Canadian Millennials Warm to Hot Tea

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Millennials’ spending on tea set to double in next three years.

Spending on tea by Canada’s Millennial tea drinkers is expected to double by 2020, according to the Canadian Tea and Herbal Association.

Millennials (aged 19–37) currently make up more than a third of all Canadian tea drinkers, according to association president Louise Roberge. The median age of all Canadians is 40.8 years and most (82%) live in urban areas, according to government statistics.

January is Hot Tea Month, so it’s the perfect time to celebrate the virtues of tea, said Roberge. Canadians consume 0.43 lb of hot tea, spending $25.50 per year compared to Americans who drink an average 0.26 lb and spend $15.95 on hot tea.

“Our multicultural society plays a role in the popularity of tea in Canada, since tea traditions from around the world have all become part of our multicultural milieu,” said Roberge.

The country of 36 million has seen a large influx of immigrants and now houses approximately 6 million Asians born outside of Canada. During the past year, 320,000 immigrants, including 30,000 Syrians, moved to Canada, which grew by a total of 437,815 people last year.

“The country had not received such a large number of immigrants in a single annual period since the early 1910s, during the settlement of Western Canada,” Statistics Canada said in a release.

“As we welcome new Canadians in increasing numbers, the influence of tea culture and tea traditions in our society will continue to grow and unite us,” said Roberge..

In September, Chris Monk with Nielsen market research said that while “boomers (48–67) are important consumers today, millennials will drive future growth.” Millennials are well-informed shoppers, according to a Nielsen Homescan survey. Monk reports that half check reviews and coupons online and that 57% of millennials say they know the stores that offer the best price. He added that 73% of millennials say price is the first thing they look at when purchasing grocery items.

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Hot tea on the rise among Canadian millennials.

He noted that sales of specialty tea (when herbal teas are counted) is growing, but between 2015 and 2016 sales of specialty teas (C. sinensis) alone are not outpacing regular in traditional retail channels. Sales of all hot beverages in all channels in Canada through April 2016 were estimated at $1.8 billion in 2016, with hot tea accounting for $232 million in sales. Coffee, by comparison, earned $1.3 billion.

Grocery is still the place where most people shop for tea (47%) but that figure drops to (37%) for Canada’s millennial tea drinkers, said Monk. The study showed 12% of the general population shopped for tea at Walmart and Costco in the past year and 3% buy tea at department stores.

“Millennials report buying tea out of home or at specialty tea and coffee shops,” said Monk. Millennials in Canada are more likely than the general population (17% vs. 13%) to buy tea and tea accessories at a Tim Horton’s style coffee shop, followed by a specialty tea shop like DAVIDsTEA (15% vs. 12%), with 13% versus 9% reporting a tea purchase at a specialty coffee shop such as Starbucks in the past 12 months. Only 1% purchased tea online and 1% reported buying tea at a traditional tea room.

Boomers prefer traditional sit-down restaurants such as Swiss Chalet or Boston Pizza, said Monk. “Millennials are your growth cohort,” he said. “Go after them!”

Source: Tea and Herbal Association of Canada, “Tea: Market and Consumer Canada & US” a presentation at the North American Tea Conference