RTD Tea in Uruguay

2020 IMPACT

Consumers cut spending on premium offerings which is detrimental to volume sales of RTD tea

In response to the outbreak of COVID-19 in 2020, RTD is set to record a double-digit decline in terms of volume sales. The main reason for this is due to the product area’s high price positioning as the pandemic has led to ongoing economic problems in 2020.

RTD tea remains a niche product and therefore unfamiliar to the majority of Uruguayan consumers

Regardless of the pandemic, RTD tea also suffers from not being developed in Uruguay. Therefore, the product area remains niche, as RTD tea, which extends hot tea flavours into an iced tea preparation, is a concept that remains unfamiliar to the majority Uruguayan consumers.

International brands dominate the competitive landscape

Imported brands make up with majority of the competitive landscape with Leopoldo Gross & Asoc SA dominating RTD tea in Uruguay with it its Arizona Iced Tea. Despite being more expensive than other brands, Arizona is perceived to be a good quality product.

RECOVERY AND OPPORTUNITIES

High-income consumers boost the recovery process as they remain the target audience

Consumption of RTD tea is projected to recover at the beginning of the forecast period, with volume growth rates surpassing what they were prior to the pandemic. The recovery process will most likely be boosted by high-income consumers who are the target audience for premium products such as these and have been less financially impacted by the pandemic.

RTD tea has strong potential if marketed correctly in correspondence with the growing health and wellness trend

Although RTD tea is a niche product area, it has the potential to see impressive growth over the forecast period due to the growing health and wellness trend. As more Uruguayans are expected to become more health-conscious in the years to come in response to the health crisis, RTD tea has the capability to become popular if marketed correctly, for example, as a healthier alternative to carbonates.

High-income consumers avoid contracting the virus by purchasing RTD tea through e-commerce

Currently, RTD tea is available for purchase through some hypermarket and supermarket chains. However, sales via e-commerce are anticipated to grow over the forecast period as a consequence of the COVID-19 crisis.