RTD Tea in Ecuador

2021 DEVELOPMENTS

Total sales partially rebound during 2021 thanks to impulse purchases restarting, while Fuze Tea remains the undisputed leader of RTD tea

RTD tea saw dramatic declines in total sales in volume and value terms during 2020, due to on-trade outlet closures and the fact that RTD tea relies on on-the-go and impulse purchases, which was impossible due to lockdowns. Conversely, during 2021, impulse and on-the-go consumption resumed as many Ecuadorian consumers gradually started resuming their pre-pandemic lives as restrictions were gradually lifted during the year.

Unit prices decline as more consumers buy RTD tea from supermarkets and hypermarkets in 2021

Due to the pandemic there has been a marked drop in impulse and on-the-go purchases while family size bulk packs were being bought for consumption at home. These bulk packs have a much lower unit price, pushing down unit prices.

On-trade stores initiate new meal deals with Fuze Tea, boosting e-commerce sales in 2021

RTD tea is popular at on-trade outlets with on-trade value sales three times higher than that of off-trade value sales. Many on-trade shops started initiating new combinations of food served with a soft drink as a meal to boost sales after the strong decline in 2020.

PROSPECTS AND OPPORTUNITIES

Slow recovery of RTD tea expected during the forecast period thanks to economic turmoil as a result of the pandemic

On-trade outlets started reopening during 2021 and it is expected that when the pandemic ends more people will return to cafés, restaurants and bars as the limit on capacity will not be valid any longer. During the forecast period, RTD tea is anticipated to demonstrate a slow recovery, with on-trade volume sales only recovering in 2025 and constant on-trade value sales a little bit earlier in 2024.

Reformulation set to continue impacting RTD tea negatively in the forecast period as consumers perceive the taste as being artificial

Products in RTD tea are expected to be less appealing to consumers following recent reformulations. Many companies have reformulated their products following the implementation of a new tax on sugary drinks in Ecuador.

Lack of competition and innovation likely to limit growth of RTD tea during the forecast period

Coca-Cola de Ecuador is expected to perform well in the forecast period thanks to its Fuze Tea brand. However, RTD tea’s competitive landscape in Ecuador is very concentrated with only three brands, namely Fuze Tea, Nestea and Té Toni from Industrias Lácteas Toni SA.