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Tea and Other Hot Drinks - UK - July 2019

Covered in this report

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. Black tea usually has a rich taste, which means it is suited to being served with milk and sugar.
  • Decaffeinated tea refers to black tea that has been through a process to remove most of the caffeine content.
  • Speciality tea refers to higher-quality tea and named blend teas. 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. 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.

“With tea and hot chocolate continuing to suffer from competition from coffee and soft drinks, brands in these categories need to look to new formats and more variety to tempt younger people who have a wide repertoire of drinks. Products focused on health and wellbeing, those meeting different needstates at different times of day, and cold versions of hot drinks all hold potential for growing sales.”
– Richard Caines, Senior Food and Drink Analyst

This Report will cover the following areas:

  • Focus on health and wellbeing benefits will encourage trading up
  • New formats and more variety will help hot drink brands grow sales
  • Ethical considerations warrant continuing attention

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Table of contents

  1. Overview

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

          • The market
            • Tea sales continue long-term volume decline
              • Figure 1: UK retail value sales of tea, 2014-24
            • Sales of ordinary tea bags continue to decline
              • Green tea stagnates, fruit and herbal grows
                • Sales of hot chocolate and malted drinks depressed
                  • Companies and brands
                    • Twinings and Yorkshire Tea make gains
                      • Figure 2: Leading brands’ value shares in the tea market, 2018/19*
                    • Mars grows sales of chocolate-branded hot chocolate
                      • Figure 3: Leading brands’ value shares in the hot chocolate market, 2018/19*
                    • Horlicks and Ovaltine dominate malted drinks
                      • Cold infusions tap interest in drinks with less sugar
                        • New and novel flavours are a continuing focus of NPD
                          • Brands tapping into growth of pods in coffee
                            • Functional benefits remain a big focus in tea
                              • The consumer
                                • Eight in 10 UK adults drink tea
                                  • Figure 4: Frequency of drinking tea, by tea type, May 2019
                                • Hot chocolate is more of a rare treat
                                  • Tea buyers are becoming more experimental
                                    • Free samples would encourage four in 10 to buy different tea
                                      • Figure 5: Prompts that would encourage people to buy a different tea type/brand, May 2019
                                    • Price and promotions have biggest influence on choice
                                      • Figure 6: Most important factors influencing choice when buying one tea type/brand over another, May 2019
                                    • Natural benefits valued more than added vitamins/minerals
                                      • Figure 7: Attributes worth paying more for when buying tea, May 2019
                                    • Strong interest in tea offering health and wellness benefits
                                      • Figure 8: Interest in health/functional benefits provided by tea, May 2019
                                    • More room to market teas for different times of day
                                      • Interest in cold teas will help add sales for tea brands
                                        • Pods offer a way of boosting hot chocolate and malt drinks
                                          • Figure 9: Attitudes towards tea and other hot drinks, May 2019
                                        • What we think
                                        • Issues and Insights

                                          • Focus on health and wellbeing benefits will encourage trading up
                                            • The facts
                                              • The implications
                                                • New formats and more variety will help hot drink brands grow sales
                                                  • The facts
                                                    • The implications
                                                      • Ethical considerations warrant continuing attention
                                                        • The facts
                                                          • The implications
                                                          • The Market – What You Need to Know

                                                            • Tea sales continue long-term volume decline
                                                              • Flat value sales, but falling volumes predicted for tea
                                                                • Sales of hot chocolate and malted drinks depressed
                                                                  • Sales of ordinary tea bags continue to decline
                                                                    • Green tea stagnates, fruit and herbal grows
                                                                      • Competition to tea from coffee and soft drinks
                                                                        • Brexit uncertainties make price trends difficult to predict
                                                                          • Strong interest in health and wellbeing
                                                                            • Few younger people will limit growth in tea sales
                                                                              • Tastes of growing number of over-55s likely to gradually change
                                                                              • Market Size and Forecast

