Sharp Declines in Consumption of Traditional British Tea

British tea drinkers are in the midst of an unprecedented transition. Consumption of traditional tea has declined 22% in the past five years. Sales are down 6% since 2010. Dipping a tea bag for 30 seconds in a mug has lost its allure.

Headlines in London announced the “death of the biscuit” following publication of a report by consumer market research firm Mintel International indicating a 13% decline in sales of traditional teabags. Tea consumed in country fell from 80 million kilos in 2012 to 66 million in 2014. Consumption was almost 100 million kilos 10 years ago. Mintel predicts annual decline of 7% for 2015. Sales will continue to fall through 2020 with annual volume below 70 million kilos.

WTN150817_StarbucksUKSales of ordinary tea bags were $665 million in 2014, down from $768 million in two years.This poor performance masks very contrasting performances from the different segments within the tea market, according to Mintel.

Black tea is being “held back by its rather uninspiring image” according to Mintel’s Senior Food and Drink Analyst Emma Clifford. “This has translated into the downfall of the tea category overall,” she said. The category is “struggling to maintain customers’ interest amid growing competition from other drinks,” writes Clifford.

Meanwhile sales of herbal tea grew 31% to $120 million between 2012 and 2014.

Specialty Tea

According to Mintel’s Clifford “sales of alternative teas have been going from strength to strength.” Sales of specialty teabags rose by 15% to $98 million and sales of green teabags increased by 50% to $56 million between 2012 and 2014, she writes.

“Mintel’s research shows that many fruit and herbal tea drinkers believe in the mood enhancement qualities of these drinks with 43% agreeing they believe herbal teas can affect your mood. Meanwhile, 44% of green tea drinkers say they mainly drink these products for health benefits. In comparison, the top qualities that consumers associate with standard tea are traditional (60%), refreshing (43%) and comforting (42%),” according to Clifford.

WTN150817_BritishTeaDeclinesDespite the strain on the market, Brits do still have a warm place for a cup of tea in their hearts, writes Clifford. “Indeed, three quarters (76%) of Brits drank standard tea in the month to April 2015 and over half (54%) said they drank it at least once a day. Men aged 16-44 are Britain’s biggest tea drinkers, with 80% drinking tea in the month period, whilst women aged over 65 are the least likely to consume the beverage, with three in five (61%) of this group doing so,” according to Clifford.

“Reflecting a growing ‘foodie’ culture in the UK, people are branching away from standard tea bags and towards more interesting alternatives,” according to Clifford who noted sales of sweet biscuit fell from 451 million kilograms in 2009 to an estimated 413 million kilograms last year. Almost half (46%) who eat biscuits do so with a hot beverage and 86% of tea drinkers say tea is a good accompaniment.

Traditional biscuits with tea are giving way to coffee and pastry.

The ready availability of specialty coffee at local shops accounts for much of the loss in volume. Per capita coffee consumption is actually less than 2006 but the number of coffee shops has increased to 16,501 as chains such as Costa coffee (1,831 outlets) and Starbucks (791) continue their expansion.

Costa has a 46.5% share of the UK coffee shop market according to Allegra Strategies which reports Starbucks at 27% and Caffe Nero with a 13.8% market share.

Britons drink less coffee than most in Western Europe. Coffee at home accounts for the majority of daily cups. The UK per capita average is 2.8 kilos less than half of northern Europeans who spend significantly more per cup. This is due to the fact that most Britons continue to drink instant coffee. As they switch to fresh brew at home, thanks to single-serve machines, or when out-and-about thanks to the proliferation of coffee shops, Britons are selecting more expensive, better tasting brew.

In a feature published in The (London) Telegraph Andy Harrison, chief executive at Whitbread, which owns Costa Coffee, explains that coffee shops have filled a hole in British society previously met by pubs which are closing at a rate of 31 per week.

“Families and women in particular use coffee shops for social gatherings, he says. He also points out that women now have greater spending power than in the past,” reports the Telegraph.

“Think of the coffee shop as a social venue,” said Harrison. “What we have seen is the coffee shop market has grown at about 5% per year throughout the recession even in the most economically challenged parts of the UK. We think the reasons behind that are to do with things like the growth of female independence, female spending power. Over half of our customers are women,” he told the newspaper.

Source: Mintel International Tea UK 2015


Dan Bolton

About Dan Bolton

Dan Bolton edits STiR Tea & Coffee Industry International. He was formerly editor and publisher of World Tea News and former editor and publisher of Tea Magazine and former editor-in-chief of Specialty Coffee Retailer. He is a beverage retail consultant and frequent speaker at industry seminars and conferences. His work has appeared in many beverage publications. He was a newspaper reporter and editor for 20 years prior to his career in magazines. Dan is the founding editor of Natural Food magazine and has led six publishing ventures since 1995. He lives in Winnipeg, Canada.