RTD Tea in Spain

PROSPECTS

Economic recovery positively impacts sales

RTD tea posted solid growth in both volume and current value terms in 2018, with per capita consumption continuing to increase in Spain every year. This category has become one of the most dynamic in the Spanish soft drinks market, benefiting from the shift away from carbonates towards healthier beverages.

Significant room for growth for RTD tea in the Spanish market

RTD tea is currently still a small category in Spain in comparison with other European countries, which suggests that there remains significant room for further growth. In addition, the offer of RTD tea in the on-trade is currently still limited, with only Nestea having a significant presence in the channel.

The health and wellness trend favours RTD tea

The main consumers of RTD tea include health-conscious Spaniards looking for more natural soft drinks. Consumption of RTD tea is particularly strong among young people, which are the most concerned about maintaining a balanced diet and avoiding unhealthy or artificial ingredients.

COMPETITIVE LANDSCAPE

Nestea remains the dominant brand

Cía Servicios de Bebidas Refrescantes continued to dominate RTD tea in Spain in 2018 thanks to the popularity of its Nestea brand, an extensive distribution network and the offer of a wide variety of flavours, led by lemon and peach, as well as reduced-sugar and reduced-caffeine variants. PepsiCo Foods maintained second position with its Lipton brand, although it only accounted for a small share of sales due to weaker availability in both the off-trade and on-trade.

Coca-Cola and Schweppes enter RTD tea

In 2018, Coca-Cola and Schweppes entered RTD tea via the launch of Honest Tea and May Tea, respectively. Both products aim to tap into the health and wellness and flavour sophistication trends and are expected to take share from the leading brands in the category over the forecast period, benefiting from their parent companies’ strong image and wide distribution networks.

New product developments and smaller players emerging in the premium segment

The growing premiumisation trend has also opened up opportunities for smaller manufacturers to establish a foothold in RTD tea. The growth potential of RTD tea is also evident from the fact that an increasing number of other types of beverage manufacturers have begun to enter the category.

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