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UK tea market controlled by PG Tips and Tetley

Press Release   •   Feb 04, 2013 11:25 GMT

Tea drinking has for centuries been a proud UK tradition, leading to such coinage as tea parties, and tea breaks. Tea is a distinctly British beverage, and more than 60 billion cups of tea are consumed per year in the United Kingdom alone. Britons are the world's second-largest tea drinkers per capita, with over 1,200 varieties of tea sold around the country.

The UK tea market is primarily driven by high penetration of tea among aged population, e.g. 88% of population above 65 drink tea, this percentage drops to 73% among younger population (15-34 year old).

"Breakfast tea" accounts for close to 90% of sales value is declining as younger generation moves away from tea to other alternatives.

The majority of tea consumed in the United Kingdom is of the black tea variety, made primarily from a blend of East African and South Asian tea leaves. Given that very little tea is actually grown in the United Kingdom, the industry is subject to the volatilities of global sourcing, such as weather, crop disease, domestic political situations and other external factors.

The UK tea market is also a great source of revenue for India's tea industry as Britons are the biggest consumers of tea per capita.

The United Nations food agency, the Food & Agriculture Organization (FAO), has forecast that by 2021, Britons will be consuming 15% less tea than 15 years earlier. This decline has emerged as a concern for the Indian tea industry, whose exports to the UK have dwindled to 16 million kg from 22 million kg over the last five years.

The UK market is dominated by five brands - PG Tips and Tetley, Premier Foods (was bought by an Indian firm: India's Apeejay Surrendra Group), Associated British food and Bettys & Taylors. Tetley leads the market with 27% share, followed by PG Tips with about 24% share. Premier food is in third place, with about 13% share, Associated British food is 4th with about 11% share and Bettys & Taylors 5th with about 6% share.

Many of these players are now concentrating on herbal / green tea. For example Pukka Herbal, Yogi Tea and Health-E-Teas are focusing on this fast growing niche segment. Another key characteristics of these niche players is online selling which is not the delivery model followed by market leaders such as Unilever and Tetley.

For more information on the UK tea market, see the latest research: UK Tea Market

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