RTD Tea in Spain

2020 IMPACT

Manufacturers work to boost at-home consumption

Although on-trade outlets had reopened by the summer months that tend to comprise the key period for RTD tea sales, the closure of foodservice outlets, subsequent restrictions on their operations and consumer concerns about health and economic issues have contributed to a marked decline in on-trade volumes during 2020. However, off-trade channels have effectively absorbed the relatively minor latent on-trade demand, enabling the category to maintain total volume growth during the year.

Innovation helps to stimulate consumer interest

Demand for RTD tea has continued to grow as consumers looking for healthier alternatives to carbonates have been attracted to the category’s expanding range of flavours and brands. Consumers have shown growing interest in new flavours and new types of tea, such as Japanese matcha and Chinese kombucha teas.

Leader experiences further share erosion

Cía Servicios de Bebidas Refrescantes continues to hold a strong lead in RTD tea through the Nestea brand as it leverages an extensive distribution network and the offer of a wide variety of flavours, led by lemon and peach. Nestea continues to derive benefit from its first-mover advantage and strong brand image.

RECOVERY AND OPPORTUNITIES

Opportunities for health-driven growth

RTD tea is expected to see strong growth in both on-trade and off-trade channels over the forecast period. Growth is set to be driven by consumers, especially young workers, looking for healthier alternatives to carbonates.

On-trade recovery

On-trade sales of RTD tea are expected to recover strongly from the dramatic impact of measures to contain COVID-19, exceeding pre-pandemic volumes by 2023 as restrictions on operations are eased and inbound tourists return to Spain. RTD tea is set to become increasingly prevalent in foodservice outlets as young consumers look for healthier alternatives to carbonates and the range of flavours and brands expands.

Vending offers potential for development

Vending presents a potentially interesting channel for RTD tea going forward as it provides opportunities for purchases with reduced risk of viral transmission through social contact and can be located at strategic hot spots, such as close to beaches and other key summer leisure venues frequented by younger consumers. Prominent vending can also make a significant contribution to raising consumers’ product- and brand-awareness.