Tea – time to reap the benefits

Tea – time to reap the benefits

Speaking at the launch of the second annual Tetley Tea Report, which is helping to establish Tetley as thought-leaders in the sector, TATA Global Beverages’ UK managing director Graeme Karavis said that operators were losing out by not giving customers a first class, out of home tea experience. “This report provides insight into how making tea a better experience for the customer will make them more money too.”

The Tetley Tea Report 2018 provides comprehensive research into the out of home tea market for this year and beyond and was produced in collaboration with data experts CGA, with 2,500 consumers questioned and industry experts on board to provide their own professional outlook, including David Koller from Café des Art and Tom Jolly beverage manager for Gleneagles Hotel.

“In what is a challenging time for everyone, particularly in catering where operators face rising costs, fears over the labour market and more, there’s a big, big challenge ahead for all,” said Karavis, adding that it was time for retail operators to reassess their tea offering in order to reap the currently untapped rewards available from premium tea served out of home.

Tetley’s senior brand manager OOH (out of home) Marshall Kingston, continued that a year on after the EU referendum, 71% of operators in the foodservice sector said they were feeling the impact of Brexit, however there was good news, with consumers remaining relatively positive and still willing to go out and spend.

  • 81% of GB consumers predicted no change to eating and drinking out over the next 12 months

“There has been a huge rise in people drinking coffee out of home (along with the growth of the coffee shop), but we don’t hear so much about tea – it’s one reason we’ve produced this report,” said Kingston. Furthermore, he added, that while coffee had seen a “bit of a decline” tea was in growth. “With 51 million tea drinkers in the UK drinking 165 million cups a day, it’s clear how much British consumers love their tea.”

Top line results from the Tetley Tea Report show:

  • Tea presents better value for the consumer: an average cup of coffee costs £1.98 in 2015 and £2.10 in 2017; while the price of an average cup of tea cost £1.69 in 2015 and £1.77 in 2017
  • 43% of coffee drinkers also drink tea; 53% of tea drinkers also drink coffee
  • The majority of tea drinkers are aged 35 or under and are looking for a premium drink offering – 59% of 18-34 year olds are seeking to  ‘premiumise their drinks choices’
  • 7.1 million UK consumers like to try new or different hot beverages out of home
  • One in five consumers say they are drinking more tea now than they did one year ago
  • 40% of consumers will buy another item with a coffee, a cake or biscuit, but tea drinking consumers are more likely to buy something else – 62% of tea drinkers will buy something else alongside their tea purchase

With 59.3% of consumers drinking tea at home, converting these tea drinkers to drink tea out of home was key – and that was down to how it is served. Retail theatre, creating an experience around tea, in much the same way operators have done around coffee, is at the heart of growing the sector, was the consensus from the presentations at the launch of the report.

Furthermore, café and bar operators should consider that the investment in tea is far less than in coffee (with no expensive machines to buy and to upkeep) and therefore tea presented opportunities for higher margins.

Other figures highlighted:

  • 49% of consumers who have seen new types of tea have tried a new brand in the last 12 months
  • Matcha and green tea are two blends that consumers are willing to pay a little more for, and are drinking with greater frequency than they were 12 months ago
  • 29% of consumers expect to drink more green tea out of home
  • Herbal teas are growing at 9.6% year-on-year, 2016 v 2017
  • Well-known brands perform well in the café sector – with consumers looking for brands they enjoy at home: tea value growth is up 15.4% in the café sector
  • Customers are willing to spend an average £1.86 on a cup of tea in a coffee shop environment 

The report also highlighted the importance of breakfast as key in terms of driving sales, with a 31% increase in spend at breakfast out of home.

“Breakfast is booming and there are more lunch occasions too. Health too is a massive trend, with people reducing snacks and consequently breakfast and lunch becoming more important occasions. There’s a 31% increase in spend at breakfast – with tea being an important part of breakfast occasion,” said Peter Dries, director of customer and shopper marketing.

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