Tea Market Report: Italy

Although tea is not part of the Italian tradition, consumers here increasingly accept tea and are keen to try new types and flavours. The penetration of tea is increasing in Italy and in 2010 exceeded 60 percent of the total population, according to industry sources.

The acceptance of premium teas is evident. Consumers now look for more variety in tea, displaying greater appreciation of specialty teas such as white tea. They are also attracted to health-positioned tea and green tea in particular, which is very well known for its antioxidant properties. Fruit/herbal tea products, which are naturally caffeine-free, were also highly appreciated by consumers, thanks to their relaxing, digestive and slimming properties.

Competitive landscape

The competitive environment in tea is more fragmented compared to coffee, with the leading player D&C SpA accounting for a 17 percent share of retail sales in 2010. The company’s leading position is largely due to the success of the Twinings brand, by far the most marketed and recognised tea brand in Italy. In 2010, Twinings black specialty tea held a 57 percent share of retail sales. Across the tea category, the second ranked player in tea is Star – Stabilimento Alimentare SpA, a domestic company, which held a 14 percent share in 2010 through its Sogni d’Oro and Star Tea brands that offer a green tea variety. Unilever ranks third ranked with a 12 percent share due to the performance of its Lipton brand and with Teati.

Prospects

Increasing consumer interest in wellness and specialty teas and flavours will drive sales growth over the next few years. Household penetration is expected to grow, with more consumers looking for medicinal/herbal products and becoming aware of the health properties of tea. Consumers are likely to seek out more green tea, fruit/herbal tea and white tea, which are perceived as healthier than black standard and specialty tea. However, tea products such as white tea or even red (South African rooibos) are not widely known in Italy, which may slow the demand for these health-oriented products. Overall, the increasing demand for health and wellness products will be an important driver of retail volume and value growth over the forecast period, with domestic companies such as Star Alimentare Spa and Pompadour Srl offering complete and interesting flavours in any of the above mentioned categories.

Marco Bertona is director of ADeMaThe, the Tea Association of Italy. If you would like more information about Italian tea trends, or have general questions or comments, please feel free email Bertona at info@maestridelthe.it, phone +39 0321-688-263 or visit www.maestridelthe.it.