                                                                                • Tea sales continue long-term volume decline
                                                                                  • Figure 10: UK retail value and volume sales of tea, 2014-24
                                                                                • Flat value sales, but falling volumes predicted
                                                                                  • Figure 11: UK retail value sales of tea, 2014-24
                                                                                • Sales of hot chocolate and malted drinks depressed
                                                                                  • Figure 12: UK retail value and volume sales of hot chocolate and malted drinks, 2014-24
                                                                                • Further decline in value and volume sales predicted
                                                                                  • Figure 13: UK retail value sales of hot chocolate and malted drinks, 2013-23
                                                                                • Forecast methodology
                                                                                • Market Segmentation

                                                                                  • Sales of ordinary tea bags continue to decline
                                                                                    • Green tea stagnates, fruit and herbal in strong growth
                                                                                      • Figure 14: UK retail value and volume sales of tea, by segment, 2016-18
                                                                                    • Further decline for hot chocolate and malted drinks
                                                                                      • Figure 15: UK retail value and volume sales of hot chocolate and hot malted drinks, by segment, 2016-18
                                                                                    • Big increase in sales of RTD iced teas from a modest base
                                                                                      • Figure 16: UK retail value and volume sales of iced tea, 2016-18
                                                                                  • Market Drivers

                                                                                    • Competition to tea from coffee and soft drinks
                                                                                      • Cold tea infusions offer healthy hydration
                                                                                        • Blurring of boundaries between tea and soft drinks
                                                                                          • Brexit uncertainties make price trends difficult to predict
                                                                                            • Strong interest in health and wellbeing
                                                                                              • Sustainable practices from growing to waste disposal warrant attention
                                                                                                • Few younger people will limit growth in tea sales
                                                                                                  • Figure 17: Trends in the age structure of the UK population, 2013-23
                                                                                              • Companies and Brands – What You Need to Know

                                                                                                • Twinings and Yorkshire Tea make gains
                                                                                                  • Mars grows sales of chocolate-branded hot chocolate
                                                                                                    • Horlicks and Ovaltine dominate malted drinks
                                                                                                      • Cold infusions tap interest in drinks with less sugar
                                                                                                        • New and novel flavours are a continuing focus of NPD
                                                                                                          • Few examples of added flavours in hot chocolate
                                                                                                            • Brands tapping into growth of pods in coffee
                                                                                                              • Maximising the appeal of tea drinking throughout the day
                                                                                                                • Functional benefits remain a big focus in tea
                                                                                                                  • New launches of vitamin teas in 2019
                                                                                                                  • Market Share

                                                                                                                    • Twinings and Yorkshire Tea make gains
                                                                                                                      • Figure 18: Leading brands’ value sales and shares in the tea market, 2017/18 and 2018/19
                                                                                                                      • Figure 19: Leading brands’ volume sales and shares in the tea market, 2017/18 and 2018/19
                                                                                                                    • Mars grows sales of its chocolate-branded hot chocolate
                                                                                                                      • Figure 20: Leading brands’ value and volume sales and shares in the hot chocolate market, 2017/18 and 2018/19
                                                                                                                    • Horlicks and Ovaltine dominate malted drinks
                                                                                                                      • Figure 21: Leading brands’ value and volume sales and shares in the malted drinks market, 2017/18 and 2018/19
                                                                                                                  • Start-ups and Disruptors Case Study – OMGTea

                                                                                                                    • Company Overview
                                                                                                                      • Website
                                                                                                                        • What is it?
                                                                                                                          • Figure 22: OMGTea, June 2019
                                                                                                                        • Company mission statement
                                                                                                                          • Founder’s story
                                                                                                                            • Sources of funding and support
                                                                                                                              • Mintel analyst view
                                                                                                                                • Mintel Trends
                                                                                                                                  • Why it could succeed
                                                                                                                                    • Why it could fail
                                                                                                                                      • The verdict
                                                                                                                                        • Product information
                                                                                                                                          • Figure 23: Examples of OMGTea product listing, June 2019
                                                                                                                                          • Figure 24: OMGTea product launches, 2014-19
                                                                                                                                        • Purchase Intelligence
                                                                                                                                          • OMGTea Iced Matcha Citrus
                                                                                                                                            • Figure 25: Perception of OMGTea Iced Matcha Citrus compared to similar Matcha tea launches, April 2018-June 2019
                                                                                                                                          • OMGTea Organic Matcha
                                                                                                                                            • Figure 26: Perception of OMGTea Organic Matcha AAA Grade Single Serve 14-Pack compared to similar selected Matcha tea launches, April 2018-June 2019
                                                                                                                                          • Product stockists
                                                                                                                                            • Media profile
                                                                                                                                              • Social media metrics
                                                                                                                                                • Figure 27: Social media metrics for OMGTea as of June 2019
                                                                                                                                            • Start-ups and Disruptors Case Study – TEA+

