Credit: Patrick George/Wikipedia

Trouble brewing for the tea industry

The rise of the skinny mocha latte is hitting tea sales, but the worst may be over.

by Adam Gale
Last Updated: 06 Aug 2015

Like cricket, queuing and moaning about the weather, tea is quintessentially English (even though of course it’s actually Chinese). Yet the 21st century invasion of American and European-style coffee shops has shaken the humble tea bag’s hold on our drinking habits. The volume of tea sold in the UK fell 22% to 76 million kg between 2010 and 2015, according to research by Mintel.

The fall has been particularly precipitous in the ‘ordinary tea bag’ category, sales of which fell 13% between 2012 and 2014 alone. ‘Standard black tea is struggling to maintain consumers’ interest amid growing competition from other drinks,’ said Emma Clifford, senior food and drink analyst at Mintel.

It’s perhaps not surprising. The 20th century mass market proposition (buy this, it’s cheap) is rapidly giving way across the board to a new interest in variety and discernment. A ‘mug of normal builder’s tea’ doesn’t exactly stand up to a ‘hand-roasted Tanzanian cafecita with hazelnut essence’ on the sophistication front, does it?

Besides, the growing trend towards getting hot drinks on the move lends itself better to coffee, which requires more complex equipment if it's to be made well. Tea, on the other hand, only needs a kettle,  which makes paying £2 for a cup of it seem extortionate when compared to a similarly priced coffee.

It isn’t all bad for the tea-lover, though, or indeed the tea-grower. The value of the tea market has only declined 6% in the last five years to £654m, as more expensive niche teas lead a counteroffensive against coffee. Fruit and herbal tea sales rose 31% to £76m between 2012 and 2014, while green tea sales were up 50% to £36m.

In part because of the rise of more expensive teas and in part because the overall volume decline is slowing down (it’s expected to be 69 million kg by 2020, a decline of only 9%), the value of the market is likely to start rising again next year.

Britain’s transformation from a tea drinking nation to a coffee drinking one may take longer than some expected, if it even happens at all. Coffee consumption by volume hasn’t really changed, according to Mintel, even if the value of the market has increased. And with Britons drinking 165 million cups of tea a year and only 70 million cups of coffee, there’s a lot of catching up to do.

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