High street coffee shops have taken the high ground in terms of our out of home consumption, but tea continues to be the nation’s favourite hot beverage overall with buyer numbers up 0.3%, says Peter Dries, Director of Customer And Shopper Marketing at Tata Global Beverages, owners of the Tetley brand:

“The tea category has been changing for some time. Evolving lifestyles and interest in health has created space for new products delivering different taste experiences to shoppers and higher value sales to retailers. Today the category is full of choice, from a relaxing, comforting tea break to maintaining hydration with a healthier drink; not to mention the opportunity to increase wellbeing with teas with added vitamins. A wide range of teas is now available to suit all tastes, needs and moments.

“The challenge for retailers is to keep pace with changing tastes and what drives purchase and use their knowledge to adapt their tea range to maximise sales. Getting it right can result in greater sales and profits in tea and other categories.”

The tea shopper is a valuable shopper to retailers in other ways too, says Peter Dries. Out of everyone buying hot beverages in store, tea buyers are more likely to buy complementary products with their tea purchase. Milk, bread, cakes and biscuits are the common take home basket companions.

Changes in consumer preference have impacted on sales of everyday black teas, but this doesn’t mean that these have lost their importance. Core everyday black teas still account for around 78% of all teas sold, so remain a critical backbone of the category. Peter Dries also points out that 87% of shoppers say that brands are an important consideration when buying tea.

While everyday black tea’s importance should not be neglected, including a selection of different teas in the mix is essential. In grocery multiples everyday black teas account for 54.7% of category value sales, flagging a possible over-reliance on everyday black tea sales:

“Better returns will come from having a strong black tea offering, balanced by a mix of non-black teas selected to appeal most to your customers.”

An important part of the tea fixture, Decaf appeals to consumers for different reasons depending on their needs. Consumption among retirees, pre-family shoppers and after 7:00pm are all showing growth. With decaf taste is all important and Tetley is the dominant decaf brand.

Our taste and requirements from hot beverages change over the day, with decaf becoming more important as we wind down. Also new from Tetley is Tetley Decaf Sleep Easy, a blend of decaffeinated black tea with lemon balm, lavender and vanilla to help deliver a restful night’s sleep. Tetley Decaf Sleep Easy is available in packs of 40.

Meanwhile tea’s good ‘fit’ with health continues to be a draw for consumers and value sales are up across the board for products that fit the bill: fruit and herbal (up 18.4%); Green (up 16.5%) and Redbush (up 8.9%.) Fruit and Herbal and Green are up in volume too. Tetley has a strong portfolio in these healthy sectors and is number two brand in green tea and the dominant player in Redbush.

Tetley is also active in the emerging market for cold infusions. The desire to hydrate and quench thirst are the biggest drivers of cold drinks sales, and Tetley Cold Infusions are an easy and tasty way to add a fruity burst of flavour to water, perfect for warmer seasons and to enjoy on the go. Available in packs of 12 infusions they come in five flavours, Raspberry & Cranberry; Passionfruit & Mango; Orange & Peach; and Mint, Lemon & Cucumber and new Strawberry and Watermelon.

Staying with tea, the latest instalments of Yorkshire Tea’s successful ‘Where everything’s done proper’ TV adverts are back on our screens, led by two proper famous Yorkshire-born faces. Acting legend Sean Bean and world-renowned magician Dynamo star in the adverts which once again see Yorkshire Tea recruiting new members of staff in comical scenarios that show their jobs being done proper. Ben Newbury, Senior Brand Manager at Yorkshire Tea says, “We’re chuffed to bits with these new adverts and hope everyone loves them as much as we do. Sean Bean and Dynamo are experts in their crafts and truly epitomise the art of ‘doing things properly’ – an ethos that is central to absolutely everything we do here at Yorkshire Tea. We’re so pleased we could recruit them to help spread the message of properness.”

In the new ads Sean conducts a proper staff induction taking inspiration from his iconic film characters while Dynamo works his magic in the Yorkshire Tea warehouse without a fork lift in sight. The adverts were both filmed at Yorkshire Tea’s warehouse and offices in Knaresborough with employees from across the business starring alongside Yorkshire Tea’s new recruits.

This is the second instalment in the ‘Where everything’s done proper’ advert series which launched in 2017 starring Sir Michael Parkinson, the Kaiser Chiefs and the Brownlee Brothers. The new ads are part of a £3m TV campaign that will see them aired to millions of viewers over the next 2 years.

