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Tea and Other Hot Drinks - UK - July 2014
Introduction
 
Tea remains a high-penetration category, with over four in five consumers having drunk it in April/May 2014, despite competition from other drinks in recent years. Meanwhile, over half of consumers have drunk hot chocolate and almost a third malted drinks.

Despite tea’s popularity, sales continue their long-term decline. Value sales are estimated to fall to £663 million in 2014, and volumes down to 85 million kg, in part because of a more clement forecast for the summer but also because the category faces competition from other drinks sectors. Meanwhile, the hot chocolate and malted drinks sector is forecast to see sales fall to £153 million and 20 million kg. NPD (New Product Development) in malted drinks remains limited as does advertising support in hot chocolate, despite the boost provided by Cadbury Wispa in 2013.

In tea, manufacturers including PG Tips and Taylors of Harrogate continue to launch products into the fast-growing fruit/herbal and green tea segments in 2014, expected in part help to offset lower sales of standard tea.

Opportunities for future growth in tea may lie in new formats, with research for this report identifying strong consumer demand for smaller teabags. Liquid format hot chocolate would tap into the consumer view that powdered products do not dissolve well in water and new flavours could help boost interest in malted drinks. 

Definition
This report analyses the retail tea, hot chocolate and malted drinks market. Therefore, the report focuses only on these products bought in supermarkets and impulse outlets.

The tea market is segmented – and defined – as follows:

Ordinary teabags, 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 is used to refer to black tea that has been through a process to remove most of the caffeine content. 

Speciality tea is used to refer to tea which, although similar in appearance to standard tea and also often drunk with milk, is usually sourced from specific high-quality tea plantations and has a distinctive taste. 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 chamomile). 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 gives 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.

Malted drinks are defined as follows:

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 Coffee – UK, August 2014.

Value figures throughout this report are at retail selling prices (rsp) unless stated otherwise. Market sizes at constant 2014 prices are devised using Mintel’s food deflator.

Crown copyright material is reproduced with the permission of the Controller of Her Majesty’s Stationery Office and the Queen’s Printer for Scotland.

Abbreviations
ABF | Associated British Foods
FMCG | Fast-Moving Consumer Goods
GNPD | Global New Products Database. For further details, please contact Mintel on 020 7606 4533
GSK | GlaxoSmithKline
Nielsen Media Research | For further information, please contact nmr.communication@nielsenmedia.co.uk
NPD | New Product Development
RTD | Ready-to-drink
VoD | Video on Demand

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