Tea market in decline

The notion of the British as inveterate tea-drinkers is under attack as the beverage faces increasing competition from healthier options. The good old English cuppa is under threat from the rising popularity of herbal teas, soft drinks, bottled water and fruit juice, according to the latest Mintel report.

Over the past two years, sales of tea bags have declined by 16 per cent, while loose tea sales have dropped by 9 per cent. The tea market is dominated by tea bags, which has a 63 per cent share. Over the past 5 years, the market as a whole has shrunk by 12 per cent, from£707 million in 1999 to£623 million last year.

Almost 80 per cent of people in the UK are tea drinkers, with the majority in the older age brackets. Older people are more likely to drink tea more frequently throughout the day. Younger consumers are veering towards the more healthy caffeine free options of fruit teas, although those products still only account for 27 per cent of the tea market in the UK.

Mintel senior market analyst Ellen Shiels said: 'Positioning tea as a healthy drink has done much to curb overall market decline. Consumers have been trading up towards premium speciality tea and herbal fruit tea, which have helped to slow the decline in market value, in part caused by tea prices being eroded by heavy price discounting and promotions.'