Table of Contents
Executive Summary
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- The market
- The future
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- Figure 1: UK retail value sales and forecast for the tea*, hot chocolate and hot malted drinks market, 2009-19
- Market factors
- Tea consumption is in long-term decline
- Climate change could negatively impact tea yields
- Slower growth of the 15-34 age group could limit tea’s growth
- Companies, brands and innovation
- Unilever holds over a quarter of the UK retail tea market by value
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- Figure 2: Estimated manufacturer shares in the UK retail tea market, by value, 2013/14*
- Own-label’s share of NPD reaches a four-year high
- Adspend falls for a second year
- The consumer
- Four in five Brits drink tea
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- Figure 3: Consumption of tea, hot chocolate and hot malted drinks, April/May 2014
- A well-known brand is the most important factor in tea drinkers’ choice
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- Figure 4: Factors considered when buying tea, April/May 2014
- Tea is seen as a good option to curb hunger between meals
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- Figure 5: Attitudes towards tea, April/May 2014
- Smaller teabags interest a quarter of users
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- Figure 6: Attitudes towards teabags, April/May 2014
- New flavours of malted drinks interest a third of users
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- Figure 7: Attitudes towards hot chocolate and malted drinks, April/May 2014
- What we think
Issues and Insights
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- Higher-caffeine tea has scope to compete with coffee
- The facts
- The implications
- Black tea with added health benefits appeals to half of tea drinkers
- The facts
- The implications
- New hot chocolate formats should add value to the category
- The facts
- The implications
Trend Application
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- Extend My Brand
- Help Me Help Myself
- Minimize Me
Market Drivers
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- Key points
- Tea consumption is in long-term decline
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- Figure 8: UK household purchases of coffee and tea, 1974-2012
- Climate change threatens long-term production in tea-producing regions
- Tea brands should do more to position tea as an alternative to alcohol
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- Figure 9: Trends in UK per capita consumption of 100% alcohol, 2000-13
- Slower growth of the 15-34 age group could affect growth of tea
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- Figure 10: Trends in the age structure of the UK population, 2009-14 and 2014-19
- Warm weather in 2013 puts pressure on tea sales
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- Figure 11: Hours of sunshine in the UK, by month, 2008-14
Strengths and Weaknesses
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- Strengths
- Weaknesses
Who’s Innovating?
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- Key points
- Teabags accounted for nine in 10 new launches in the tea category in 2013
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- Figure 12: New product launches in the UK tea market, by format type, 2010-13
- Own-label accounts for two in five new launches in 2013
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- Figure 13: NPD in the UK tea market, by own-label and brands, 2010-13
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- Figure 14: New product launches in the UK tea market, by top 10 ultimate companies, 2010-13
- Ethical claims continue to gain ground
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- Figure 15: New product launches in the UK tea market, by top 10 claims, 2010-13
- Strong growth in caffeine-free and premium variants
- Flavoured teas gain share in new launches
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- Figure 16: New product launches in the UK tea market, by top 10 flavour components, 2010-13
- Functional claims feature on minority of launches
- New formats and ones to watch
- Matcha tea
- Teabags for cold water
- Tea pods/sticks
- Brands accounted for four in five new launches in hot chocolate and malted drinks in 2013
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- Figure 17: New product launches in the UK malt and other hot beverages market, by top 10 ultimate companies, 2010-13
- Manufacturers look to liquids to make mixing teas and hot chocolates easier and quicker
- Hot chocolate takes cues from the chocolate confectionery market with ‘additions’
Market Size and Forecast
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- Key points
- Value growth expected to accelerate while volume decreases should ease
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- Figure 18: UK retail sales value and volumes for the tea*, hot chocolate and hot malted drinks market, 2009-19
- Figure 19: UK retail value sales and forecast for the tea*, hot chocolate and hot malted drinks market, 2009-19
- Tea value sales will grow with volumes set to post a sluggish performance
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- Figure 20: UK retail value and volume sales of tea*, 2009-19
- Figure 21: UK retail value sales and forecast for tea*, 2009-19
- Hot chocolate and malted drinks volumes to fall whilst value remains flat
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- Figure 22: UK retail value and volume sales for the hot chocolate and hot malted drinks market, 2009-19
- Figure 23: UK retail value sales and forecast for the hot chocolate and hot malted drinks market, 2009-19
- Methodology
Segment Performance
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- Key points
- Ordinary teabags continue to decline while green, fruit and herbal rocket
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- Figure 24: UK retail value sales of tea, by segment, 2011-13
- Figure 25: UK retail volume sales of tea, by segment, 2011-13
- Ordinary teabags struggle
- Strong growth in other segments
- Hot chocolate leaps ahead while malted drinks continue their decline
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- Figure 26: UK retail value sales of hot chocolate and hot malted drinks, by segment, 2011-13
- Figure 27: UK retail volume sales of hot chocolate and hot malted drinks, by sector, 2011-13
Market Share
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- Key points
- Unilever accounts for over a quarter of UK tea sales
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- Figure 28: Top five manufacturers’ sales and shares in the UK tea market, by value and volume, 2012/13 and 2013/14
