RTD Tea in Spain

PROSPECTS

Economic outlook and climate offer growth opportunities for RTD tea

RTD tea is expected to continue to develop and grow in the forecast period. The health and wellness trend spurs the demand for healthier soft drinks, such as RTD tea, which is increasingly competing with carbonates.

Underdeveloped on-trade channel offers potential to expand market size

RTD tea is still a small category in Spain, in comparison with other European countries. Therefore, there remains significant room for growth in per capita consumption terms.

Young consumers start to shape demand and innovation in RTD tea

As in other soft drinks categories, reduced sugar versions are gaining traction in RTD tea. Reduced sugar products enhance the perception of RTD tea as a healthier alternative.

COMPETITIVE LANDSCAPE

Large offer and wide distribution consolidate Nestea’s first-mover edge

Cía Servicios de Bebidas Refrescantes continues to dominate RTD tea in the off- and on-trade channels through Nestea in 2019. Nestea leverages an extensive distribution network and the offer of a wide variety of flavours, led by lemon and peach.

Strong growth potential entices new players and brand launches

The strong sales growth in the category is enticing new companies and encouraging the launch of new brands. For example, Schweppes re-entered RTD tea in 2018 with May Tea, following the withdrawal of t! at the start of the decade.

Smaller players gain foothold through premiumisation and new category

The developing premiumisation trend is creating opportunities for smaller manufacturers looking to establish a foothold in RTD tea. The growth potential of RTD tea is evident from increasing number of beverage manufacturers entering or looking to enter the category.

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