Table of Contents
Overview
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- What you need to know
- Products covered in this Report
Executive Summary
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- The market
- Tea’s decline accelerates in 2016
- Tea looks set for further decline
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- 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
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- Figure 2: UK retail value sales of hot chocolate and hot malted drinks, 2012-22
- Ordinary tea bags continue to struggle
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- Figure 3: UK retail value sales of tea, by segment, 2015 and 2016
- Hot chocolate stalls, malted drinks decline
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- 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
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- Figure 5: Leading brands’ shares in the UK retail tea market, by value, 2016/17*
- Cadbury remains dominant in hot chocolate
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- Figure 6: Leading brands’ shares in the UK retail hot chocolate market, by value, 2016/17*
- Hot malted drinks brands struggle
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- 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”
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- 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
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- Figure 9: Frequency of drinking tea, by tea type, May 2017
- Hot chocolate and malted drinks remain rare treats
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- Figure 10: Frequency of drinking hot chocolate and hot malted drinks, May 2017
- No magic bullet to bolster standard black tea
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- Figure 11: Barriers to drinking standard black tea, May 2017
- De-stressing/calming and digestive health functions have strongest appeal
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- 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
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- 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
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- Figure 14: Attitudes towards tea and other hot drinks, May 2017
- What we think
Issues and Insights
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- 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
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- 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
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- Tea’s decline accelerates in 2016
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- Figure 15: UK retail value and volume sales of tea, 2012-22
- Tea looks set for further decline
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- 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
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- 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
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- 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
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- Further decline for ordinary tea bags
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- 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
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- Figure 23: UK retail value and volume sales of hot chocolate and hot malted drinks, by segment, 2014-16
Market Drivers
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- Competition for drinking occasions is fierce
- Commodity prices on the rise as Brexit vote hits the market
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- 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
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- Figure 25: Trends in the age structure of the UK population, 2012-17 and 2017-22
Companies and Brands – What You Need to Know
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- 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
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- Market leader PG Tips sees values fall
- Twinings sees mixed results
- Tetley reverses its fortunes
- Yorkshire Tea and Pukka continue sales growth
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- Figure 26: Leading brands’ value sales and shares in the tea market, 2015/16 and 2016/17
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- 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
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- 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
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- 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
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- Tea launches hit four-year high
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- 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
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- Figure 31: Share of new product launches in the UK tea market, by format type, 2013-17
- Twinings revamps fruit and green tea packaging
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- 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
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- 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
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- 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
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- 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
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- Adspend falls in 2016
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- 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
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- 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
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- 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
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- Tea remains ingrained in the British diet
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- Figure 38: Repertoire of types of teas drunk, May 2017
- 48% of Brits drink standard black tea daily
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- 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
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- 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
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- Figure 41: Frequency of drinking hot chocolate and hot malted drinks, May 2017
Barriers to Drinking Standard Black Tea
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- No magic bullet to bolster standard black tea
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- 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
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- Majority interested in health benefits in tea
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- 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
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- Scope for hot chocolate to explore alternatives to refined sugar
- Cocoa powders should highlight their unsweetened credentials
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- 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
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- Flavoured tea could gain from sugar debate
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- 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
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Forecast methodology
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- 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
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- Figure 50: Mean temperature, by month, January 2012-June 2017
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Appendix – Market Share
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- 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
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- Figure 53: Leading manufacturers’ sales and shares in the UK hot malted drinks market, by value and volume, 2015/16 and 2016/17
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Appendix – Launch Activity
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- 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
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