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Tea trends in Asia

Source:Mintel

Date Published:2/13/2018 12:02:00 PM

Mintel releases global data on tea; shows growing potential of hot tea and other trends in Asia Pacific    

No doubt tea is one of the popular drinks in Asia Pacific, from loose leaf to ready-to-drink.

The new report, Mintel Global New Products Database (GNPD)  suggests hot tea products are the new rage, with Asia Pacific representing 27% of global new tea launches***. Ready to drink (RTD) was at 13% of global tea launches. In comparison, Europe accounted for 30% of hot tea launches, and RTD tea launches was at 7%. North American hot tea launches accounted for 4%, and RTD tea was at 3%.

“Although hot tea continues to be the biggest tea subcategory globally, RTD tea has started to build its base in the global tea market—following the same developments seen in the global coffee market. The RTD tea landscape is changing dramatically; having suffered for years from a ‘cheap’ and unhealthy image, the category is now undergoing a lifestyle makeover. Artisanal production attributes, such as cold brew, are helping create a new premium tier in the segment. Our research shows that cold brew is just emerging as an upscale taste and quality descriptor in RTD tea. Better-for-you innovations from major beverage companies are further boosting the development of the RTD tea category,” said Julia Buech, Global Food & Drink Analyst at Mintel.

The ‘cold brew’ descriptor took 1% of global RTD tea launches in 2017, according to Mintel GNPD. Asia Pacific took in 55% of cold brew launches, and Europe 25%.

Tea bags were the leading format type of hot tea launches in 2017. North America represented 84%. In Europe, tea bags constituted 75%, and in Asia Pacific, 45%.

Asia Pacific is currently driving loose formats in packaged hot tea innovation. Of all new tea launches in 2017, loose tea formats accounted for 36% in the region, as compared to 19% in Europe and 12% in North America.

“Most Asian consumers are, at the end of day, traditionally inclined to enjoy tea in loose formats—which is also likely the reason behind Asia Pacific’s lead in driving loose formats in packaged tea innovation. However, the tea bag category in China, and the wider Asia Pacific region, has definite growth potential as we see more and more tea bag innovations coming from Asian tea manufacturers,” said Loris Li, Associate Director, Food and Drink, at Mintel.

Energy-boosting tea

Energy is the focus of innovation to help tea compete with coffee. In 2017, teas described as ‘energy-boosting’ accounted for 11% of all functional tea launches.

India biggest packaged tea market

In 2017, India absorbed 678,200 tonnes worth of packaged tea in total retail volume, the highest globally; China followed with 576,800 tonnes**. It may be surprising that China comes in second, however Mintel explains that Chinese consumers are more into loose tea formats.

“Traditionally, Chinese consumers prefer fresh tea in loose formats, so it makes sense that our research shows that India is ahead of China as the world’s leading retail packaged tea market,” said Loris Li, Associate Director, Food and Drink, at Mintel.

In 2017, 78% of Chinese consumers said they drank freshly brewed loose tea; 49% of these respondents said they were frequent consumers of ready-to-drink tea, whilst 45% revealed they also consume tea bags.

Per capita consumption

India and China are the largest consumers, but research shows consumption in other countries is also high. The other top three major consumers of packaged tea are Turkey at 173,400 tonnes, Russia at 134,200 tonnes, and Japan at 92,900 tonnes, as reported in latest research from global market intelligence agency Mintel

Mintel also reports that although Turkey is only third on the list, it has the highest per capita consumption globally, at 2.15kg of packaged tea. The second highest per capita consumer are the British at 1.15kg; the Russians at 0.91kg, Japanese consumers at 0.74kg, and German consumers at 0.67kg.

“Looking beyond top-level market sizes and consumption figures, there is an interesting new tea culture brewing in both hot and ready-to-drink tea, fuelling global and regional innovation activity," commented Julia Buech, Global Food & Drink Analyst at Mintel.

Coffee or tea?

Mintel research reveals that 62% of US adults drink coffee in the morning, while 24% drink tea. In China, the door is open for tea to adopt an ‘energy drink’ status; as many as two in three (65%) drink RTD tea when doing outdoor sports (eg jogging, playing football, cycling) while 58% drink RTD tea when doing exercise at gym or sports centres. In the UK, over one in five (22%) consumers are interested in seeing ‘energy-boosting’ as a health or functional benefit provided by tea.

“In a world that is becoming more health conscious, naturally functional drinks are ever more relevant. Tea consumers continue to show interest in products that can target specific ailments and provide diverse functions, from energy-boosting and anti-inflammatory to slimming and relaxing benefits. In this saturated field, ‘energy’ has grown in significance as a focus of innovation activity among tea companies and will continue to be a market with potential in the near future,” Buech concludes.

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*Mintel's definition of packaged tea market talks about household consumption of packaged tea (this excludes out of home and unpackaged, loose tea formats)

**Mintel estimates

***Mintel definition of tea launches includes packaged hot tea and ready-to-drink (iced) tea

 

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