Tea in Egypt

PROSPECTS

Tea culture in Egypt

Tea is the most popular hot drink in Egypt. It is consumed by all income segments, and is readily available across the country.

Inflation and its effects on the Egyptian market

In 2018, the high inflation that started in 2017 continued, with a double-digit rate. This was a direct result of the partial lifting of fuel and power subsidies, which was part of the economic reform programme that aims for the total removal of fuel and power subsidies by 2021.

Positive growth for tea in spite of inflation

In 2018, in spite of inflation, tea still recorded positive growth, albeit at a slower rate than the review period average. This is because tea is considered an essential product in Egyptian households, thus demand was maintained despite the price increases, owing in part to an increase in the population.

Tea forecast to continue to grow

Tea is expected to maintain its positive growth in the forecast period, as it is considered an essential product by Egyptians, and the increasing population means that there will be a rise in demand. The growth rate is predicted to rise in the medium to long term as the economic reform measures take full effect and inflation stabilises.

COMPETITIVE LANDSCAPE

Badawy & Sons Co leads tea sales

In 2018, Badawy & Sons Co continued to lead the overall tea category, through the brand El Arosa, which has a substantial share in black tea, which constitutes the bulk of tea sales. El Arosa benefits from its affordability and a wide distribution network, which reaches the rural areas of Egypt.

Manufacturers prioritise survival over new product developments

In 2018, there were no major product developments in the tea category, as manufacturers focused on retaining customers of their existing brands. The focus was on marketing and offering an attractive alternative to consumers who were looking for economic options in light of high inflation.

Tea distribution

The key distribution channels for tea are independent small grocers and supermarkets. Sales of tea through hypermarkets on the rise, mainly due to the offers and discounts that are only found in hypermarkets, where tea is often bought in bulk.

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