                                                                                                                                              • Company overview
                                                                                                                                                • Website
                                                                                                                                                  • What is it?
                                                                                                                                                    • Figure 28: Example of Tea+ product, February 2019
                                                                                                                                                  • Founded:
                                                                                                                                                    • Company mission statement:
                                                                                                                                                      • Founder’s Story:
                                                                                                                                                        • Sources of funding and support
                                                                                                                                                          • Mintel analyst view
                                                                                                                                                            • Mintel Trends
                                                                                                                                                              • Why it could succeed
                                                                                                                                                                • Why it could fail
                                                                                                                                                                  • The verdict
                                                                                                                                                                    • Product information
                                                                                                                                                                      • Figure 29: Selected examples of Tea+ products, May 2019
                                                                                                                                                                      • Figure 30: Samples of Tea+ launches, November 2018
                                                                                                                                                                    • Purchase Intelligence
                                                                                                                                                                      • Figure 31: Perception map of attribute performance of Tea+ in comparison to 41 other herbal and fruit tea bags, April 2018-May 2019
                                                                                                                                                                    • Product stockists
                                                                                                                                                                      • Media profile
                                                                                                                                                                        • Social media metrics
                                                                                                                                                                          • Figure 32: Social media metrics for Tea+ as of May 2019
                                                                                                                                                                      • Launch Activity and Innovation

                                                                                                                                                                        • More products launch for making cold tea
                                                                                                                                                                          • Cold infusions tap interest in drinks with less sugar
                                                                                                                                                                            • Figure 33: Examples of cold tea infusions launches, 2018/19
                                                                                                                                                                          • Cold tea infusions beat other teas on instant reaction
                                                                                                                                                                            • Figure 34: Perception map of attribute performance of cold tea infusions in comparison to other tea launches in the UK tea market, April 2018-June 2019
                                                                                                                                                                          • Twinings has the two most appealing cold tea infusions
                                                                                                                                                                            • New and novel flavours are a continuing focus of NPD
                                                                                                                                                                              • Figure 35: Examples of seasonal launches in tea, 2018/19
                                                                                                                                                                            • Few examples of added flavours in hot chocolate
                                                                                                                                                                              • Figure 36: Examples of added flavours and dark chocolate in new launches of hot chocolate, 2018/19
                                                                                                                                                                            • Turmeric and other spices are a theme in hot drinks launches
                                                                                                                                                                              • Figure 37: Examples of launches in malted and other beverages with turmeric and other spices, 2018/19
                                                                                                                                                                            • Brands tapping into growth of pods in coffee
                                                                                                                                                                              • Figure 38: Examples of new pod launches in hot chocolate, 2018/19
                                                                                                                                                                            • Maximising the appeal of tea drinking throughout the day
                                                                                                                                                                              • Figure 39: Examples new tea launches for different times of the day, 2018/19
                                                                                                                                                                            • Variety packs continue to target those drinking a repertoire of teas
                                                                                                                                                                              • Figure 40: Examples of new tea launches offering variety packs, 2018/19
                                                                                                                                                                            • Functional benefits remain a big focus in tea
                                                                                                                                                                              • Figure 41: New product launches in the UK tea market, by claim category, 2014-19
                                                                                                                                                                              • Figure 42: Examples of new tea launches assigned stress and sleep functional claim and focused on mood and the senses, 2018/19
                                                                                                                                                                            • New launches of vitamin teas in 2019
                                                                                                                                                                              • Figure 43: Examples of new tea launches making vitamin claims, 2018/19
                                                                                                                                                                          • Advertising and Marketing Activity

