The UK Tea Market

New RIU Report Sheds Light on Latest Tea Trends in the UK

The British and tea are so closely identified that the brew has become one of their character traits. It is of course surprising to discover that the origin of tea is not essentially native to England and yet, it has become entrenched in the British way of life.

It’s been over 200 years since the popularity of tea as a beverage emerged throughout the country, resulting in the English entering the tea trade during the 18th century. Today the UK has the 3rd largest annual per capita tea consumption (source: statista.com) and it is the 8th largest tea consuming country in the world (source: Euromonitor.com).

A study conducted in 2018 by the Research Intelligence Unit (RIU) on the tea market in the UK, unveils consumption trends, retail, exports and imports concerning the tea market in the UK.

In 2015, the annual income of the entire UK tea Industry was estimated to be GB £ 748 million. Starting out as a fashionable drink among a handful of enthusiasts, now the country consumes over 160 million cups a day.

A continuous increment of tea commodity prices in the UK was noticeable in the last two years. The major cause for the volatility was the impact of Brexit in addition to the rise of global tea prices.
The UK being the largest European tea market, imported 128,082 tons of tea worth over US $ 362 million in 2016 inclusive of 70,877 million tons bought from Kenya. The study reveals that China, India, Kenya, and Sri Lanka are the main tea exporters to the world. Compared to these countries, Sri Lanka experienced a relative increase in the growth of imports to the UK.
The UK being a major re-exporter of tea, distributes 17 per cent of its imports to Europe having their largest markets in Ireland (25.2 per cent) and Canada (18.10 per cent).

British consumers favour diverse varieties of tea; Black, Green, Herbal or Oolong and use different flavourings of herbs, milk, or sugar with the temperature and strength of the tea varying widely. To examine several general behaviours and preferences of tea consumers and get a pulse of the market in the UK, the RIU conducted a consumer survey in 2018.
In accordance with the survey, nearly 80 per  cent of the respondents consume tea daily whereas 55 per cent consume three or more cups a day which promises a solid consumer base.
The taste of tea, health benefits and relaxation are the main reasons for the respondents to drink tea. With the expansion of the tea market, a niche of consumers desire flavours in their brew, whilst the majority prefer it unflavoured. Black tea seemed to be the most preferred, in addition to green tea and herbal tea.
It appears that tea is consumed mostly during the mornings and afternoons. Teabags are preferred than loose tea due to convenience and the ability for it to be reused. Most purchasers are willing to pay GB £ 2 to 2.99 for a package of 20 teabags. China, India and Sri Lanka are the only developing countries that supply consumer-packaged tea to the UK in relevant volumes.

Based on the survey, Sri Lankan tea is mostly desired by Brits for its ethical production, quality and unique taste. 87 per cent of tea is distributed through retail operators while online purchases are  significantly low.

In the UK tea is mostly enjoyed at home and in office while the teahouse market is low with a 14 per cent share of all tea consumption. The respondents mostly visit a teahouse to meet up and have a casual chat with friends, much similar to a coffee-house.
India, Kenya and Sri Lanka are the main players in the tea trade. According to the study, the cost of importing tea to the UK is marginally cheaper for India than Sri Lanka. Kenya is the most expensive to import. Shipping duration may extend to over a month for goods to reach the UK. Sri Lanka takes 36 days to deliver goods while India takes 42.
The Research Intelligence Unit is a pioneering research firm that offers research based consulting focusing on several key economic sectors. Their research and advisory services include market and financial feasibility, environmental and social impact studies, as well as traditional market research and investment appraisal for their clients. The RIU maintains a strong focus building resources and extending networks to cover the private and non-governmental sectors in both developed and developing economies. Forward thinking and innovative, the RIU uses a mix of local and international resources to bring innovative perspectives to provide solutions for economic problems and keep decision makers informed.

Preferred tea flavors
Frequency of drinking tea per day
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