New Tetley report shows growth in out-of-home tea consumption in the UK

Tetley’s first tea report, examines the out-of-home tea industry, exploring the profit opportunity tea presents, purchasing habits, and the latest consumer trends in flavour, occasion, consumption and more. The report also reviews the performance of tea across key out-of-home channels including: workplace, cafés, pubs, and restaurants.

The report from the 180-year old British tea company, which is owned by Kolkata, West Bengal-based Tata Global Beverages Limited, highlights a significant increase in out-of-home tea consumption. It found that more than four billion cups of tea were consumed out of home in the UK in 2016, a 2% growth over the 12-month period. Conversely, out-of-home coffee consumption dropped 5.5% from 6.7%, to 1.2%, per the report.

Per the report, Tetley is the leading selling tea in the UK with 9.69 million households drinking it followed by PG Tips (9.53 million hh), Yorkshire Tea (6.58 million hh) and Twinings (5.98 million hh), respectively. The report offers information on current market trends and predicts future trends, in addition to providing insight and purchasing analysis to help support retailers and operators. Among its findings: tea remains the most consumed drink in the UK. Out-of-home tea consumption growth has doubled, from 1.6% to 3.6% during 2016. UK consumers are beginning to regard tea as a premium hot beverage, with more blends and varieties now readily available. Tea is a part of Britons’ daily routine, with tea drinkers consuming at least four cups a day. Since 2007 when 96% of British tea sales were tea bags, there has been a significant increase in purchases of green, fruit, and herbal tea blends.

According to the report, which incorporated current research from Kantar Worldpanel, Nielsen, and MCA, core consumers, age 45 and over are driving category growth, up 4% over the past 12 months, versus just 2% growth from under 45. Younger consumers are less emotionally engaged with tea compared to those over 45 years, and are more likely to drink tea while socializing. While health is driving tea growth in retail (although the report notes that growth has slowed across retail outlets) there is a large disparity in the foodservice sector. The report found that tea is under indexing out-of-home for health. This presents a significant opportunity for operators and the tea industry to promote the health benefits of tea drinking to a fresh demographic of well-being conscious consumers.

Given the aforementioned, coupled with the fact that tea is the second most popular drink in coffee shops, the workplace, department store cafés, and supermarket cafés, the report recommends targeting the younger demographic and creating a better out-of-home tea drinking experience. The report states, “Café chains are re-evaluating their tea offering, tapping into consumer desire for specialty beverages that offer a little extra wow factor and theatre, and command a little extra money at the till too.”

Also key, as several brands have realized, is offering educational tools to train staff in the art of the serving the perfect tea. “It’s crucial that operators give front of house teams the knowledge and confidence to offer advice on the variety of tea blends they offer, which will in turn create loyal customers,” according to the report.

The report also offers various suggestions for promoting the health benefits of tea such as educating customers on the relevant benefits of drinking tea, and touting tea as a natural stimulant to students, which operators can boost sales by maximising relevance to consumers.

Creating “occasions” for tea drinking via food pairings to drive profits and sales was also recommended. The report states, “Tapping into trends and understanding customer need states across different channels, occasions and day parts allows operators to tailor their tea offering, appealing to a much wider consumer demographic. By offering beverage solutions that appeal to our varying emotional and functional requirements, there’s also an opportunity to attract new supporters to the category.”

 In conclusion, the report notes, “To engage and resonate with the tea drinker of tomorrow, the industry must continue to evolve and innovate. As technology advances, and our consumption habits adapt, we predict to see more change for tea in the next decade than we have in the last 350 years.”

Tetley’s ‘Future of Tea’ report, in partnership with the Future Foundation, forecasts the biggest advances in tea since the concept of the tea bag was first brought to the UK in 1939. “From medicated teas to new formats including sorbets and jellies, the way we consume tea is set to transform over the next decade.”

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