Coffee trends in retail are being led by our demands in out of home coffee consumption, says Michael Haynes, Category Team Leader, Jacobs Douwe Egberts, as consumers seek to enjoy the coffee shop experience in a quick, convenient home format.

Cold coffee is one of the fastest growing trends in out of home coffee consumption. In retail, the ‘cold coffee’ category is now worth £106m, up +38% on last year, suggesting there is still an opportunity for retailers to get onboard. In response, last year JDE launched its Kenco Iced Latte range with four flavour variants; Original, Vanilla, Salted Caramel and Coconut. Since launching in July 2018, Kenco Iced Latte has sold over 2m cups, with Salted Caramel the most popular flavour. Kenco Iced Latte allows consumers to create a perfect Iced Latte at home just by adding cold water.

Consumers are now drinking coffee as more of an ‘indulgent treat’, and their desire for coffee-shop style drinks and increasing desire for convenient products is driving value sales growth of speciality coffees in retail. Kenco’s specialities have particularly benefited from this trend, growing +56%. For those moving beyond traditional instant coffee, Kenco Speciality Mixes, including Latte, Cappuccino, Flat White and Mocha allow consumers to enjoy a coffee shop style coffee in the comfort of their homes, just by adding hot water.

In the instant coffee category, consumers continue to trade up to higher pence per cup coffee segments, reflecting the ongoing premiumisation trend. Reflecting this trend, microground coffee continues to see share growth in the instant coffee category as consumer attention turns to higher quality instant coffee.

Benefiting from this premiumisation trend, Kenco Millicano is seeing sales growth of 3.1%. Kenco Millicano includes 15% finely milled ground coffee, delivering a deeper flavour and fuller mouthfeel bringing it closer in taste profile to filter coffee. Kenco Millicano allows consumers to enhance their coffee drinking experience at home, without compromising on quality.

The ongoing trend of premiumisation and bringing the coffee shop into the home is also fuelling the growth of Roast and Ground coffee, which has seen value sales growth of +6% in the total market. In response Kenco is returning to its roots and has launched new roast and ground coffee in both flavour variants, Smooth and Rich, bringing this well loved and respected brand into a new format to meet growing core consumer trends.

At over 63% the Instant segment makes up the majority of the coffee category, says Jeff Beedie – Head of Category and Channel Development at Lavazza UK, who recently entered this area with a premium offering in freezedried coffee. The newly relaunched Carte Noire, which won ‘product of the year’ award for the Coffee Category in 2018, reflects Lavazza’s commitment to providing a great product. The range was launched in two variants, Carte Noire Classique Instant and Carte Noire Decafeine Instant, and is available across five SKUs, including 100g and 200g formats.

Before its withdrawal from the market in 2016, Carte Noire instant coffee was worth £35m (Nielsen 2016) and was a top five brand (Nielsen 2016) (in value) within Instant coffee. Lavazza has ambitions to replicate this performance and grow the value of the brand to £42m, including £8m of incremental category growth, over the next two years.

Lastly, brand loyalty continues to be a driver in the hot beverages sector, says Jeff Beedie: “We know that coffee is a destination category and that over a quarter of coffee shoppers are driven to store to buy coffee. During the period that Carte Noire Instant was off the market, Lavazza received hundreds of messages via social media calling for the products’ return, which exemplifies customers’ loyalty to brands and, in this case, coffee products.”

To drive incremental sales, Lavazza UK say it is important for retailers to promote a breadth of segments, not just focus on the best sellers in Instant coffee. This could be pairing a premium instant micro-ground coffee such as Prontissimo! with mainstream instant products, or including a ground coffee or beans product to provide an offer for these shoppers. Retailers can also drive incremental purchase through promoting by occasion with other similar categories.

With the introduction of Lavazza’s sub-brand, Tierra!, Lavazza has shown great commitment to sustainability. The product range is made up of three distinct SKUs, each either organic or with a unique single origin, which are key areas for consumers when selecting a premium coffee. Single Origin Coffee is becoming increasingly popular as consumers become aware of the provenance and origin of their food and drink. The same goes for environmental credentials, such as fair trade and organic certifications.

