Tea sales continue to grow but operators need to innovate

14/08/2019
Tea sales continue to grow but operators need to innovate

Tea sales out-of-home are continuing to boom with sales expected to reach £329m for the year 2019, representing annual growth of 8.9%.

The World Coffee Portal Allegra Project Tea UK 2019 report, also estimated that 3.6M hot tea beverages are served across the UK’s specialised coffee shop segment every week, comprising 4.4% of the average UK coffee shop sales mix.

The report also revealed that tea segment revenues were £302m in 2018, an annual increase of 11.1%.

Twinings came out as the most popular out-of-home brand of consumers, followed by Yorkshire Tea and PG Tips.

The average price of the cup of black tea in a UK high street chain came in at £2.06, green tea at £2.16 and fruit and herbal teas at £2.15. The most popular time to drink tea out of home was between 2pm to 5pm.

However, the report said that more work was needed to boost consumers’ view of tea as 37% of 2,000 tea drinkers’ surveyed perceived tea out-of-home as poor value-for-money while 31% preferred loose-leaf tea over tea bags. 

Sixty-one percent of consumers  indicated that better quality beverages would encourage them to drink more tea out-of-home, while an increased menu range would compel 40% to do so.

The report said that major UK coffee chains including Coffee#1, Benugo, and Boston Tea Party have contributed to the market trend towards tea premiumisation with scaled loose-leaf offerings.

It advised operators to expand their tea ranges to boost sales as 21% of UK tea drinkers purchased one of either a green, herbal or fruit tea variety on their last café visit.

Forty-two percent of tea drinkers said they were 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.  However, for those that do use chain operators Costa was the most popular, followed by Starbucks and then M&S Café.

Meanwhile, 61% of UK industry leaders surveyed described the short-term sales prospects for tea out-of-home as positive. However, this was 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, the report said that operators must focus on innovation to challenge tea menu indifference.

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.”

The report saw over 50 consultations with coffee shop operators, including over 30 in-depth interviews. The specialist UK coffee shop segment, comprising branded coffee chains and independent coffee shops, is worth an estimated £6.8 billion and totals 15,201 outlets as of December 2018.

 

 

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