Premium and loose-leaf driving tea sales in UK coffee shops

Premium and loose-leaf driving tea sales in UK coffee shops

Project Tea UK 2019, World Coffee Portal’s annual analysis of the UK’s out-of-home tea segment, estimates 3.6 million hot tea beverages are served across the UK’s coffee shops every week, comprising 4.4% of the average UK coffee shop sales mix.

Allegra revealed the tea segment saw revenues of £302m in 2018, an annual increase of 11.1%, and forecasts UK out-of-home tea sales will reach £329m for 2019, representing annual growth of 8.9%.

While UK industry leaders remain positive in their outlook for out-of-home tea sales, 37% of tea drinkers surveyed perceive tea out-of-home as poor value-for-money.

World of Coffee suggests introducing a premium range of loose-leaf teas can be an effective strategy to boost sales and generate value-driven narratives around provenance, preparation and appreciation. This approach can also catalyse interest from the 31% of UK consumers surveyed who prefer loose-leaf tea over tea bags.

Twenty-one percent of UK tea drinkers surveyed purchased one of either a green, herbal or fruit tea variety on their last café visit.

Forty-two percent of tea drinkers surveyed are more likely to favour tea purchased at independent coffee shops versus branded chains (22%), with a quarter making their last out-of-home tea purchase at an independent. This dynamic is sustained by a desire to support local businesses and the perception that independents offer greater attention to detail in terms of tea preparation and service.

Sixty-one percent of UK industry leaders surveyed describe the short-term sales prospects for tea out-of-home as positive, a 6% reduction on the previous year. With over 80% of UK consumers anticipating no change in the frequency of their out-of-home tea consumption over the next 12 months, operators must focus on innovation to challenge tea menu indifference. Sixty-one percent of consumers surveyed indicate better quality beverages would encourage them to drink more tea out-of-home, while an increased menu range would compel 40% to do so.

Commenting on the report findings, Allegra founder and CEO Jeffrey Young said: “Tea is yet another category of the UK hospitality that is seeing a shift toward premiumisation. Premium teas provide further opportunities for foodservice operators to increase average spend and increase the breadth of their customer base. However, they to need to communicate value-add by inspiring and educating customers on the true benefits of premium tea.”

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