UK tea sales in hot water: Does a 22% drop signal a crisis for the British cuppa?

UK volumes sales of sweet biscuits fell from 451m kg in 2009 to 413m kg in 2014, attributed to consumer concerns about sugar. Meanwhile, tea retail sales plunged 22%, from 97m kg in 2010 to 76m kg in 2015, according to data from Mintel.

However, there are ways for the tea sector to revive itself. With the popularity of TV show The Great British Bake Off - and a new series which starts tonight - tea can be positioned as the perfect accompaniment to home baked cakes.

Tea brands can also promote new ways of consuming tea in order to appeal to a wider audience.

Tea trouble

The sale of ordinary tea bags dropped by 13% from £491m ($765m) in 2012 to £425m ($662m) in 2014. Fruit, herbal and speciality teas have been growing, however.

Fruit and herbal teabag sales rose by 31% from £58m ($90m) in 2012 to £76m ($118m) in 2014. Speciality teabags rose by 15% to £63m in this period, while green teabag sales were up 50% to £36m.

Standard black tea is held back by a plain, uninspiring image: an image that does not appeal strongly to consumers who are becoming more adventurous in their choices, explains Mintel. Thanks to a growing ‘foodie’ culture, people are looking to more interesting alternatives to a standard cup of tea – demonstrated by the rise of fruit, herbal, green and speciality teas.

Emma Clifford, senior food and drink analyst at Mintel, told BeverageDaily.com that black tea producers should turn over a new leaf and think creatively about wider consumption occasions.  34% of tea drinkers would be interested in making their own iced tea, for example.

“I think a complete rebrand would be risky; a major change could potentially be off-putting to loyal users,” she said. “Simply providing people with ideas about how to use tea in other ways, for example on their social media sites, and raising awareness could be beneficial. Twinings, for example, already does this quite actively.”

Meanwhile, the falling sales of biscuits could be addressed by looking to home-made cake instead: 86% of  tea drinkers still believe tea is a good companion to biscuits or cakes.

Clifford said tea could make the most of the momentum behind home baking, helped by TV show The Great British Bake Off (the show where 12 amateur bakers tackle challenges set by judges Mary Berry and Paul Hollywood).  

“The huge growth that was seen in the home baking market in recent years has come to an end and we saw the value of the market fall in 2014," she said. "Consumers’ concerns over sugar – heightened by the high-profile sugar debate – are likely to have played a role in this. However, home baking none the less remains extremely popular, therefore presenting an opportunity.”

Healthy positioning

One reason fruit and herbal teas have done so well is because drinkers believe in the mood enhancement qualities of the drinks (43% agree that herbal teas can affect mood) and green tea is associated with health benefits.

So could black tea also tap into the success of healthy positioning?

“I think that there is scope for operators in the standard tea market to potentially increase the healthy image of these products as it is only green tea and fruit/herbal tea which currently have strong associations with healthiness,” said Clifford. “Only one in 10 adults associate tea with being healthy.”

Tea time

Despite its decline, it must be remembered that the humble cup of tea still accounts for a large chunk of the UK tea market.

“I can’t really speculate about what could happen any further in the future, but fruit/herbal and green teas would have a very long way to go in order to match black tea in terms of sales.”

However, Clifford warns the outlook for the overall market remains challenging.

“Further growth is expected from fruit and herbal teas and green teas over the next five years, as manufacturers continue launching products into these segments to capitalise on the growing popularity of these options. However, this is not expected to make up the shortfall from falling volumes of black tea.”