Table of Contents
Introduction
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- Definition
- Abbreviations
Executive Summary
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- The market
- Tea
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- Figure 1: UK retail value sales of tea, by sector, 2011
- Forecast
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- Figure 2: UK retail sales value of in-home tea, 2006-16
- Figure 3: UK retail sales of hot chocolate and malted drinks, 2006-16
- Market factors
- After three years of inflation, tea prices fall in 2011
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- Figure 4: Trends for annual % change in price (measured in Retail Price Index) for tea and coffee, Jan 2006-Nov 2011
- Coffee market grows, both in-home and out
- Tea as a staple should weather weak consumer outlook
- Companies, brands and innovation
- Reduced branded activity drags down overall NPD in 2011
- Advertising support jumps to recent record high in 2011
- PG Tips leads a competitive tea market
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- Figure 5: Brand value shares in the UK in-home tea market, 2011
- Cadbury and Horlicks share 40p in every £1 spent on hot chocolate
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- Figure 6: Brand value shares in the UK in-home hot chocolate and malted drinks market, 2011
- The consumer
- Tea is used by nearly nine in ten, although usage rates are struggling
- Standard tea suffers, usage of alternative teas edges up
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- Figure 7: Kinds of tea used, 2010-11
- Usage of hot chocolate and malted drinks wanes
- Attitudes towards standard tea
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- Figure 8: Attitudes towards standard tea, December 2011
- Attitudes towards fruit, herbal and green teas
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- Figure 9: Attitudes towards other teas, December 2011
- Attitudes towards hot chocolate and malted drinks
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- Figure 10: Attitudes towards hot chocolate and malted drinks, December 2011
- What we think
Issues in the Market
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- How can manufacturers rejuvenate usage of standard tea?
- How can loose leaf tea reinvigorate flagging consumer interest?
- How can fruit/herbal tea accelerate its frequency of usage?
- To what extent do hot chocolate manufacturers have to diversify offerings to accommodate older and younger generations?
Future Opportunities
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- Trend: Sense of the Intense
- Trend: Many Mes
Internal Market Environment
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- Key points
- After three years of inflation, tea prices fall in 2011
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- Figure 11: Trends for annual % change in price (measured in Retail Price Index) for tea and coffee, Jan 2006-Nov 2011
- Cocoa
- Tea – a healthy drink?
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- Figure 12: agreement with the statement ‘News on food influences my dietary habits,’ by socio economic group, 2011
- Rise in sleep disorders can benefit hot drinks market
- Afternoon tea makes a 21st century comeback, albeit with a slightly Oriental influence
Broader Market Environment
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- Key points
- Older population set for growth
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- Figure 13: Projected trends in population growth, by age, 2011-16
- Bleak outlook for consumer confidence
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- Figure 14: Monthly consumer confidence index, January 2007-December 2011
- Forecast increase in the UK birth rate could advance growth for decaff
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- Figure 15: Number of births, UK, 2005-15
Competitive Context
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- Key points
- Cold drinks dominate the non-alcoholic drinks market
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- Figure 16: Value sales for total non-alcoholic drinks, 2006-10
- Coffee market grows, both in-home and out
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- Figure 17: Total value sales of in-home coffee and coffee shops, 2006-11 (est)
- In-home coffee
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- Figure 18: Usage of coffee, 2010-11
- Out-of-home coffee
Strengths and Weaknesses
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- Strengths
- Weaknesses
Who’s Innovating?
