The UK is known as a nation of tea drinkers. So it might come as a surprise to many to hear the tea category has been in decline in the country. According to data from Statistica, revenue fell from £1.77bn in 2018 to £1.5bn in 2020.
The onset of COVID and ensuing lockdowns provided a boost for at-home tea sales as various restrictions resulted in a sharp shift in drinking occasions towards at-home consumption.
“Tea and other hot drinks have benefited from the uptick in at-home food and drink occasions brought about by the COVID-19/coronavirus outbreak,” Mintel research analyst Angharad Goode observed.
Nevertheless, overall category dynamics remain challenging and Mintel predicts the category is ‘expected to return to its previously downward trend’ as the dominant standard black tea segment is ‘set to continue to see other drink options chip away at its role at the go-to beverage’.
How can tea businesses ensure relevance?
Goode believes tea makers will develop increasingly innovative blends in an attempt to maintain momentum. “While standard black tea looks set to face continued pressure from ever-growing competition, the focus on health puts herbal tea in a strong position to appeal thanks to its sugar-free credentials and functional benefits,” she noted.
Mintel research demonstrates a particular opportunity around functional teas that make claims associated with stress management. In 2021, 38% of tea drinkers reported interest in tea that helps de-stress/calm users. But only 7% of launches presented stress and sleep benefit claims, showing further innovation potential.
Functional blends from relaxation to restoration
Clipper Teas is one tea brand working to meet the growing interest in functional tea blends. Throughout 2021 and moving into 2022, the business rolled out a number of new organic blends that target benefits like stress management and relaxation.
“We’re continuing to tap into the growing shift towards functional teas with associated health benefits as more people look to improve their health and wellness. This was accelerated by the pandemic which saw care for individual wellbeing surface as a major trend. We have expanded our innovation pipeline to meet consumer demand for teas with functional benefits, such as infusion blends,” Bryan Martins, Clipper Teas Marketing & Category Director at Ecotone UK, told FoodNavigator.
Last year, Clipper launched its first range of Organic Hemp infusions in two SKUs - Clipper Organic Karma Mama Hemp Infusion and Clipper Organic Groovy Ginger Hemp. “It was developed to offer a calming, self-care infusion with functional, natural ingredients. Offering a point of difference in the hemp tea segment, the blends use hemp seed which is ordinarily discarded in hemp production. This is blended with botanicals to deliver a unique and delicious taste. The ingredients in Clipper’s hemp teas meet the needs of customers that are looking for natural products to help with stress and relaxation,” Martins explained.
Relaxation is not the only message cutting through the noise and attracting more consumers to the tea segment. Consumer interest in functional blends has certainly evolved beyond claims related to sleep, Clipper believes.
“It has definitely moved beyond sleep claims as consumers consider their health in a more holistic way. Reflecting this, our products support different aspects of health and wellbeing with a greater range of natural, infusion teas which support good energy, boost metabolism, help drinkers relax and unwind or treat themselves.
“We expanded our range of organic infusions with three exciting new flavour variants to support consumer lifestyle needs: Clipper Organic Cleanse with Benefits and Clipper Organic & Fairtrade Restoring Roots. Each offer a careful blend of natural ingredients designed to either revive, restore, or cleanse,” Martins said.
It is hoped that increasing the variety and extending the taste profile’s available through Clipper’s tea blends will draw more consumers into the segment globally and build Clipper's international reputation. “We want to offer a range of delicious flavours to suit every palette, from everyday blends to herbal infusions. Currently, there are over 150 different Clipper products in our portfolio, exported to over 50 countries worldwide – and we’re continuing to expand our ranges which tap into key consumer trends and build on our current formats.”
Clipper's innovation efforts aren't just about lifestyle blends. Product launches and innovation can also help drive excitement in established areas of the tea segment like green tea. To coincide with Fairtrade Fortnight this year, the company launched a new Clipper Organic and Fairtrade Green Tea & Mint SKY, for instance. “The new format adds to our existing green tea range, which continues to out-perform other brands in the segment – holding the highest repeat rate (37.5%) among consumers,” the marketing and category director told us.
Tea and ethical consumerism
This Fairtrade launch also links to the rising importance Clipper believes consumers are placing on values in their tea choices. Martins places this trend in context of the broader shift towards ethical consumerism seen in the food and beverage industry.
“Consumers are increasingly turning to brands they know and trust, and which share their values. This isn’t exclusive to the tea category; it’s a much bigger and holistic shift in shopper attitudes and behaviour, from caring for the environment to supporting the rights of people who grow our food and drink.”
