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UK Tea and Other Hot Drinks market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Tea and Other Hot Drinks market, its consumers and the major players who make up that market.

Market

Point of sale market data

In conjunction with IRi, extensive point of sale data shows you what consumers are spending their money on

Market Size

How big is the market today and what is our 5 year forecast? Includes both best & worst case scenarios

Market Segmentation

What are the different segments within the market and how are those individual segments performing?

Consumer

Consumer behaviors

What are consumers looking for, what drives their buying habits and what are their main purchase influencers?

Demographic breakdown

From iGen & Millennials to Baby Boomers & beyond. Who is spending money and what are they spending it on?

Representative sample

We gather our data from real-world consumers, selected to accurately reflect precise global demographics

Players

Company strategy

What are the key players doing, what has been successful for them and what was their marketing spend?

Product innovation

Using data from our Global New Product Database, what products were launched and how well were they perceived?

Opportunities

What happens next, which areas are likely to experience growth and what opportunities exist within the market?

Expert analysis from a specialist in the field

Written by Anita Winther, a leading analyst in the Food & Drink sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

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

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

This report discusses the following key topics:

Products covered in this Report

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. 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.

Excluded:

This Report excludes teas and other hot drinks sold through catering outlets (ie cafés, restaurants, pubs) or vending machines. It also excludes all iced teas and RTD (ready-to-drink) teas. Coffee is excluded and is examined in Mintel’s Coffee – UK, August 2017 Report.

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Table of contents

  1. Overview

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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