Hot Drinks in Iran
Euromonitor International's Hot Drinks in Iran market report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change.
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Tables: 15 | Publication date: Oct 2006
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Executive summary
Black tea is second only to water
The favourite drink of Iranians, from morning till evening, is black tea served with sweets and pastries. Iranians usually drink a cup of hot black sweet tea in the morning and several more cups at different times throughout the day. A cup of tea is always served to guests at formal meetings and family gatherings. For Iranians, no other beverage has ever been able to take the place of tea.
Tea industry concentrated in the north of the country
Lahijan city is the centre of Iran’s tea industry. It is in Gilan province, which is on the coast of the Caspian Sea, has a mild climate and is reputed to be the land of tea. It is the foremost region for tea cultivation and produces the best quality tea in Iran. About 58,000 families work in 34,000 hectares of tea gardens. There are more than 150 tea factories across the northern region of Iran.
Tea industry in crisis
According to industry sources, Iranian tea production fell by more than 50%, from 60,000 tonnes in 2004 to just 27,000 tonnes in 2005. At the end of the review, some farmers received subsidies from the Tea Organisation. Many reduced production and some quit the business altogether because it was unprofitable and because the government delayed access to the subsidies funds. Weather conditions also had a negative impact on 2004 crop, making it low quality and changing the harvest dates. As a result, many of the northern tea processing plants announced they were not ready to buy new tea crops. Another problem with 2005’s crop was reduced quality which some specialists said was caused by using sickles and pruning shears to harvest the tea.
Tea imports are not monitored so there is a lot of illegal tea on the market. Under these circumstances, tea factories can no longer compete with foreign brands. Also, Iranian tea no longer satisfies consumer tastes as well as it used to. Despite the high consumption of tea in Iran, there are too many tea gardens in the country and, unfortunately, there has been a flood of foreign imports, both legal and illegal. As a result, some 250,000 tonnes of raw Iranian tea are stockpiled in warehouses and over 85% of the tea factories in the region from the west of Gilan city to the east of Tonekabon in Mazandaran have closed. Unemployment has increased in northern Iran and, in recent months, some tea estates have gone bankrupt.
Smuggled tea is the cause of the problem
Not only is it remarkable that the government allows tea to be imported but the volume of illegally imported tea is very high as well. Annually, some 80,000 tonnes of smuggled tea are imported across the borders at Kermanshah, Astara and Chabahar. Illegal imports bring IRR250 billion in profits annually.
Every day, some of smuggled tea in 12kg cartons is distributed in the big squares of southern Tehran. Some tea is in 500g packages, even though this size package is forbidden for imported tea. It is truly remarkable that these smuggled teas are so widely available in stores and supermarkets. It is evident that the government has no control over the smuggled tea trade.
Most of the smuggled tea is packaged Ceylon tea from Sri Lanka and India. Some traders buy low quality Iranian tea at rock-bottom prices, send it overseas where it is improved with aromatic additives, repackaged as foreign brand tea and then smuggled back into Iran. In this way, they make a healthy profit.
The distinction between religiously pure and impure teas
In 2005, Iran TV ran a negative campaign about the quality of tea from India and Sri Lanka. It claimed that Iranian tea was of a higher quality than tea from India and Sri Lanka. Moreover, a representative from the Iranian assembly argued the case for religious purity in tea. India and Sri Lanka are not Muslim countries so teas from these two nations cannot be considered religiously pure. The representative argued that the government should import tea from Muslim countries such as Indonesia where 90% of the population is Muslim and thus more likely to observe Muslim hygiene laws. Finally, it was also pointed out that Iranian tea is better for tea drinkers.
New plans for tea
The government intends to buy the 250,000 tonnes of raw tea stockpiled in warehouses. Of course, this is just a plan and the terms of payment from the government have yet to be made clear. It also plans to increase the tariff on imported tea and to update tea production techniques so as to reduce the volume of imported tea.
Nestlé is the pioneer of instant coffee in Iran
Nestlé was the first company to import instant coffee into Iran. Consumers like instant coffee because it is quick and easy to use. Many consumers do not know how to make fresh coffee. Nestlé brand products are now widely available in all cities of Iran. Turkish coffee that made from ground coffee is the most popular foreign coffee in Iran because it is used in the telling of fortunes, but it is still seldom consumed at home on the regular basis.
Instant coffee is usually served at formal office meetings. Turkish/Sperso or Cappuccino coffee is also regularly consumed in coffee shops.
Table of contents
HOT DRINKS IN IRAN : MARKET INSIGHT
1. EXECUTIVE SUMMARY
2. HOT DRINKS SALES
2.1 Market Performance
Table 1 Retail Sales of Hot Drinks by Sector: Volume 2000-2005
Table 2 Retail Sales of Hot Drinks by Sector: Value 2000-2005
Table 3 Retail Sales of Hot Drinks by Sector: % Volume Growth 2000-2005
Table 4 Retail Sales of Hot Drinks by Sector: % Value Growth 2000-2005
2.2 Competitive Environment
Table 5 Hot Drinks Company Shares by Retail Value 2001-2005
Table 6 Hot Drinks Brand Shares by Retail Value 2002-2005
2.3 Leading Company Profile: Golestan Co
Summary 1 Golestan Co Operational Indicators 2005
Summary 2 Golestan Co Production Statistics 2005
2.4 Leading Company Profile: Parand Chocolate Co
2.5 New Product Launches
Summary 3 Major New Product Launches 2004-2005
2.6 Retail Distribution
Table 7 Retail Sales of Hot Drinks by Distribution Format: % Analysis 2000/2005
Table 8 Retail Sales of Hot Drinks by Sector and Distribution Format: % Analysis 2005
2.7 Retailer Activity and Private Label Trends
2.8 Forecast Market Performance
Table 9 Forecast Retail Sales of Hot Drinks by Sector: Volume 2005-2010
Table 10 Forecast Retail Sales of Hot Drinks by Sector: Value 2005-2010
Table 11 Forecast Retail Sales of Hot Drinks by Sector: % Volume Growth 2005-2010
Table 12 Forecast Retail Sales of Hot Drinks by Sector: % Value Growth 2005-2010
3. DEFINITIONS