RTD Tea in Latvia

PROSPECTS

Seasonality and consumer migration to alternatives hinder demand

RTD tea is seeing slow growth in off-trade volume terms in 2019, although this continues the 2018 rebound following unhealthy declines in the early-to-mid-review period. The category remains negatively affected by the consumer migration to perceived healthier alternatives like bottled water, especially flavoured bottled water.

Players leverage health and wellness to renew the category’s image

In line with general health and wellness trends, manufacturers of RTD tea are investing in a renewal of the category’s image. Thus, they are introducing more natural formulas and reducing sugar levels.

More sophisticated options expand the offer and stimulate interest among younger consumers

RTD tea continues to expand beyond black and green iced tea to more exotic, sophisticated and even medicinal herbal and functional varieties in 2019. Coca-Cola HBC Latvia’s highly visible launch of Fuze Tea in 2018 refreshed interest in the category.

COMPETITIVE LANDSCAPE

Fuze Tea benefits from strong marketing and distribution to jump ahead of the pack

In 2018, Fuze Tea, which is available in over 20 flavours and 15 different pack types in Europe, replaced Nestea in Coca-Cola HBC Latvia’s portfolio. The new brand leveraged established wide distribution networks and received marketing support to immediately lead the category.

Consumer willingness to try new products offers opportunities for RTD players

The brand offer in RTD tea is still quite limited in 2019. Coca-Cola HBC Latvia (Fuze Tea) and Cido Grupa (Cido Ice Tea) enjoy a clear lead in off-trade volume and value share terms, while Rimi Latvia (Rimi private label) heads the chasing pack.

Innovation and accessibility set to inform strategic direction of companies

Innovation, new product development and wider distribution are expected to be key aspects of company strategies to revitalise RTD tea and provide a new, modern and dynamic image. One key new novelty is Cold Brew Sparkling, launched by Paulig in spring 2019.

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