Tea in the United Kingdom

PROSPECTS

Tea consumption continues to fall steadily

Although the UK has always been dubbed a “tea drinking” nation, tea has lost popularity over the last few years, with consumption rates falling as consumers are slowly switching to coffee alternatives. Within tea, black tea remained the nation’s favourite tea, yet volume sales also continue to decline.

Quality over quantity: Premium tea could reverse the declining trend

Despite retail volumes of tea dropping, the tea category remains very dynamic as players seek to regain ground with new product developments. Innovations continue to blossom as illustrated by the rise of speciality tea, premium tea formats, and health and wellness variants.

Grocery retailers facing threat from independent health/food chains

With a high number of products launched within fruit/herbal tea and green tea options, and limited penetration of those in convenience stores, consumers turn back to health/independent food stores to purchase their preferred tea, placing more trust in these retailers to provide them with the functional benefits they seek in their beverages. This move away from traditional retailers to specialist ones has enabled brands such as Yogi Tea and Pukka to see growth in the last few years.

COMPETITIVE LANDSCAPE

Pukka gains share thanks to Unilever’s strong resources

Although Twinings maintained its share in green tea in 2019, it continues to face competitive pressures from Pukka, which joined fmcg giant Unilever in 2017. Pukka, which often positioned its product range as functional and naturally healthy, continues to grow thanks to strong marketing investments and a product range that targets multiple tea-drinking occasions, appealing to the most health-conscious consumers.

Private label maintains growth in black tea despite lack of innovation

Traditionally sold at cheaper price points than branded products, private label posted stable performance throughout 2019, responding to consumers’ need for convenience and accessible products. Private label continues to gain traction with promising retail value sales, despite a lack of innovation across all tea subcategories.

Yorkshire Tea encouraging out-of-home new tea standards

Although sales of tea in the on-trade posted stable growth, there is a gap between how tea is offered in cafés and restaurants and how consumers drink it at home. Yorkshire Tea has effectively captured this discrepancy and is encouraging on-trade channels to improve their tea offerings, through its “Proud to serve a Proper Brew” campaign.

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