After a demand spike in 2020, when COVID-19 hit Western Europe, followed by further growth in 2021, with some restrictions still in place, the return to near normality in 2022 has seen tea sales decline slightly. However, they remain well above pre-pandemic levels, with positive growth expected over the forecast period. Fruit/herbal tea will account for the bulk of new sales in 2022-2027, but loose black tea, green tea and other tea will also be developing positively in the coming years.
This report comes in PPT.
Fruit/herbal tea the main growth driver
A slight decline was seen in tea sales in 2022, but, after two years of healthy growth rates, with at-home consumption boosted by anti-COVID-19 measures, they still remain higher than their pre-pandemic levels. Fruit/herbal tea continued to see positive growth in 2022, helped by a strong performance in Germany, its biggest market, although it is becoming more popular in most Western European markets.
UK tea drinkers moving away from black bags
In the UK, which has by far and away the greatest sales of black tea bags, this product seems to be in something of a long-term decline, particularly among younger consumers, and is increasingly losing out to fruit/herbal tea, on the back of caffeine-free products that can cater to the wellbeing and functional trends. The wellbeing trend is also favouring products in the green tea and other tea categories. New product developments have been increasingly focusing on functionality, such as improving gut health, energising, detoxing, relaxation, and immune support.
Supermarkets and discounters gaining share in recent years
Modern grocery retailers continue to dominate retail distribution of tea, with these products easy to pick up with the weekly grocery shop. While the one-stop shop favoured supermarkets and discounters during the pandemic, minimising the need to visit more than one or two stores, discounters are currently the beneficiary of the high inflation rates that are pushing up product prices across much of the region.
Positive growth expected over 2022-2027
Tea has positive growth prospects for the forecast period, with fruit/herbal tea adding the bulk of the new sales. The pandemic saw the relatively healthy image of tea appeal to consumers, with players capitalising on this through the launch of a greater number of teas with a wellbeing positioning. Health and wellness is expected to continue to be a focus of new product development and marketing in the tea industry in the coming years.
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