Clipper was founded as an ethical business with close ties to Fairtrade Foundation, an ethos that has been built upon following its 2012 acquisition by Ecotone (then trading as Royal Wessanen). It is now B-Corp Certified and describes itself as ‘fiercely committed’ to organic sourcing.
Clipper believes that, alongside ethical sourcing, organic is an increasingly important product attribute for the UK’s tea drinking public. “Our recent research shows that 28% of shoppers believe that buying organic food and drink is better for the environment, and over a third of grocery shoppers would be willing to pay more for ethical and sustainable hot beverages,” Martins noted.
Combining this philosophy with ‘great tasting tea’ is ‘at the heart of everything we do’. Martins continued: “Our teas also deliver on taste – guided by our ‘natural, fair and delicious’ ethos. We take functional and natural ingredients and carefully blend them with botanicals to deliver a unique and delicious taste (winning over 60 Great Taste Awards). Tea is a category which enjoys high consumer loyalty so by offering superior tasting products, we are driving repeat purchase rates across retail channels.”
This is a strategy that is paying off for Clipper. The brand, we were told, is growing ahead of sluggish category trends.
“This approach has been a key driver for our growth,” Martins elaborated. “In 2021, Clipper was one of only three brands in growth and we outperformed the category. Last year, the total tea category declined by -3.8%, whereas Clipper delivered value and volume growth at 10.3%. Paired with this, we also dominated the Organic and Fairtrade tea segment, accounting for 47% of Fairtrade and organic black tea and 20% across black, green and infusions teas,” he revealed citing IRI data.
From production to plastics: How Clipper supports climate smart tea
Clipper aims to produce tea in a way that is socially and environmentally responsible. “When it comes to people and planet, we only produce organic and Fairtrade products in harmony with the environment, made using no harmful pesticides or fertilisers for healthier soil that allows nature to thrive,” Martins explained.
In the long term, the impact of climate change on tea-growing communities poses a pressing challenge to the hot drinks industry. Clipper wants to be part of a solution.
Clipper’s contributions towards the Fairtrade Premium help to support farmers ‘to invest in climate smart technologies to protect them against the threat of climate change’, according to the tea expert. To date, Clipper has provided over £5.4 million in Fairtrade Premiums to support 114,000 farmers and their families around the world.
Last year, Clipper signed a Fairtrade pledge calling for governmental action to address issues in the tea supply chain and promising to pay fair prices to producers; become a long-term partner with farming communities; measure and report supply chain emissions and climate risks faced at farm level; and advocate for government action and climate finance.
In its bid to be at the ‘forefront’ of sustainable tea production, Clipper was the first brand to switch to a plant-based, fully bio-degradable heat-sealed tea bag which is also unbleached and non-GM. “As a result, we have prevented tonnes of polypropylene plastic from entering the waste stream,” Martins reflected.
Clipper continues to drive the pace of plastics and packaging innovation as it works to deliver a product format that consumers will recognise as a green choice. “This spring, we have gone further to unveil a new recycled packaging innovation as the next milestone in our sustainability journey. We have invested over £1 million in the development of a new production line to create a specially designed tea box, which features a reinforced structure to lock in Clipper's delicious taste and aroma, while also protecting the tea bags inside. This has allowed us to remove the unrecyclable inner foil bag across Clipper’s larger pack formats, making the packaging fully recyclable and suitable for kerbside collection for the paper recycling stream. The move will save a minimum of 20 tonnes of metalised plastic from going to landfill or incineration each year,” we were told.
And it doesn’t end there: “From June onwards, we will also be replacing the inner foil bag within our Clipper smaller packs with PE film which will be fully recyclable with other household soft plastics at supermarket collection points.
“This latest move is also driven by our parent company – Ecotone UK’s – Food for Biodiversity mission, through which we are collectively committed to changing the industrial food system with sustainable and ethically produced organic, plant-based and Fairtrade products.”
Ecotone UK is part of The UK Plastics Pact implemented by WRAP, which is focused on eliminating problematic or single-use packaging across its portfolio as part of a circular loop model. Overall, Ecotone UK is ‘on track’ to meet its target for all packaging to be 100% recyclable, reusable or composable by 2025.
Clipper believes that these messages are resonating with consumers and the brand's ethical and environmental credentials alongside its innovative blends will form the bedrock of its future marketing efforts, we heard.
"This year, we launched our Make it Better campaign which spotlights our great tasting and ethical tea, because consumers shouldn’t settle – especially when it comes to tea. The campaign acts as a call to action to make tea the best way – by making a cup that’s bursting with flavour, uses the best blends, the finest organic and 100% natural ingredients, uses unbleached tea bags and is better for the planet too.
"We also have plans to expand our offering with exciting NPDs and new formats coming down the line."