RTD Tea in the United Kingdom

PROSPECTS

A year of rejuvenation for RTD tea

RTD tea recorded solid growth in both off-trade volume and current value terms in 2019, with increased per capita consumption. Over the last few years, the RTD tea landscape has changed profoundly, as brands move away from sugar content, experiment with botanicals and fruit flavours to improve the image of RTD tea and position it as a healthier soft drink.

Carbonated RTD tea driving category growth

RTD tea was traditionally a soft drinks category struggling to grow, as consumers preferred drinking carbonates over “iced” tea. However, in recent years RTD tea consumption witnessed further democratisation.

Carbonated RTD tea is flourishing yet current distribution model remains an obstacle

Although kombucha sales are up in the UK with widening availability and increased marketing activity, local brands still struggle to penetrate traditional retailers, being only available in health food chains such as Holland & Barrett or Whole Foods. In addition, those who do manage to become available at Sainsbury’s or Tesco struggle to maintain a strategic position on store shelves - sometimes being available in the alcoholic drinks section.

COMPETITIVE LANDSCAPE

Little Miracles registers promising growth

RTD tea brand Little Miracles, which reformulated its drink content just in time for the sugar levy in 2018, showed continued growth over the past two years, establishing itself as a key contestant in the still RTD tea landscape. With a portfolio of five different flavoured products in retail (cherry, peach, orange, baobab and pomegranate), and both organic and Fairtrade certifications, Little Miracles appears as a brand that goes against well-established players, responding to consumers’ quest for premium beverages, yet maintaining an accessible price point.

PepsiCo launching KeVita in the UK

PepsiCo, which successfully acquired kombucha brand KeVita in 2016 in a push to diversify its soft drinks business, expanded its geographic reach and launched the sparkling probiotic brand in the UK in 2019, with the product range already available at Sainsbury’s across the nation. This is the first international brand present in the carbonated RTD tea landscape in the UK.

Local brands neck and neck in the fight for kombucha growth

In the battle for kombucha domination, local brands continue to expand their product range and find innovative means to popularise their drink. Captain Kombucha launched a metal can format for its trademarked beverage, while Fix8 Kombucha partnered with department store Selfridges for kombucha on-tap in its food hall throughout summer, Jarr Kombucha developed its own kombucha bar in East London and provides workshop sessions for kombucha brewing.

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