Tea Out-of-Home Underperforms as Brits’ Love of Coffee Takes Over

Sales in the UK of tea in the out-of-home category are underperforming against the wider coffee shop market value, according to Tea Out-of-Home 2017, the latest report in the Project Café UK Series by Allegra World Coffee Portal. The UK coffee shop sector increased by 12 percent in turnover to reach $11 billion (£8.9 billion) in 2016, with the low-performing tea out-of-home category contributing $382 million (£308 million) to the total sales. For the report, Allegra World Coffee Portal conducted 1,500 online surveys with U.K. consumers regarding tea consumption. It also conducted 25 telephone and face-to-face interview with operators, suppliers, and industry experts. Findings include:
  • K. tea out-of-home category underperforms compared to wider coffee shop market value
  • Category sales share declined from 4.1 percent in 2015 to 3.8 percent in 2016
  • Brits prefer tea the way they make it at home
  • Operators that increase range and change consumer experience have greater opportunity to grow tea-out-of-home category
While sales of tea in coffee shops is on the rise in the U.K., the growth is predominantly driven by an increase in price and by the growth of the coffee shop sector as a whole, as opposed to increased consumer participation, according to the report. The tea category currently has in fact declined over the last year, now accounting for 3.8 percent of the total coffee shop market turnover. More than 15 million cups of tea are consumed every day in the U.K., making it a staple drink. However, most of it is consumed at home or at work. Consumers drink on average 9 cups of tea per week at home, 3 at work, and just 0.65 per week in coffee shops. A recent consumer study conducted by Allegra World Coffee Portal, shows that Brits simply prefer tea the way they make it at home, with nearly a third of consumers stating that coffee shops do not make a cup of tea to their taste. 22 percent also claimed that the tea available out-of-home presents poor value for money. This has increased by 6 percent since 2014, as better tea offers have not kept pace with rising prices. The report does offer some more promising news for the out-of-home market, however: increased opportunity for growth in the specialty and iced tea categories, offering innovation and healthier beverage choices to the increasingly health and wellness conscious consumers. It suggests that “in the long term, tea innovation will be driven by leading operators who are prepared to redefine the consumer experiences of tea out-of-home.” Source: World Coffee Portal