
  2. MARKET DYNAMICS

    • Market size
    • Volume decline and inflation slows in 2024
    • Graph 14: retail market size for tea and other hot drinks, 2019-24
    • Rising prices keep value growth in double digits in 2024
    • Graph 15: annual change in retail sales of tea and other hot drinks, 2019-24
    • Market forecast
    • No end in sight for the long-term downward trend in volumes
    • Mounting competition from other drinks will continue to erode sales
    • Improving real incomes will present challenges and opportunities
    • Rising average prices will keep values rising
    • Value growth driven by inflation, premiumisation and trading up
    • Market segmentation
    • Volumes of ordinary tea bags continue to decline, all other segments post growth in 2024
    • Graph 16: retail volume sales of tea, by segment, 2022-24
    • Rising prices drive robust value growth across all tea segments
    • Graph 17: retail value sales of tea, by segment, 2022-24
    • Volume decline in hot chocolate and malted drinks accelerates in 2024
    • Graph 18: retail value sales of hot chocolate and malted drinks, by segment, 2022-24
    • Kombucha enjoys rapid growth, volumes of iced tea slip back in 2024
    • Graph 19: retail value sales of iced tea and kombucha, 2022-24
    • Graph 20: retail volume sales of iced tea and kombucha, 2022-24
    • One in five drink kombucha
    • Market share
    • Yorkshire Tea and own-label continue to post robust growth in 2023/24
    • Graph 21: leading brands’ value sales in the retail tea market, 2021/22-23/24
    • Typhoo posts stellar performance thanks to trading down
    • Sales of PG Tips continue to slide
    • Cadbury’s lead is eroded as volumes slump in 2023/24
    • Graph 22: leading brands’ value sales in the retail hot chocolate market, 2021/22-23/24
    • Horlicks grows values despite volume decline
    • Graph 23: leading brands’ value sales in the retail malted drinks market, 2021/22-23/24
    • Lipton continues to dominate RTD tea, but loses share
    • Graph 24: leading brands’ value sales in the retail RTD tea market, 2021/22-23.24
    • Macro-economic factors
    • Real wage growth continues, many consumers are still catching up
    • Graph 25: CPI inflation rate and total pay growth rate, 2021-24
    • One in four see their finances as ‘healthy’
    • Graph 26: the financial wellbeing index, 2016-24
    • Consumer confidence for the year ahead weakens in 2024
    • Graph 27: the financial confidence index, 2016-24
    • Inflation in tea has outpaced that for food and non-alcoholic drink in 2024
    • Graph 28: CPI annual rate, tea and all food and non-alcoholic drinks, 2019-24
    • Climate change will continue to put pressure on global tea prices
    • Cocoa prices soar due to decline in supply
    • Price rises drive trading down in tea
    • Flag up price per cup to emphasise value for money…
    • …and encourage trading up
    • Social and environmental factors
    • Interest in sustainability to gain ground as income pressures ease
    • Adopting climate-resilient tea farming will become more important
    • The profile of regenerative farming will continue to rise
    • Strong consumer interest in healthy eating
    • Graph 29: how often people try to eat healthily, 2018-24
    • Greater vigilance over caffeine intake
    • Graph 30: Google searches for caffeine, 2019-24
    • A stressed out nation
    • Spotlight on blood sugar should benefit tea
    • Graph 31: Google searches for blood sugar, 2022-24
    • Scrutiny on highly processed foods benefits tea
    • Increased alcohol moderation presents opportunities for tea
    • Graph 32: alcohol reduction and non-usage*, 2022-24
  3. WHAT CONSUMERS WANT AND WHY

    • Tea and other hot drinks usage
    • Tea and other hot drinks enjoy near-universal usage
    • Graph 33: overall usage of tea and other hot drinks, 2024
    • Standard black tea remains the nation’s favourite cuppa
    • Graph 34: frequency of drinking tea and other hot drinks, 2024
    • Under-35s are the core users of all teas other than standard black tea
    • Graph 35: overall usage of different types of tea, by age, 2024
    • Daily usage of standard black tea drops significantly among under-25s
    • Graph 36: usage of standard black tea at least once a day, by age, 2024
    • Interest in tea product products/concepts
    • A quarter of adults are interested in easy ways to make coffee shop-style tea at home
    • Graph 37: interest in products/concepts in tea and other hot drinks, 2024
    • Inspire consumers to create their own coffee shop-style teas at home
    • Forging associations with coffee shop teas will boost engagement with the young
    • Formats delivering convenient coffee shop-style teas
    • Drive awareness of the benefits of tea concentrates
    • Dilmah showcases the varied applications of its tea concentrates
    • Inspire tea drinkers with exciting serving suggestions
    • Serving suggestions to make tea more exciting need to be in the path of shoppers
    • Look to other categories for inspiration on recipe displays
    • Behaviours relating to tea
    • Half of young people don’t see people their age drinking standard tea in the media
    • Graph 38: behaviours relating to tea, 2024
    • Show young people drinking standard black tea to modernise its image
    • Messages around the power of the tea break should chime
    • Link the tea break to social interactions to help tackle loneliness in young adults
    • Tetley Tea’s campaign in Australia targeted Gen Z by encouraging chatter over a cuppa
    • Lean into the alcohol moderation trend
    • Tap into the leading reasons for drinking alcohol…
    • Graph 39: selected reasons for drinking alcohol, 2023
    • …with on-trend ingredients and less sweet flavours
    • Treat-based flavours and recipe inspiration can win over those seeking alcohol alternatives
    • Graph 40: interest in selected concepts in tea, by whether tea drinkers sometimes drink tea as an alternative to alcoholic drinks, 2024
    • Concept ideas combining treat/alcohol flavours with mood-boosting ingredients to target alcohol moderators
    • Attitudes towards tea
    • A quarter of adults think tea has a big impact on blood glucose; only 17% actively disagree
    • Graph 41: attitudes towards tea, 2024
    • Vigilance over blood sugar promotes tea usage
    • Graph 42: usage of different types of tea, but whether consumers try to avoid drinks that cause your blood glucose to rise quickly
    • Raise awareness of tea’s blood sugar-friendly credentials
    • Cold tea-based drinks can also benefit
    • Address barriers to decaf tea as efforts to reduce caffeine intake rise
    • Rising concerns over caffeine hamper tea usage
    • UPF concerns add to scepticism over decaffeination
    • Offer reassurance on decaffeination
    • The taste barrier to decaf tea also needs to be addressed
  4. INNOVATION AND MARKETING TRENDS

