Tea in Australia

PROSPECTS

Fruit/herbal tea leads in a climate of healthy living

Herbal teas lead tea in terms of retail value growth in 2019. According to trade sources, contemporary and modern flavours such as raspberry, watermelon and mango are popular fruit/herbal tea flavours as they are refreshing and a break from the norm.

Premiumisation boosts loose leaf tea

The premiumisation trend encourages consumers to spend more on products that matter the most to them. In 2019 consumer demand for improved quality tea, and tea products such as loose black tea that are perceived as more natural and less processed are expected to grow.

Decaf and organic teas to experience slow growth

Another impact of the health and wellness trend on tea drinkers is their increased interest in low caffeine products. Trade sources explain that Australia is a country with a young population, where young tea drinkers who ordinarily drink black or green tea will switch to fruit/herbal tea if looking for decaffeinated options, as they are not too attached to such types of teas.

COMPETITIVE LANDSCAPE

Unilever and AB Food & Beverages Australia compete for the lead in tea

Unilever recorded a year-on-year growth decline in market share in 2019, while AB Food & Beverages Australia’s share of tea sales remained stagnant over the same period. Within loose black tea, all the Bushells brand variants presented a share increase due to the exit of competitors, Kinkara and Tynee Tips, from supermarkets.

Supermarket discounting continues

In 2019, supermarkets continue to lower prices of tea. There has been a 10% price decrease in the overall tea category since 2017.

Environmental consciousness results in consumers demanding less packaging

In 2019 tea drinkers are more selective when choosing what tea to go for as they become more aware of the impact on their health and the environment. On the one hand, there is growing media coverage on the drawbacks of tea bags; mostly related to the materials and processes used to make them.

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