Retail sales of RTD tea experienced a major slowdown over the course of 2020 as pressure came on demand due to the COVID-19 pandemic. Specifically, the quarantine lockdown that was in effect for several weeks from the middle of March and the strict adherence to the principles of home seclusion and social distancing significantly reduced consumption occasions for the category.
RTD tea’s status as a modern and trendy soft drink and the strong appeal that the category holds for younger consumers have combined to place RTD tea at the forefront of the soft drinks industry’s response to mounting consumer concerns over plastic waste and the role that soft drinks producers and brands are playing in the growing plastic waste crisis. Specifically, RTD tea is the category in which the adoption of recycled polythene terephthalate (rPET) as a packaging material was strongest during 2019 and 2020 and this has reinforced the category’s credentials as a source of innovation and novelty.
Lipton and Lipton Iced Tea Light remained the two leading names in RTD tea at the end of the review period, leaving rival brands in their wake as they continued to attract huge numbers of consumers. Brand owner Unilever Group has put its faith in PepsiCo France to distribute and market its key RTD tea brand in the country and this has proven a wise decision as the global resources and experience of PepsiCo have proved crucial as Lipton has faced increasing intense competition in recent years.
With competition in RTD tea expect to intensify significantly over the course of the forecast period, the category leaders are expected to focus on adding value and carving out a strong niche positioning so as to combat the pernicious effects of maturity. The success of RTD tea in recent years has attracted the attention of numerous players that have already established a strong position in carbonates, including major players such as Coca-Cola Entreprises, PepsiCo France and Ets Geyer Frères, as well as key names in bottled water such as Danone and Nestlé and even some juice players, including minor player The Herbalist.
While the increasingly crowded competitive environment in RTD tea is a positive sign in terms of being an indicator that the category is likely to register further success during the forecast period, it presents challenges in terms of the efforts of brands to stand out from the pack. For instance, it is expected that the use of rPET will become the standard in the category before the end of the forecast period, negating the efforts of the category leaders to focus on this recyclable packaging format as a way of distinguishing their products and brands.
Among the first types of RTD tea available in France were carbonated products, with Unilever Group’s Liptonic one of the pioneering products in the category during the 1980s. However, more recently still products have been the order of the day and carbonated RTD tea has been out of favour among French consumers for some years.
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This report originates from Passport, our RTD Tea research and analysis database.
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