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- Key points
- Overall NPD slumps in 2011
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- Figure 19: Share of tea NPD within the total UK drinks market NPD, 2007-11
- Figure 20: Total drinks NPD in the UK, by segment, 2011
- Asda leads NPD
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- Figure 21: Product launches within the UK tea market, by brand, 2010-11
- Standard tea dominates but camomile and fennel increase share
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- Figure 22: New product launches within the UK tea market, by flavour component, 2008-11
- Own-label narrows the gap on branded teas in 2011
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- Figure 23: NPD in the UK tea market, by private label, 2007-11
- Hot chocolate and malted drink NPD rises to recent high
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- Figure 24: Share of hot chocolate and malted drink NPD within the total UK drinks market, 2007-11
- Own-label also gains share in other hot drinks
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- Figure 25: NPD in the UK hot chocolate and malted drinks market, by private label, 2007-11
Market Size and Forecast
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- Key points
- The sales growth of tea stalls in 2011
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- Figure 26: UK retail value sales for in-home tea*, 2006-16
- Figure 27: UK retail volume sales for in-home tea, 2006-16
- Hot chocolate and malted drinks suffer from mild 2011
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- Figure 28: UK retail value sales for in-home hot chocolate and malted drinks, 2006-16
- Figure 29: UK retail volume sales for in-home hot chocolate and malted drinks, 2006-16
- The future of the tea and other hot drinks market
- Tea market forecast
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- Figure 30: UK retail value sales of in-home tea, 2006-16
- Hot chocolate and malted drinks market forecast
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- Figure 31: UK retail value sales of in-home hot chocolate and malted drinks, 2006-16
- Forecast methodology
Segment Performance
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- Key points
- Tea sales by sector
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- Figure 32: UK retail value sales of in home tea, by sector, 2009-11
- Ordinary bags
- Fruit and herbal bags
- Green bags
- Loose tea
- Hot chocolate and malted drink sales
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- Figure 33: UK retail value sales of hot chocolate and hot malted drink sectors, 2009-11
- Figure 34: Moving annual total volume sales of hot chocolate and malted drinks, October 2010-December 2011
Market Share
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- Key points
- PG Tips leads a competitive tea market
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- Figure 35: Brand shares in tea, 2011
- Figure 36: Brand shares and value sales in tea, 2009-11
- PG Tips
- Twinings
- Tetley
- Yorkshire tea
- Typhoo
- Own-brand
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- Figure 37: Brand shares and value sales in hot chocolate and malted drinks, 2010-11
Companies and Products
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- Cadbury/Kraft
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- Figure 38: Products launched by Cadbury in the UK hot beverages market between January 2011 and November 2011
- Associated British Foods
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- Figure 39: Products launched by Twinings in the UK tea and hot drinks market between January 2011 and November 2011
- GlaxoSmithKline
- Yorkshire Tea
- Tetley
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- Figure 40: Products launched by Tetley in the UK tea and hot drinks market between January 2011 and November 2011
- Unilever
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- Figure 41: Products launched by Unilever in the UK tea and hot drinks market between January 2011 and November 2011
Brand Research
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- Brand map
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- Figure 42: Attitudes towards and usage of tea brands, October 2011
- Correspondence analysis
- Brand attitudes
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- Figure 43: Attitudes by tea brand, October 2011
- Brand personality
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- Figure 44: Tea brand personality – macro image, October 2011
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- Figure 45: Tea brand personality – micro image, October 2011
- Brand experience
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- Figure 46: Tea brand usage*, October 2011
- Figure 47: Satisfaction with various tea brands, October 2011
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- Figure 48: Consideration of tea brands, October 2011
- Figure 49: Consumer perceptions of current tea brand performance, October 2011
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- Figure 50: Tea brand recommendation – Net Promoter Score, October 2011
- Brand index
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- Figure 51: Tea brand index, October 2011
- Figure 52: Tea brand index vs. recommendation, October 2011
- Target group analysis
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- Figure 53: Target groups, October 2011
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- Figure 54: Tea brand usage, by target groups, October 2011
- Group One – Conformists
- Group Two – Simply the Best
- Group Three – Shelf Stalkers
- Group Four – Habitual Shoppers
- Group Five – Individualists
Brand Communication and Promotion
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- Key points
- Total adspend rebounds in 2011
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- Figure 55: Main monitored media advertising expenditure on tea and other hot drinks, 2007-11
- Figure 56: Advertising expenditure in the UK tea and hot drinks market, by brand, 2007-11
- Investment in TV advertising rockets in 2011
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- Figure 57: Advertising expenditure in the UK tea and hot drinks market market, by media type, 2007-11
Channels to Market
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- Key points
- The big multiples dominate sales
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- Figure 58: Estimated retail distribution of tea and other hot drinks (excl. coffee), 2008-11
- Specialist tea shops are squeezed
Consumer Usage of Tea
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- Key points
- Nine in ten adults drink tea
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- Figure 59: Usage of tea (including herbal tea) in last 12 months, 2010-11