- PG Tips leads the market but Twinings sees fastest value growth
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- Figure 29: Top five brands’ sales and shares in the UK tea market, by value and volume, 2012/13 and 2013/14
- Cadbury brands dominate the hot chocolate market
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- Figure 30: Top five brands’ sales and shares in the UK hot chocolate market, by value and volume, 2012/13 and 2013/14
- Malted drinks sector sees market decline
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- Figure 31: Leading brands’ sales and shares in the UK malted drinks market, by value and volume, 2012/13 and 2013/14
Companies and Products
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- Apeejay (Typhoo)
- Background
- Product range
- Product innovation
- Advertising and promotion
- Associated British Foods (Twinings, Options, Ovaltine)
- Background
- Product range
- Product Innovation
- Advertising and promotion
- GlaxoSmithKline (Horlicks)
- Background
- Product range
- Product innovation, advertising and promotion
- Mondelēz International (Cadbury)
- Background
- Product range
- Product innovation, advertising and promotion
- Taylors of Harrogate (Yorkshire Tea)
- Background
- Product range
- Product innovation
- Advertising and promotion
- Tata Global Beverages (Tetley)
- Background
- Product range
- Product innovation
- Product advertising and promotion
- Unilever (PG Tips, Lipton)
- Background
- Product range
- Product innovation
- Advertising and promotion
Brand Communication and Promotion
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- Key points
- Adspend falls below £20 million after second consecutive year of decline
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- Figure 32: Main monitored media advertising expenditure in the UK tea and hot drinks market, 2010-14
- Taylors of Harrogate overtakes Unilever for highest adspend in 2013
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- Figure 33: Main monitored advertising expenditure in the UK tea and hot drinks market, by top five advertisers, 2010-14
- Twinings aims to corner premium and mainstream sectors
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- Figure 34: Main monitored advertising expenditure in the UK tea and hot beverages market (excluding coffee), by top five brands, 2013
- TV adspend falls while outdoor gains
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- Figure 35: Main monitored advertising expenditure in the UK tea and hot drinks market, by media type, 2010-14
- Brands also look for visibility on social media
Channels to Market
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- Key points
- Supermarkets account for two thirds of sales of soft drinks
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- Figure 36: Estimated consumer spending on soft drinks (including tea and other hot drinks), by type of retailer, 2013
- Specialists work hard to carve out a point of difference in the market
- Various brands look online
The Consumer – Frequency of Usage
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- Key points
- Five in every six consumers drink tea
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- Figure 37: Consumption of tea, hot chocolate and hot malted drinks, April/May 2014
- Standard tea leads by usage
- Fruit and herbal teas chime with women
- Indulgent image limits hot chocolate usage
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- Figure 38: Frequency of consumption of tea, hot chocolate and malted drinks, April/May 2014
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- Figure 39: Repertoire of usage of tea, April/May 2014
The Consumer – Factors Considered when Buying Tea
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- Key points
- A well-known brand is the most widely noted as important in tea choice
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- Figure 40: Factors considered when buying tea, April/May 2014
- Younger cohorts are less interested in brands
- More users consider low prices important than price promotions
- Less than one in five users see ethics as important when buying tea
- A fifth of users see a clear regional British heritage as important in tea
- Brands rebrand to tap into regional interest
The Consumer – Attitudes Towards Tea
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- Key points
- Tea is widely seen as a good option to curb hunger between meals
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- Figure 41: Attitudes towards tea, April/May 2014
- Tea is deemed a good alternative to alcohol on a night in
- Other markets can offer inspiration for marketing
- Links with chocolate can support treat proposition
- Flavours tailored for the seasons interest over a third of tea users
- Packaging can highlight seasonal positioning
- Tea pods spark interest among a third of tea users
The Consumer – Attitudes Towards Teabags
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- Key points
- Smaller teabags interest a quarter of standard tea users
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- Figure 42: Attitudes towards teabags, April/May 2014
- Liquid tea concentrates interest one in seven
- One in 10 would pay more for teabags made from a better quality material
The Consumer – Attitudes Towards Hot Chocolate and Hot Malted Drinks
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- Key points
- New flavours of malted drinks interest a third of users
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- Figure 43: Attitudes towards hot chocolate and malted drinks, April/May 2014
- Over a quarter of users think that powdered hot chocolate does not dissolve well
- Liquid formats could take cues from other markets
- Hot chocolate flavoured with alcohol interests a quarter of adults
- Fortified hot chocolates would appeal to one in four
Appendix – Market Size and Forecast
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- Figure 44: Best and worst case forecasts for the total UK tea*, hot chocolate and hot malted drinks market, by value, 2014-19
- Figure 45: Best and worst case forecasts for the total UK tea* hot chocolate and hot malted drinks market, by volume, 2014-19
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- Figure 46: UK retail volume sales and forecast for the tea*, hot chocolate and hot malted drinks market, 2009-19
- Figure 47: Best and worst case forecasts for the UK tea* market, by value, 2014-19
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- Figure 48: Best and worst case forecasts for the UK tea* market, by volume, 2014-19
- Figure 49: Best and worst case forecasts for the UK tea* market, by volume, 2009-19
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- Figure 50: Best and worst case forecasts for the UK hot chocolate and hot malted drinks market, by value, 2014-19
