Move over, alcohol! Tea and other beverages can take advantage of alcohol consumption decline

By Rachel Arthur contact

- Last updated on GMT

Tea can take advantage of alcohol consumption decline

Related tags: Coffee, Caffeine

An alternative to alcohol comes from an unlikely source – tea – and the offer in the market is evolving accordingly, according to market researchers Mintel.

Two-thirds of tea drinkers in the UK think the beverage is a good alternative to alcohol on a night-in: meaning the sector could benefit from declining alcohol consumption.

Alongside tea, other opportunities for non-alcoholic drinks include low, reduced and no-sugar alternatives, especially those with plant-derived sweeteners, and unflavoured sparkling water.

16% of UK consumers overall are drinking fewer non-alcoholic drinks, says Mintel, and it expects the non-alcoholic drinks market to grow by 3.4% in value this year to reach £18.6bn. The market will benefit from a long-term decline in alcohol consumption – offering opportunities for other beverages, it adds.

Tea time?

Richard Ford, senior food and drink analyst, Mintel, told tea has the advantage of already being seen as an evening drink.

“It is not necessarily above alcohol, but it has established refreshment cues,” ​he said. “It rarely contains sugar, or sweeteners.

“It’s a product that doesn’t have to be heavily processed and doesn’t contain as much caffeine as coffee.  If you were going to avoid alcohol in the evening: you might not have an energy drink or coffee, if you were worried about sugar you wouldn’t want a sugary soft drink.”

 And products such as MojiTEA (a lime and mint green tea blend from Blue Bird Tea Co in Brighton) show how tea companies can offer products to match the consumption occasion.  

Winners and losers for non-alcoholic drinks in 2015

Winning: Premium.​ Trading up to premium is seen in tea and other sectors as well, thanks to forecast growth in real incomes.

In the tea segment, that could mean more interest in green tea bags and herbal and fruit infusions. In the soft drink category that could equate to more adult soft drinks, and in coffee an increased interest for beans and pods.

Winning: Bottled water.​  Bottled water is forecast to be one of the fastest-performing segments in 2015,” ​says Mintel.

“Bottled water is, to some extent, reliant on clement summer weather. However, the segment has proven itself able to continue growth even during years of inclement weather as it continues to play a role in hydration amongst a majority of consumers.”

Losing: Cordials and squash.​  All segments of the non-alcoholic drinks market are expected to grow, but some less than others.  The cordials and squash segment is expected to be the weakest performer in the non-alcoholic drinks market in 2015,”​ says Mintel.

“Some value growth is expected to come through migration to more concentrated variants, but with nothing on the horizon to otherwise boost value. Moreover, the segment continues to face problems on two major fronts: concerns over sugar and concerns over artificiality.”

Losing: Coffee. “Some growth in coffee value is expected to come through consumers trading up to beans and pods, although this is forecast to lag behind the non-alcoholic drinks market.

“The faster growth forecast for coffee shops is likely to be a factor at play here, with some consumers expected to buy coffee more readily out of home as and when household incomes improve.”

Related topics: Markets

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