Speciality and herbal teas to drive growth in flagging market

Related tags Tea Mintel

Tea makers looking to bolster flagging sales should turn to
speciality and herbal teas with new research revealing these two
categories are flying off the shelves, grabbing market share away
from traditional tea products, reports Lindsey Partos.

While sales of standard tea bags and loose tea have declined by 16 and 9 per cent respectively; speciality, herbal and fruit teas have been the shining stars, rising by as much as 50 per cent and 30 per cent.

"Traditional tea has maintained a relatively staid image and is now competing with more exotic and healthier herbal tea options,"​ says Ellen Shiels at Mintel, authors of the new tea report.

And the fresh figures from Mintel suggest tea makers need to react sooner, rather than later.

Over the past five years the total tea market has declined some 12 per cent, falling from £707 million (€1 billion) in 1999, to just £623 million in 2004.

Positioning tea as a healthy drink has done much to curb overall market decline, as well as increasing its appeal to generation X.

"There has been a definite trend towards more exotic, fruity flavours, in addition to caffeine-free hot beverages, which is boosting the popularity of tea among the younger generation,"​ adds the Mintel report.

Consumers have been trading up towards premium speciality tea and herbal fruit tea, helping to slow the decline in market value, in part caused by the erosion of tea prices through discounting and promotions.

The blurring of definitions as to what exactly constitutes tea has also helped to boost the market.

"Tea can be defined as tea when it does not actually contain tea leaves,"​ comments Shiels.

Herbal and fruit teas are being sold as 'well-being' teas,and have been positioned as anything from cough and cold remedies to anti-stress teas, or even a digestive tea.

Green tea is being promoted as containing high levels of antioxidants, and the more recent product on the market, white tea, claims to contain three times the number ofantioxidants as green tea.

According to Mintel, although the more expensive speciality and herbal/fruit teas are gaining share, fruit teas still only account for a combined 27 per cent of retail sales of tea, while standard tea accounts for 63 per cent of tea sales.

And suggesting the traditional, and celebrated, British 'cuppa' is losing its appeal, Mintel data shows that while 70 per cent of 65 year olds and over are 'heavy users', that is they drink tea more than twice a day, only 38 per cent of those aged between 15 and 24 drink such quantities.

As a nod to brand loyalty, the research reveals that over half of adults claim they always buy the same brand of tea (55 per cent) and some 32 per cent of adults tend to drink tea throughout the day.

English Breakfast tea apparently remains the most popular type of tea, followed by fruit teas. Green tea is increasing in popularity, and white tea is expected to make a mark as the new "trendy health tea"​, says Mintel.

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