One of the factors contributing to the positive off-trade sales growth recorded in RTD tea during 2020 was the closure of Denmark’s southern border with Germany for much of the year. Denmark’s borders were closed throughout much of the year as the government sought to control the spread of the COVID-19 virus.
The quarantine lockdown that was imposed in Denmark in response to the COVID-19 pandemic required the closure of all restaurants, bars, cafés, pubs and fast food outlets for on-trade service, with only takeaway and delivery services available for several weeks between the middle of March and the middle of May. Fortunately, the end of the quarantine lockdown coincided with the start of the peak consumption season for RTD tea.
Private label was one of the biggest winners in RTD tea during 2020 as the financial pressures that many consumers were feeling due to the adverse economic environment that unfolded over the course of the year forced them to review their spending habits. In particular, all discretionary spending was subject to strong rationalisation, with many people turning to private label as an economical and practical option in RTD tea.
On-trade sales of RTD tea are expected to recover very strongly during the forecast period as pre-COVID-19 levels of on-trade sales are expected to return by the end of 2021. The huge shift in sales seen away from the on-trade towards the off-trade during 2020 was mainly due to the unavailability of consumer foodservice outlets during the quarantine lockdown and the fact that many consumers were hesitant to socialise outside of the home for much of the year due to fears of contagion.
Although online sales of RTD tea increased substantially over the course of 2020 as the importance of e-commerce increased among the Danish population due to the COVID-19 pandemic, e-commerce remains a marginal channel for the retail distribution of RTD tea. Moreover, while Danes took social distancing recommendations quite seriously during 2020 as they sought to make a positive contribution to efforts to curb the spread of the COVID-19 virus, as soon as the spread of the virus is brought under control to the extent that social distancing and home seclusion become things of the past, it is expected that the importance of e-commerce will diminish.
Sources from within Royal Unibrew have suggested that RTD tea containing alcohol could become the next big thing in Denmark’s alcoholic drinks industry. Indeed, the company has already launched a product line in this all-new product category, with this hitting shelves during February 2022.
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This report originates from Passport, our RTD Tea research and analysis database.
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