Lincoln & York is one of the UK’s leading private label coffee sourcing, roasting and packing specialist whose coffee is sold to 300 customers across UK & Europe. Karen Yates-Hills, Commercial Director, Lincoln & York has seen the hot beverages market changing, led by the growth in out of home:

“The average consumer buys almost two cups of coffee per week, clearly showing that coffee continues to dominate the out of home hot beverage industry and has overtaken tea as the hot beverage of choice. As a result, a large number of out of home operators are upping their coffee game to stay relevant to consumers. We’ve seen a massive push on innovation and investment from players in the industry in a bid to remain competitive and cater to changing consumer demands.

“Coffee sales have increased 10.8% year on year across the grocery trade. In comparison, we’ve seen a 2.8% decline in tea. Own Label coffee makes up 18% of the grocery market, with brands making up over 80%. In the last year, own label has grown twice as fast as the branded competition, +12.4% versus 5.3, a clear indication that the coffee market is not showing any signs of slowing down. As consumer tastes are changing, so do the best sellers.

Finally, with cold brew coffee catching on, Lincoln & York launched their Black Eye Cold Brew at last year’s London Coffee Festival, offering a naturally sweeter taste, without the sugar, making it an ideal summer beverage. Last year, they also launched ‘tea-bag style’ coffee bags, perfect for individual use, on-the-go, travel and hospitality sectors.

Other beverages are also available… Looking beyond tea and coffee, hot chocolate continues to play a huge role in our homes and hearts, says Michelle Frost, general manager at Mars Chocolate Drinks and Treats, whose hot beverages range includes traditional, instant, malted, low calorie, fuss free or indulgent drinks. In 2018, says Michelle, UK households purchased more than 28 million kilograms of hot chocolate, cocoa and malted products.

The total hot milky drinks category has an annual sales value of £186 million with hot chocolate representing 66%, equating to an annual sales value of £123 million. Brands continue to dominate, with 84% of value sales. Michelle adds: “We continue to innovate and develop our range of hot chocolates by introducing exciting new variants with products relevant to today’s consumers. Our range includes much loved confectionery brands Galaxy and Maltesers, creating on shelf appeal and offering a multitude of options for consumers and retailers alike.

“We know consumers are keen to recreate different and delicious hot beverages at home, and so earlier this year extended our range to include Galaxy Hot Chocolate and Maltesers Hot Chocolate Pods. Pods offer a quick, easy and no fuss format, while bringing differentiation to the hot beverage aisle for consumers and retailers alike”. The pods hot drinks category has an annual sales value of £192m, says Michelle Frost, with 28% of households owning a coffee pod machine.

Benefitting from an overall £12m Galaxy brand marketing spend in 2019, the star performer is Galaxy Instant Hot Chocolate 370g. An established category favourite, winning favour with consumers with its deliciously chocolatey flavour and smooth creamy texture, Galaxy Instant Hot Chocolate continues to be one of the fastest growing brands, growing 14.8%.

Michelle Younger, Marketing Manager at Aimia Foods says Horlicks has seen considerable growth recently, stabilising the decline in the Hot Milky Drinks category. The latest IRI Infoscan data reveals Horlicks is outperforming the total Hot Milky Drinks category, with 12.7% value growth, while the overall category was down -5.2%. 63% of users consume Horlicks all year round, two thirds of them doing so weekly or more often.

Horlicks’ social media channels demonstrate that consumer usage is not just limited to hot and night time. Consumption is often extended outside the traditional September–March, the main consumption period for hot milky drinks. Users share on social media photos of their customised creations on social media, in the form of Horlicks Smoothies, frappes or inclusion of the product in sweet or savoury homebaked dishes.

The popular preconception of Horlicks is that it has strong association with sleep but Michelle Younger says the underlying emotional connection with consumers is that of comfort and relaxation, the most important driver, with 44% of users saying this is their reason for consumption.

Recent Horlicks NPD includes new improved Horlicks Instant Light Chocolate, with less calories, sugar and salt than its predecessor. Finally, capitalising on pod machines’ growing popularity, Horlicks have introduced Horlicks Pods, allowing Horlicks lovers to enjoy delicious malty goodness at the touch of a button and customise how they enjoy their drink. The Horlicks Pods range extends to Horlicks Chocolate Pods, capitalising on demand from Horlicks Instant Light Chocolate users.

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