Tea maintained strong current value and retail volume growth in 2020, benefiting from inelastic consumption. Tea is more than a hot drink in Pakistan.
While retail volume sales of tea performed well in 2020, there was a sharp decline in foodservice volume trade and institutional sales via educational institutes and workplaces. This was due to the lockdown and social distancing and movement restrictions amid the COVID-19 pandemic.
Independent small grocers remain by far the dominant distribution channel for tea, benefiting from convenient locations and a traditional appeal. However, e-commerce saw strong growth from a low sales base in 2020, as retailers and brands established e-commerce platforms in order to facilitate consumers’ stronger desire to shop from home and thus minimise potential contact with the COVID-19 virus in 2020.
Tea is expected to see a strong performance in the forecast period. Retail volume and current value growth will be driven by a growing demand for convenience, rising disposable incomes for mid-income consumers and the increasing participation of women in the workforce.
Green tea is also expected to see a strong performance in the forecast period, benefiting from mass media advertising by the leading brands including Tapal and Lipton. The leading players are seeking to broaden the appeal of this product area and will drive robust growth in green tea.
E-commerce is expected to continue to gain share in sales of tea in the forecast period. Many of those that began to shop via the channel amid the COVID-19 pandemic in 2020 will continue to do so, while the channel is also expected to attract many new consumers.
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Understand the latest market trends and future growth opportunities for the Tea industry in Pakistan with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This report originates from Passport, our Tea research and analysis database.
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