Tea in 2018: Annual Market Overview

Strategy Briefing

About This Report

May 2018

Prospects are looking bright for the world’s most consumed hot drink. Premiumisation is keeping tea value growth strong in developed markets, while growing populations and rising consumer incomes are boosting consumption in developing regions. Tea is growing in all regions, but it will be Asia Pacific that will account for most of the USD7.9 billion the category is expected to add in value by 2022.

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Tea in 2018: Annual Market Overview

Tea as a healthy beverage

A growing burden of chronic diseases in both developed and developing countries has increased consumer interest in healthier products everywhere, providing a global opportunity for tea as a healthy beverage option.

Trading up from unpackaged to packaged tea

Global poverty rates are falling, especially in Asia, which is bringing millions of new consumers into the packaged tea market for the first time. These consumers are especially interested in affordable products whose quality they can trust.

Urban middle classes looking for high quality products

In many traditional tea drinking markets, a new generation of middle-class consumers is becoming more adventurous in their tea-drinking habits and driving value growth. This will be especially important in India and Pakistan.

Premiumisation in developed markets

In the mature markets of the developed world, there is little opportunity for consumption to grow, making the focus of growth shifting consumers from mass brands to higher quality tea formats.

Tea outside the home

With soft drinks consumption patterns changing, opportunity is growing in RTD tea. Foodservice is also a potential growth area, especially in Western nations, where restaurants have traditionally considered tea to be an afterthought.

Introduction

Five key trends shaping global tea

Global Outlook

Map: global tea consumption in 2017
Tea growth hits a temporary slowdown at a global level
Asia Pacific dominates global sales, especially in volume terms
Map: the fastest growing category of tea
Ireland leads the world in average spending on tea
Asia leads in all categories except fruit/herbal teas
Black tea is the largest category of tea worldwide
Map: global tea preferences
The top tea growth markets are shifting
Map: the global picture is positive, but pockets of trouble remain
Modern grocery and e-commerce make big distribution gains
Conclusions: the global tea market in 2017

Leading Companies and Brands

There are few truly global tea companies
Unilever’s presence is wide, but its leadership is limited
Unilever seeks to upgrade beyond Lipton
Tata’s two-track growth shows how the market is fragmenting
David’s Tea leads global growth because of demand from Canada
Conclusions: competitive landscape

Top Five Trends Shaping the Industry

Tea and the Euromonitor International megatrends
Tea as a health beverage
Trading up from unpackaged to packaged tea
Urban middle classes looking for high quality products
Premiumisation in developed markets
Tea outside the home

Market Snapshots

Global Snapshot: black tea
Global Snapshot: fruit/herbal tea
Global Snapshot: green tea
Global Snapshot: instant tea
Global Snapshot: other tea
Regional Snapshot: Asia Pacific
Regional Snapshot: Australasia
Regional Snapshot: Eastern Europe
Regional Snapshot: Latin America
Regional Snapshot: Middle East and Africa
Regional Snapshot: North America
Regional Snapshot: Western Europe

Appendix: Competitor Analytics

Competitor Analytics tool
Overview
Competitors
Market Overlap
Treemap
Overlap Matrices

Appendix: Industry Forecast Model

About Euromonitor International’s Industry Forecast Model
Soft drivers and the Industry Forecast Model
Growth decomposition explained
Significance and applications for growth decomposition
Key applications for Industry Forecast Models

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