Tea in Singapore

PROSPECTS

Functionality remains the driver of growth in sales of tea

Functionality remains one of the key selection appeals of tea for consumers. While green tea remains the fastest-growing tea due to its wide product availability in both modern and traditional retail channels, as well as its popularity due to its antioxidant properties, other teas that also boast functional properties are also seeing higher growth in 2019.

Tea shows potential for premiumisation

While it is only enjoying humble growth in volume terms, value sales of tea are growing faster, with stronger growth in categories such as fruit/herbal tea, green tea, and organic tea, which typically command higher unit prices than black tea. Moreover, creative blends, such as those offered by Gryphon or TWG, are also gaining popularity, often not for every day consumption but rather for gifting purposes, as these blends are often packaged with premium and attractive packaging.

E-commerce continues to show growth potential

While the majority of overall retail volume sales of tea are still made via physical channels, e-commerce remains the fastest growing channel. Black tea and green tea, the two biggest tea categories in value terms, are widely available from online retailers such as FairPrice Online and RedMart.

COMPETITIVE LANDSCAPE

Unilever Singapore maintains dominance

Despite experiencing slight declines in volume and value sales in 2019, black tea remains dominant in Singapore, being considered a staple product in a lot of office pantries and horeca channels. Unilever Singapore through its Lipton brand maintained a dominant share within tea in 2019, with its wide distribution channel as well as affordability, areas other players may find hard to compete in.

Odani Kokufun Co Ltd moves to second place

By maintaining its lead in the fastest growing category, green tea, Odani Kokufun Co Ltd managed to become the second largest player in tea in Singapore in 2019 through its OSK Sencha Green Tea brand. Besides its main offering of green tea, Odani Kokufun also offers other products such as organic barley tea within its product portfolio, enabling the company to enjoy higher growth as consumer interest in organic products grows.

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