What you need to know

The tea, hot chocolate and malted drinks market continues to suffer from competition from coffee and soft drinks. The hot summer weather particularly impacted tea sales in 2018, with volumes down 3% and the value of the market dipping by 0.6% to £645 million. The hot chocolate and malted drinks category saw an even stepper decline in sales, continuing the long-term trend.

This continuing decline in sales highlights the need for brands in these categories to look to new formats and more variety to increase frequency of drinking and encourage trading up to grow sales. Products focused on health and wellbeing, those targeting different needs at different times of the day, more cold versions of hot drinks and pods are some of the opportunity areas for boosting growth.

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. The core definition of tea also excludes all iced teas and RTD (ready-to-drink) teas, although usage and attitudes towards RTD tea is discussed in the consumer section. A market size for the last three years is also provided in the Market Segmentation section.

Coffee is excluded and is examined in Mintel’s upcoming Coffee – UK, September 2019 Report.

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