- Figure 51: Best and worst case forecasts for the UK hot chocolate and hot malted drinks market, by volume, 2014-19
- Figure 52: Best and worst case forecasts for the UK hot chocolate and hot malted drinks market, by volume, 2009-19
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Appendix – The Consumer – Frequency of Usage
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- Figure 53: Frequency of usage of hot drinks in the last month, by type, April 2014
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- Figure 54: Frequency of usage of hot drinks in the last month, by type – Standard tea, by demographics, April 2014
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- Figure 55: Frequency of usage of hot drinks in the last month, by type – Speciality tea, by demographics, April 2014
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- Figure 56: Frequency of usage of hot drinks in the last month, by type – Green tea, by demographics, April 2014
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- Figure 57: Frequency of usage of hot drinks in the last month, by type – Fruit tea or herbal tea, by demographics, April 2014
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- Figure 58: Frequency of usage of hot drinks in the last month, by type – Instant tea, by demographics, April 2014
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- Figure 59: Frequency of usage of hot drinks in the last month, by type – Hot chocolate in any format, by demographics, April 2014
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- Figure 60: Frequency of usage of hot drinks in the last month, by type – Hot malted drink, by demographics, April 2014
- Repertoire of usage of tea
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- Figure 61: Repertoire of usage of tea in the last month, by type, April 2014
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- Figure 62: Repertoire of usage of tea in the last month, by type, by demographics, April 2014
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- Figure 63: Frequency of usage of tea in the last month, by type, by repertoire of usage of tea in the last month, April 2014
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Appendix – The Consumer – Factors Considered when Buying Tea
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- Figure 64: Factors considered when buying tea, April 2014
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- Figure 65: Most popular factors considered when buying tea, by demographics, April 2014
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- Figure 66: Next most popular factors considered when buying tea, by demographics, April 2014
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- Figure 67: Other factors considered when buying tea, by demographics, April 2014
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Appendix – The Consumer – Attitudes Towards Tea
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- Figure 68: Attitudes towards tea, April 2014
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- Figure 69: Agreement with the statement ‘Tea is a good option to have between meals to prevent hunger’, by demographics, April 2014
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- Figure 70: Agreement with the statement ‘Drinking tea is a good alternative to having alcohol on a night in^’, by demographics, April 2014
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- Figure 71: Agreement with the statement ‘I would be interested in trying standard black tea that offered added health benefits’, by demographics, April 2014
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- Figure 72: Agreement with the statement ‘I prefer teas with a higher level of antioxidants’, by demographics, April 2014
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- Figure 73: Agreement with the statement ‘Teas with flavours tailored for the seasons would appeal to me’, by demographics, April 2014
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- Figure 74: Agreement with the statement ‘Ready-to-drink teas are a healthier alternative to soft drinks’, by demographics, April 2014
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- Figure 75: Agreement with the statement ‘I would like to see a greater variety of standard black teabags with added flavours’, by demographics, April 2014
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- Figure 76: Agreement with the statement ‘I would be interested in trying tea with a higher caffeine content as an alternative to coffee’, by demographics, April 2014
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- Figure 77: Agreement with the statement ‘I would be interested in using tea pods to make tea drinks’, by demographics, April 2014
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- Figure 78: Agreement with the statement ‘I would like to see more varieties of chai lattes’, by demographics, April 2014
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- Figure 79: Agreement with the statement ‘Hot tea does not appeal to me in hot weather’, by demographics, April 2014
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- Figure 80: Agreement with the statement ‘Tea takes too long to make at breakfast time during the week’, by demographics, April 2014
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Appendix – The Consumer – Attitudes Towards Teabags
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- Figure 81: Attitudes towards standard teabags, April 2014
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- Figure 82: Most popular attitudes towards standard teabags, by demographics, April 2014
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- Figure 83: Next most popular attitudes towards standard teabags, by demographics, April 2014
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- Figure 84: Frequency of usage of hot drinks in the last month, by type, by most popular attitudes towards standard teabags, April 2014
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- Figure 85: Frequency of usage of hot drinks in the last month, by type, by next most popular attitudes towards standard teabags, April 2014
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Appendix – The Consumer – Attitudes Towards Hot Chocolate and Hot Malted Drinks
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- Figure 86: Attitudes towards hot chocolate and hot malted drinks, April 2014
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- Figure 87: Most popular attitudes towards hot chocolate and hot malted drinks, by demographics, April 2014
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- Figure 88: Next most popular attitudes towards hot chocolate and hot malted drinks, by demographics, April 2014
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