Tea in Costa Rica

PROSPECTS

The widening range of products available raises the prospect of stronger growth

Towards the end of the review period, the range of tea available in the Costa Rica widened. Consumers now have access to a greater variety of products, while additional levels of competition among local and imported brands has led to more of a focus on price competition, resulting in greater value being available for local consumers.

Value growth driven by rising interest in value-added products

Current value growth considerably outpaced volume growth in tea in 2019 as local consumers paid more interest in value-added products such as functional herbal blends. Indeed, appealing flavours are being combined with healthy functional benefits and these products are expected to continue driving demand for tea.

COMPETITIVE LANDSCAPE

Local brands dominate sales, responding to the needs of local consumers

The competitive environment in tea in Costa Rica is defined by the strong dominance of traditional domestic brands Manza-Té and Mondaisa. The brands have been able to take advantage of consolidated economies of scale, enabling them to keep their manufacturing and distribution costs low.

Imported brands continue to make inroads due to higher consumer sophistication

Although domestic brands continue to control sales of tea, 2019 saw imported value-added brands such as Clipper and Numi continue to gain momentum. However, demand for imported tea brands is likely to be limited to high-income consumers, with the majority of local consumers unlikely to be able to afford value-added forms of tea on a regular basis.

A more diverse competitive environment as the range of products on offer widens

Current trends in tea suggest that the forecast period offers hope to smaller scale and more specialised local brands to make inroads into the dominant position of the category’s leading players. The forecast period offers strong development opportunities for products such as Sangeevani, which is expected to transfer the momentum it has already generated across on-trade establishments to the off-trade channel during the forecast period.

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