UK tea processing market to reach a valuation of £1 billion by 2018-19

Press Release   •   Aug 21, 2013 14:25 BST

The UK tea processing market has been forecast to increase at a compound annual growth rate (CAGR) of 2% over the next five years, increasing from a total of total £934.3 million in 2013-14, to reach a valuation of £1.0 billion by 2018-19.

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.

In the face of the economic malaise and declining consumer spending, the United Kingdom tea processing market has remained resilient, largely due to its staple and inexpensive nature.

While 88% of Brits aged over 65 drink tea, penetration drops to 73% for younger (15-34 year-old) adults. With ever increasing competition in the soft drink sector and more consumers dropping out of the category than are actually entering it, the next generation of traditional tea drinkers may be in jeopardy.

Tea is capitalising on the short-term increase in the share of over-65s but failing to convert the younger generations in significant enough numbers to replace those falling out of the market.

The recent economic climate has played a big part in consumer attitudes to tea and two of the worst winters on record have also assisted the market, not to mention heavy discounting activity.

However, the sector remains too reliant on traditional English breakfast tea, which is failing to resonate with younger consumers, and needs to do more to attract new consumers to the health benefits of herbal tea and the premium tasting benefits of speciality.

The domestic industry is dominated by multinational giants such as Tata Global Beverages and Unilever, which are highly vertically integrated and boast a strong portfolio of brands such as Tetley, PG Tips and Lipton.

They have also stimulated demand in a mature market through new product introductions that focused on the consumer trends related to health, economy and convenience.

Major tea brands have also embraced the concepts of ethical sourcing and sustainability in their products, associating themselves with initiatives such as the Rainforest Alliance.

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

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