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- Figure 60: Types of tea used in the last 12 months, 2010-11
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- Figure 61: Types of hot drinks drunk in the past six months, December 2011
- Half the nation drink standard tea daily
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- Figure 62: Frequency of using English breakfast tea, December 2011
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- Figure 63: Usage of English breakfast tea, by age group, December 2011
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- Figure 64: Frequency of using English breakfast tea daily, by age group, December 2011
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- Figure 65: Heavy users** of English breakfast tea, by socio-economic group, December 2011
Consumer Usage of Alternative Teas and Other Hot Drinks
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- Key points
- Penetration of other hot drinks declines
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- Figure 66: Frequency of using other hot drinks, 2010-11
- 16-24s are top users of hot chocolate
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- Figure 67: Frequency of using hot chocolate, by age group, December 2011
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- Figure 68: Frequency of using hot malted drink/malted chocolate drink, by age group, December 2011
- Women and under-35s drive usage in fruit and herbal and green tea
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- Figure 69: usage of fruit/herbal and green tea in the last 12 months, by gender and age group, December 2011
Consumer – Tea Usage by Format
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- Key points
- Usage of tea bags declines
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- Figure 70: Types of tea used, 2010-11
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- Figure 71: Types of tea used, by age group, 2011
Consumer – Tea Drinking Occasions
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- Key points
- Nine in ten users brew up at home
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- Figure 72: Tea drinking occasions, December 2011
- Social tea drinking is geared towards women and over-55s
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- Figure 73: Tea drinking occasions, ‘At a friend/relative’s house’ and ‘At a café/restaurant,’ by gender and age group, December 2011
- The workplace is a crucial tea-drinking environment
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- Figure 74: Tea drinking occasions, ‘At work,’ by gender and age group, December 2011
Consumer – Attitudes Towards Tea
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- Key points
- Tea has the power to soothe and comfort
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- Figure 75: Attitudes towards standard tea, December 2011
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- Figure 76: Agreement with the statement ‘drinking tea is comforting,’ by gender and working status, December 2011
- Further potential for better quality and fair-trade teas…
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- Figure 77: Agreement with the statements ‘It is worth paying extra for tea with better quality leaves,’ and ‘I am prepared to pay more for fair-trade brands,’ by age group, December 2011
- Demand for more flavours dramatically divides the generations
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- Figure 78: Agreement with the statement ‘I would buy more standard tea if there were more exciting flavours (eg with a hint of vanilla),’ by gender and age group, December 2011
- English breakfast tea has a positive health image
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- Figure 79: Agreement with the statement ‘English breakfast tea is a healthy drink,’ by gender and age group, December 2011
- Own-label is looked favourably upon by users
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- Figure 80: Agreement with the statements ‘Own-label tea is as good as branded tea,’ and ‘I buy whatever tea brand is on special offer,’ by age group, December 2011
- Despite the popularisation of coffee culture, tea is not deemed less fashionable
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- Figure 81: Agreement with the statements ‘Drinking tea is not as fashionable as drinking coffee,’ and ‘I prefer the stronger hit of coffee to tea,’ by age group, December 2011
Consumer – Attitudes Towards Fruit/Herbal and Green Teas
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- Key points
- Lactose intolerance could benefit growth of infusion teas
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- Figure 82: Attitudes towards other teas, by demographics, December 2011
- Large minority are undecided as to the health benefits of fruit and herbal tea
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- Figure 83: Agreement with the statements ‘Fruit/herbal tea is better for your health than English breakfast tea,’ and ‘I believe in their claimed health benefits,’ by gender and age group, December 2011
- Negative perceptions among young and male consumers are limiting market growth
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- Figure 84: Agreement with the statement ‘They are mainly for women,’ by gender and age group, December 2011
- Dissatisfaction with flavour is restricting growth
Consumer – Attitudes Towards Hot Chocolate and Malted Drinks
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- Key points
- It may be more calorific, but hot chocolate made with milk is overwhelmingly the preferred choice
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- Figure 85: Attitudes towards hot chocolate and malted drinks, December 2011
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- Figure 86: Agreement with the statements ‘I prefer to drink hot chocolate made with milk,’ and ‘I drink hot chocolate as an occasional treat,’ by gender and age group, December 2011
- The sleep-inducing appeal of hot malted drinks resonates most among women and 45-54s
- Demand for spicier flavours in hot chocolate peaks among 16-24s
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- Figure 87: Agreement with the statement ‘I would buy more interesting flavours of hot chocolate (eg ginger, cinnamon),’ by gender and age groups, December 2011
- Hot chocolate is deemed unhealthy by under one in six
Consumer – Target Groups
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- Key points
- Four target groups
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- Figure 88: Target groups, December 2011
- Quality Checkers (25%)
- Coffee Lovers (25%)
- Ethicals (24%)
- Price-Leds (26%)
Appendix – Internal Market Environment
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- Figure 89: Agreement to lifestyle statements, by demographics, 2011