    • Launch activity and innovation
    • Sweet treat flavours continue to drive NPD
    • Leading black tea brands tap the sweet treat trend
    • Other drinks categories also provide flavour inspiration
    • PG Tips unveils premium blended black tea range
    • A surge in functional NPD in 2024
    • Graph 43: share of tea launches with functional claims and which are vitamin/mineral fortified, 2020-24
    • New brand Herbalistas taps interest in adaptogens and nootropics
    • Dirtea also heroes medicinal mushrooms
    • Companies look to less common functional claims
    • Graph 44: share of tea launches, by functional claims, 2020-24
    • Brands up the ante on energy
    • Matcha is having a moment
    • Graph 45: share of tea launches containing matcha in the product description, 2020-24
    • 2024 launches with matcha as the hero ingredient
    • Women’s health is a small but growing area within functionality
    • Brands continue to explore cold tea formats
    • A fallback in some on-pack sustainability claims
    • Graph 46: share of launches of tea and other hot drinks featuring selected sustainable claims, 2020-24
    • Typhoo goes bold with new ethical stance
    • Twinings launches RTD sparkling tea
    • NPD in other hot drinks is also inspired by sweet treats
    • More chocolate brands enter the hot chocolate market
    • The seasonal gifting market continues to be a focus, especially for own-label
    • Chocomel launches ready-to-heat hot chocolate
    • Advertising and marketing activity
    • 2024 saw adspend fall back from its 2023 peak
    • Graph 47: total above-the-line, online display and direct mail advertising on tea and other hot drinks, 2020-24
    • PG Tips was biggest spender in 2023 and 2024
    • Graph 48: total above-the-line, online display and direct mail advertising on tea and other hot drinks, by leading brands, 2020-24
    • PG Tips focuses on the power of the tea break
    • PG Tips It’s Not Just Tea, It’s Progress
    • Sarah Lancashire stars in Yorkshire Tea’s latest ‘Where Everything’s Done Proper’ ad
    • Yorkshire Tea’s ‘Investigations done proper’ TV ad
    • Yorkshire Tea launches The House of Caramelised Biscuit pop-up to support new flavour launch
    • Clipper highlights its natural and ethical credentials in biggest campaign to date
    • Clipper’s “There’s Tea, Then There’s GOOD Tea” campaign
    • Dalgety Herbal Tea debuts TV campaign
    • A “New way to tea” and a new way to advertise for Twinings
  5. APPENDIX

    • Advertising and marketing activity
    • ATL, online display and direct mail advertising expenditure on tea and other hot drinks, by advertiser
    • ATL, online display and direct mail advertising expenditure on tea and other hot drinks, by brand
    • Market segmentation
    • Retail value sales of tea and other hot drinks, by type
    • Retail volume sales of tea and other hot drinks, by type
    • Leading brands’ value sales and shares in the tea retail market, 2021/22-23/24
    • Leading brands’ value sales and shares in the tea retail market, 2021/22-23/24 (continued)
    • Leading brands’ volume sales and shares in the tea retail market, 2021/22-23/24
    • Leading brands’ volume sales and shares in the tea retail market, 2021/22-23/24 (continued)
    • Leading brand owners’ value sales and shares in the tea retail market, 2021/22-23/24
    • Leading brand owners’ volume sales and shares in the tea retail market, 2021/22-23/24
    • Leading brand’s value sales and shares in the hot chocolate retail market, 2021/22-23/24
    • Leading brand’s volume sales and shares in the hot chocolate retail market, 2021/22-23/24
    • Leading brand owners’ value sales and shares in the hot chocolate retail market, 2021/22-23/24
    • Leading brand owners’ volume sales and shares in the hot chocolate retail market, 2021/22-23/24
    • Leading brands’ value and volume sales and shares in the malted drinks retail market, 2021/22-23/24
    • Leading brand owners’ value and volume sales and shares in the malted drinks retail market, 2021/22-23/24
    • Leading brands’ value sales and shares in the RTD tea retail market, 2021/22-23/24
    • Leading brands’ volume sales and shares in the RTD retail market, 2021/22-23/24
    • Market forecast data and methodology
    • Market forecast for tea and other hot drinks
    • Market volume forecast for tea and other hot drinks
    • Market forecast and prediction intervals (value)
    • Market forecast and prediction intervals (volume)
    • Forecast methodology
    • Report scope and definitions
    • Market definition
    • Market definition (continued)
    • Abbreviations and terms
    • Consumer research methodology
    • Nielsen Ad Intel coverage

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