                                                                                                                                                                            • Steep decline in main media advertising spending
                                                                                                                                                                              • Figure 44: Total above-the-line, online display and direct mail advertising expenditure on tea and other hot drinks, 2015-19
                                                                                                                                                                            • Taylors of Harrogate the biggest advertiser
                                                                                                                                                                              • Figure 45: Total above-the-line, online display and direct mail advertising expenditure on tea and other hot drinks, by advertiser, 2015-19
                                                                                                                                                                            • Twinings appoints M&C Saatchi
                                                                                                                                                                              • PG Tips launches ‘Cuppas Taste Better Together’ campaign
                                                                                                                                                                                • Horlicks pushes relaxation and nutrition message
                                                                                                                                                                                  • Nielsen Ad Intel coverage
                                                                                                                                                                                  • The Consumer – What You Need to Know

                                                                                                                                                                                    • Eight in 10 UK adults drink tea
                                                                                                                                                                                      • Drinking of speciality, green and herbal/fruit shows younger bias
                                                                                                                                                                                        • Hot chocolate is more of a rare treat
                                                                                                                                                                                          • Tea buyers are becoming more experimental
                                                                                                                                                                                            • Free samples would encourage four in 10 to buy different tea
                                                                                                                                                                                              • Natural benefits valued more than added vitamins/minerals
                                                                                                                                                                                                • Strong interest in tea offering health and wellness benefits
                                                                                                                                                                                                  • More room to market teas for different times of day
                                                                                                                                                                                                    • Interest in cold teas will help add sales for tea brands
                                                                                                                                                                                                      • Pods offer a way of boosting hot chocolate and malt drinks
                                                                                                                                                                                                      • Drinking Habits – Tea and Other Hot Drinks

                                                                                                                                                                                                        • Eight in 10 UK adults drink tea
                                                                                                                                                                                                          • Figure 46: Frequency of drinking tea, by tea type, May 2019
                                                                                                                                                                                                        • Speciality, green and fruit/herbal teas drinkers are younger and more affluent
                                                                                                                                                                                                          • Figure 47: Usage of speciality, green or fruit/herbal teas, by age, May 2019
                                                                                                                                                                                                        • Young people drink a wider range of teas
                                                                                                                                                                                                          • Figure 48: Number of different types of tea drunk in the last month, May 2019
                                                                                                                                                                                                        • Hot chocolate is more of a rare treat
                                                                                                                                                                                                          • Figure 49: Frequency of drinking hot chocolate and malted drinks, May 2019
                                                                                                                                                                                                      • Factors Influencing Choice of Tea

                                                                                                                                                                                                        • Tea buyers are becoming more experimental
                                                                                                                                                                                                          • Figure 50: Sticking to one tea product vs buying different tea products, May 2019
                                                                                                                                                                                                        • Free samples would encourage four in 10 to buy different tea
                                                                                                                                                                                                          • Free samples have more sway with women, younger age groups are most open to trial
                                                                                                                                                                                                            • Figure 51: Prompts that would encourage people to buy a different tea type/brand, May 2019
                                                                                                                                                                                                          • Price and promotions have biggest influence on choice
                                                                                                                                                                                                            • Strong flavour and health benefits have notable sway
                                                                                                                                                                                                              • Figure 52: Most important factors influencing choice when buying one tea type/brand over another, May 2019
                                                                                                                                                                                                          • Attributes Worth Paying More for When Buying Tea

                                                                                                                                                                                                            • Natural benefits valued more than added vitamins/minerals
                                                                                                                                                                                                              • Figure 53: Attributes worth paying more for when buying tea, May 2019
                                                                                                                                                                                                            • A third of buyers are willing to pay more for plastic-free tea bags
                                                                                                                                                                                                              • Tea brands also need to tap wider ethical concerns, with sustainable farming first
                                                                                                                                                                                                              • Interest in Functional Benefits in Tea

                                                                                                                                                                                                                • Strong interest in teas offering health and wellness benefits
                                                                                                                                                                                                                  • Figure 54: Interest in health/functional benefits provided by tea, May 2019
                                                                                                                                                                                                                • Nearly three in 10 interested in de-stressing/calming benefits
                                                                                                                                                                                                                  • Digestive health benefits interest more than a quarter of tea drinkers
                                                                                                                                                                                                                  • Attitudes towards Tea and Other Hot Drinks

