This article is part of our Hot Beverages Digital Feature.

Britain’s taste in tea is going up market. Sales of black tea have fallen by 1% as fruit & herbal, green and speciality teas steam ahead [Kantar Worldpanel 52 w/e 19 July 2015].

TEA
  Value (£m) Share % y-o-y %
Black tea 450.7 69.6 -1.0%
Fruit & herbal 78.8 12.2 5.2%
Green 37.3 7.1 15.5%
Speciality 46.1 5.7 8.5%
Tea other 35.0 5.4 -7.8%
Kantar Worldpanel 52 w/e 19 July 2015

Tea’s biggest brands have taken a hit – sales of PG Tips are down 3.4% on volumes down 7.3% while Tetley saw sales tumble 10.1% on volumes down 8.1% [IRI 52 w/e 20 June 2015].

“Habit is the number one reason for black tea consumption but we are seeing a barrier here, with younger consumers looking for variety and choice in their beverage consumption,” says Faye Newman, senior category manager for tea at Unilever UK, owner of PG Tips. “This has translated into value and volume growth across sectors such as fruit, herbal and green.”

Brands can’t write everyday black tea off just yet, though - it still accounts for nearly 70% of tea sales in the UK. Yorkshire tea is bucking the trend, gaining £2m in sales with value up 3%, which it partly attributes to its strong advertising campaign.

Others, meanwhile, are chasing growth areas through diversification. PG Tips, for example, is courting younger consumers with its new Keep It Tea campaign alongside a redesign in May – the biggest in 19 years. It’s also ventured into speciality teas, significantly undercutting established players in the market in doing so, with new Earl Grey, Assam and English Breakfast pyramid bags.

Tetley, on the other hand, brought three of its premium teas together under a new umbrella brand called The Blend Collection. Tetley Extra Strong, Tetley Blend of Both and Tetley Kenyan Gold have a high-end design to clearly signpost a premium product selection for shoppers, according to the brand, which claims they have been been proven to attract people back to the tea fixture.

HOT BEVERAGES BESTSELLERS
 BRANDS VALUE VOLUME
  £m y-o-y % kg (m) y-o-y %
Nescafé 429.4 1.3 22.2 2.0
Own label 220.5 -4.7 28.1 -4.3
PG Tips 143.4 -3.4 21.2 -7.3
Kenco 130.1 -2.0 6.1 -1.6
Twinings 110.0 4.7 5.5 1.7
IRI 52 w/e 20 June 2015

“Sales in the premium arena will come from encouraging shoppers to try a wider range of teas and adding these to their everyday tea purchase,” says Andrew Pearl, Tetley director of customer and shopper marketing. “They offer shoppers a real step up in taste experience for just a small increase in cost.”

Healthier segments such as green and Redbush offer higher margins, according to Tetley, and are growing in popularity. Sales of green tea are up 15.5% taking it to £37.3m in value [Kantar]. Tetley has been innovating in this arena with its four-strong range of Super Green Teas. “It’s about having something new that is bang on trend,” adds Pearl.

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