RTD Tea in Nigeria

PROSPECTS

RTD tea expected to grow due to popularity of hot tea

RTD tea continued to see strong off-trade volume growth and even more dynamic off-trade current value growth in 2019. The category is set to increase its market penetration over the forecast period, developing rapidly from a low base, along with the expected development of new flavours and pack types.

Growing youth population and declining unit prices likely to drive growth

Nigeria has a fast growing population, and a major part of the population comprises young adults, women and working professionals. These groups of people are the main consumers of RTD tea, as it is seen as a healthy way of gaining energy when working or studying, without having to consume hot beverages.

RTD tea rides the health and wellness wave

RTD tea has derived benefit from a similar positioning to juice in Nigeria, in line with the growing health and wellness trend. Therefore, it is expected to continue to develop along the lines of a healthy positioning, as most of these products are fruit-flavoured, and new launches of such products are expected.

COMPETITIVE LANDSCAPE

CHI dominates RTD tea thanks to leveraging its popularity in juice

CHI continued to dominate RTD tea in off-trade value terms in 2019, thanks to its Chi Ice Tea brand, which has gained a strong foothold in the Nigerian market and is popular with consumers. The company leverages its strong brand equity in juice, with consumers seeing its RTD tea as an extension of this portfolio.

CHI posts higher growth in 2019 due to rebranding

Due to CHI’s edge over the competition it showed stronger growth in 2019 compared with 2018, despite the harsh economic conditions and the high cost of production. This growth can be attributed to the marketing strategy used by the producer, which positions its brand as a healthier alternative to carbonates.

Lipton Iced Tea is the only international brand and struggles to achieve growth

Consumers of RTD tea have shown more loyalty to local brands, which are often available at more competitive prices. The only international brand within RTD tea is therefore Lipton Iced Tea from Unilever Nigeria.

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