                                                                                                                                                                                                                    • More room to market teas for different times of day
                                                                                                                                                                                                                      • Gifting opportunities
                                                                                                                                                                                                                        • Figure 55: Attitudes towards tea and other hot drinks, May 2019
                                                                                                                                                                                                                      • Interest in cold teas will help add sales for tea brands
                                                                                                                                                                                                                        • Cold tea infusions tap interest in healthier hydration
                                                                                                                                                                                                                          • Cold-brew tea currently niche but offers different flavour profiles
                                                                                                                                                                                                                            • Innovation is needed in hot chocolate and malted drinks
                                                                                                                                                                                                                              • More extra dark chocolate and added flavours are in demand
                                                                                                                                                                                                                                • Malted drinks need to push their source of nutrition credentials to stake a claim for starting the day
                                                                                                                                                                                                                                  • Pods offer a way of boosting hot chocolate and malt drinks
                                                                                                                                                                                                                                  • Usage of RTD Cold Tea

                                                                                                                                                                                                                                    • A fifth of people drink RTD cold teas
                                                                                                                                                                                                                                      • Figure 56: Drinking of ready-to-drink cold tea in the last month, May 2019
                                                                                                                                                                                                                                  • Appendix – Data Sources, Abbreviations and Supporting Information

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

                                                                                                                                                                                                                                            • Figure 57: UK retail volume sales of tea, 2014-24
                                                                                                                                                                                                                                            • Figure 58: Best- and worst-case forecast of total UK retail value sales of tea, 2019-24
                                                                                                                                                                                                                                            • Figure 59: Best- and worst-case forecast of total UK retail volume sales of tea, 2019-24
                                                                                                                                                                                                                                            • Figure 60: UK retail volume sales of hot chocolate and malted drinks, 2014-24
                                                                                                                                                                                                                                            • Figure 61: Best- and worst-case forecast of total UK retail value sales of hot chocolate and malted drinks, 2019-24
                                                                                                                                                                                                                                            • Figure 62: Best- and worst-case forecast of total UK retail volume sales of hot chocolate and malted drinks, 2019-24
                                                                                                                                                                                                                                          • Forecast methodology
                                                                                                                                                                                                                                          • Appendix – Market Share

                                                                                                                                                                                                                                              • Figure 63: Leading manufacturers’ value and volume sales and shares in the tea market, 2017/18 and 2018/19
                                                                                                                                                                                                                                              • Figure 64: Leading manufacturers’ value and volume sales and shares in the hot chocolate market, 2017/18 and 2018/19
                                                                                                                                                                                                                                              • Figure 65: Leading manufacturers’ value and volume sales and shares in the malted drinks market, 2017/18 and 2018/19
                                                                                                                                                                                                                                          • Appendix – Launch Activity and Innovation

                                                                                                                                                                                                                                              • Figure 66: New product launches in the UK tea market, by claim (sorted by 2018), 2014-19
                                                                                                                                                                                                                                              • Figure 67: New product launches in the UK tea market, by company (top 20 sorted by 2018), 2014-19
                                                                                                                                                                                                                                              • Figure 68: New product launches in the UK tea market, by branded and private label, 2014-19
                                                                                                                                                                                                                                              • Figure 69: New product launches in the UK malted and other hot beverages market, by branded and private label, 2014-19
                                                                                                                                                                                                                                              • Figure 70: New product launches in the UK malted and other hot beverages market, by company (top 10 sorted by 2018), 2014-19
                                                                                                                                                                                                                                              • Figure 71: New product launches in the UK malted and other hot beverages market, by claim (top 20 sorted by 2018), 2014-19
                                                                                                                                                                                                                                              • Figure 72: New product launches in the UK malted and other hot beverages market, by claim category, 2014-19
                                                                                                                                                                                                                                              • Figure 73: Attribute performance of cold tea infusions in comparison to other tea in the UK tea market, April 2018-June 2019

                                                                                                                                                                                                                                          Tea and Other Hot Drinks - UK - July 2019

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