RTD Tea in Azerbaijan

PROSPECTS

The four leading players of RTD tea have similar positions and flavour portfolios, leaving opportunity for growth over the forecast period

RTD tea saw strong growth in 2019 in both volume and value terms, driven by the improved macroeconomic situation and promotions carried out by local manufacturers. Economic resurgence and the relatively improved disposable incomes of consumers have supported growth in both outdoor entertainment and off-trade sales of RTD tea in Azerbaijan.

Seasonality impacts sales of RTD tea, which faces competition from the traditional hot tea drink, especially during the colder months

RTD tea remains highly season-dependent. Azerbaijan is a country with strong traditions of drinking hot tea, and therefore RTD tea sales are strongly dependent on weather conditions, with sales peaking during the summer season.

Tourism is set to supports the faster on-trade growth of RTD tea compared to off-trade sales

Over the review period, state authorities actively promoted tourism in Azerbaijan, using different campaigns and tools to attract more visitors to the country. The actions undertaken by state bodies have brought positive results, drawing more tourists from both neighbouring and far countries.

COMPETITIVE LANDSCAPE

International player Azersun Azerbaijan Trading Co remains the lead RTD tea player, however, local players are expected to increase over the forecast period

International brands lead RTD tea in Azerbaijan, due to the immaturity of local manufacturers. International brands are mainly imported from the Russian Federation and Turkey.

To remain competitive, players align with the health and wellness trend, highlighting the health benefits of their offerings

During the review period, RTD tea players were forced, not only to attract consumers with more accessible prices, but to also educating consumers about the nutritional benefits of their products, aligning with the growing health and wellness trend. For example, players positioned themselves as being naturally healthy, highlighted that they were based on green tea, or advertised that their offering was more refreshing than sugary soft drinks.

The tight competition between leading players, as well as other soft drink options, results in affordable price-points for consumers

The four leading players in RTD tea, Azersun Azerbaijan Trading Co, Baku Coca-Cola Bottlers Ltd, Taj Ltd and Gilan Gabala Canning Factory LLC offer similar iced tea products, and each use price-point as a means to compete. This tight competitive environment creates affordability, as each player hopes to attract the highest bulk of consumers.

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