It’s that time of year again when hot drink sales move up a gear as shoppers seek out familiar friends like tea and coffee to ward off the colder weather. However, the market is evolving and retailers must evolve alongside it.
With all the furore over coffee in recent years, retailers could be forgiven for thinking that tea has gone off the boil – but nothing could be further from the truth, as Peter Dries, Director of Customer and Shopper Marketing at Tetley explains: “Tea remains the nation’s favourite hot beverage with 165 million cups drunk every day and buying numbers actually on the increase”.
But there’s a catch. Or to be more precise, a shift in tastes. As in many other categories, tea drinkers are increasingly looking for healthier options. Dries comments: “According to a study by Kantar, 31% of consumers select products for their health benefits, naturalness and positive nutritional content. Tea’s good fit with health is benefiting sales, particularly of healthy sectors like decaf, green, fruit and herbal as well as the growing category of functional teas.”
He cites Nielsen data from August this year which demonstrates that in Scotland, outside of everyday black, all core sectors of tea are showing value growth. In Total Impulse value growth is coming from everyday black decaf up 4.8%, fruit and herbal up 7.8%, green teas up 11.2% and Redbush up 1.2%.
“For local retailers, the tea shopper is a valuable shopper,” continues Dries. “Of all the hot beverages, tea buyers are more likely to buy complementary products with their tea purchase. Common basket companions are milk and bread, as well as cakes and pastries for on-the-go purchases, and biscuits and cakes to enjoy at home.”
The key to unlocking those increased basket spends is focusing on big brands. Dries again: “Relative to other categories, own-label is weak in tea and tea brands are a major influence when deciding what to buy, 87% of shoppers say that brands are an important consideration when buying tea.”
Consequently, it will be worthwhile focusing your efforts and shelf space on the brands delivering the goods. Three brands alone deliver the bulk of sales in Scottish convenience by volume, according to the same Nielsen data from August:
- Tetley 31.5%
- PG 29.9%
- Yorkshire 16.6%
Everyday black teas still dominate sales (over 93%) but it will pay to balance these with teas from other sectors which deliver higher value sales. Everyday decaf is a must-stock stock as its buyers typically won’t purchase anything else. Green tea is a continually growing opportunity, with Tetley Pure Green 50s the top selling SKU in total market.
Redbush tea – naturally free from caffeine – is another interesting option and, once again, Tetley is the top brand in the sub-category.
It’s also possible that Functional Teas could be the next big thing, as more and more shoppers seek out nutritionally-enhanced products.
Dries comments: “Tetley Supers were the first range of functional teas with added vitamins and EFSA-approved health claims to enter the market.
“Spanning Green Tea, Fruit and Herbal and new Super Squash, the Tetley Supers range includes 20 variants with seven different health benefits. It has been a huge success, bringing new customers into both the green and fruit & herbal segments, delivering strong sales and repeat purchase.”
It’s also worth noting that demonstrating the offer of value is important. In smaller stores PMPs have an important role to play – but it’s vital to get the mix right and leave room for higher value sales from products that can stand alone without being heavily promoted and discounted.