- Figure 90: Trends and projections in the UK population (‘000s), by age group, 2006-16
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Appendix – Market Size and Forecast
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- Figure 91: Best- and worst-case forecasts for UK retail value sales of in-home tea, by value, 2011-16
- Figure 92: Best- and worst-case forecasts for UK retail volume sales of in-home tea, by value, 2011-16
- Figure 93: Best- and worst-case forecasts for UK retail value sales of in-home hot chocolate and malted drinks, by value, 2011-16
- Figure 94: Best- and worst-case forecasts for UK retail volume sales of in-home hot chocolate and malted drinks, by value, 2011-16
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Appendix – Brand Research
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- Figure 95: Brand usage, October 2011
- Figure 96: Brand commitment, October 2011
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- Figure 97: Brand momentum, October 2011
- Figure 98: Brand diversity, October 2011
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- Figure 99: Brand satisfaction, October 2011
- Figure 100: Brand recommendation, October 2011
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- Figure 101: Brand attitude, October 2011
- Figure 102: brand image – macro image, October 2011
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- Figure 103: Brand image – micro image, October 2011
- Figure 104: Profile of target groups, by demographics, October 2011
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- Figure 105: Psychographic segmentation, by target group, October 2011
- Figure 106: Brand usage, by target group, October 2011
- Brand index
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- Figure 107: Brand index, October 2011
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Appendix – Consumer Usage of Tea
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- Figure 108: Usage of tea (including herbal tea) in last 12 months, by demographics, 2011
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- Figure 109: Kinds of tea used, by demographics, 2011
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- Figure 110: Frequency of usage of English breakfast tea, by demographics, December 2011
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- Figure 111: Types of tea used, by demographics, 2011
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Appendix – Usage of Other Hot Drinks
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- Figure 112: Frequency of using other hot drinks by demographics, 2011
- Figure 113: Frequency of usage of hot chocolate (using water or milk, by demographics, December 2011
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- Figure 114: Frequency of usage of hot malted drink/malted chocolate drink, by demographics, December 2011
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Appendix – Consumer – Tea Usage by Format
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- Figure 115: Types of tea used, by demographics, 2011
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Appendix – Tea Drinking Occasions
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- Figure 116: Tea drinking occasions, by demographics, December 2011
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Appendix – Consumer – Attitudes Towards Drinking Standard Tea
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- Figure 117: Agreement with the statements ‘Own-label tea is as good as branded tea’ and ‘It is worth paying extra for tea with better quality leaves’, by demographics, December 2011
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- Figure 118: Agreement with the statements ‘I am prepared to pay more for fair-trade brands’ and ‘Drinking tea is comforting’, by demographics, December 2011
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- Figure 119: Agreement with the statements ‘I would buy more standard tea if there were more exciting flavours’ and ‘Drinking tea is not as fashionable as drinking coffee’, by demographics, December 2011
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- Figure 120: Agreement with the statements ‘I buy whatever tea brand is on special offer’ and ‘English breakfast tea is a healthy drink’, by demographics, December 2011
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- Figure 121: Agreement with the statements ‘I would drink more loose-leaf tea if I had the time to prepare it’ and ‘I prefer the stronger hit of coffee to tea’, by demographics, December 2011
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Appendix – Attitudes Towards Other Teas
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- Figure 122: Agreement with the statements ‘Fruit/herbal tea is better for your health than English breakfast tea’ and ‘I enjoy experimenting with different flavours of fruit/herbal tea’, by demographics, December 2011
- Figure 123: Agreement with the statements ‘Fruit/herbal teas are worth the extra cost’ and ‘They tend not to require milk unlike other hot drinks’, by demographics, December 2011
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- Figure 124: Agreement with the statements ‘Compared with tradition English breakfast tea, fruit tea tastes too bitter’ and ‘They are mainly for women’, by demographics, December 2011
- Figure 125: Agreement with the statements ‘I believe in their claimed health benefits’ and ‘I have drunk less of these in the past year to save money’, by demographics, December 2011
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- Figure 126: Agreement with the statements ‘Fruit tea smells nice buts doesn’t really taste of anything’, by demographics, December 2011
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Appendix – Attitudes Towards Hot Chocolate and Malted Drinks
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- Figure 127: Most popular attitudes towards hot chocolate and malted drinks, by demographics, December 2011
- Figure 128: Next most popular attitudes towards hot chocolate and malted drinks, by demographics, December 2011
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Appendix – Target Groups
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- Figure 129: Attitudes towards standard/English breakfast tea, by target group, December 2011
- Figure 130: Attitudes towards standard/English breakfast tea, by target group, December 2011
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- Figure 131: Tea drinking occasions, by target group, December 2011
- Figure 132: Attitudes towards other teas, by target group, December 2011
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- Figure 133: Attitudes towards hot chocolate and malted drinks, by target group, December 2011
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