Liquid Thinking

Tea consumption is ingrained in the drinking cultures of many nations, especially the UK. But dwindling sales of this old reliable is causing a rethink across the industry, as younger consumers move away from black tea products. Could tea be repositioned to meet new needs? Or even, should it?

While the past two years have been undeniably transformational in terms of reshaping the social rituals that govern our lives, even before the pandemic hit, the writing was on the wall for black tea. Consumed without consideration, but rather an ingrained ritualism and habit for generations, the consumption of a cup of tea has been steadily going off the boil for years.

According to Euromonitor, in the five years to 2019, volume sales of black tea fell by 10% in the US, Russia, and UK retail channels.

Announcing plans to sell its tea brand portfolio (including PG Tips, and Brooke Bond) in 2020, Unilever chief executive, Alan Jope, proclaimed that traditional tea drinkers are an aging market. While younger consumers preferred coffee and herbal teas, or trending varietals such as matcha, black tea drinkers, he claimed, were “getting older and consuming less and starting to fall over”. The brands eventually sold to European private equity firm CVC Capital Partners in November 2021.

Evading current trends

There are several reasons for black tea’s decline. Consumption has been hitherto punctuated by moments that are simply disappearing. As wellness trends take hold among younger generations, sales of sweet treats such as cake or biscuits has fallen, both products linked to tea consumption. A move away from dairy milk, may also be having an impact.

Central to at-home hospitality, consumption out of the home has also been a traditionally weak area for tea. With the rise of coffee shops and speciality coffee – notably serves or brewing processes that generally can’t be replicated in the home – coffee sales have soared where tea has dipped. While the lockdowns of 2020 and 2021 may have shifted that balance slightly, it’s not enough to reverse deep-rooted declines.

And finally, the trend for premiumisation that has hit almost every food and drinks category, is also hitting tea. Consumers are namely drinking less, but better. For tea, this has meant a shift away from black teas priced for everyday consumption, and a move to herbal, single-origin, trending teas such as matcha, or those with health or functional claims.

Has black tea had an image problem, or has it simply evaded the whirlwind of concurrent trends that are sweeping through premium teas and coffees? And is there a way to reverse its fall from favour and grab the attention of consumer groups that are failing to repeat the consumption habits of previous generations?

Reviving misfortunes

There seems to be several schools of thought when it comes to turning around tea’s fortunes. A number of future-facing brands are emerging that are taking the charm and familiarity Brits have with a good old cuppa’ and giving it a facelift.

Manchester-based The Brew Tea Co, with its bright yellow, and simple packaging looks more at home on the kitchen counter of image conscious consumers. Tapping into the need for premiumisation, its products are focused on high-quality simplicity, using only whole rolled leaves. And showcasing growers and farms that are listed on pack, and making a focal point of leaves “picked by a real person” and blended at its HQ, it chooses to showcase an ethical, human angle, something increasingly important to consumers. In essence, it’s the tea you know and love, just better for you, as well as for social enterprise.

Newby Tea’s collaboration with fashion designer Matthew Williamson, is also a notable turning point. Such collaborations are more common across spirits, where trending brands benefit from sharing the appeal of their joint customer base. For the heritage tea brand, working with the fashion designer on its packaging has helped add an element of glamour, and collectability, as well as making an updated statement about the value of a brand in the cultural zeitgeist.

A future in functionality

In a drinks market becoming ever more dominated by functional claims – whether consumers know and recognise them as such yet, or not – tea’s health properties could be another way in.  It’s no accident that there’s been a flurry of news stories in recent weeks pointing to the ability of black tea to help consumers lose weight, and crucially, help reduce visceral fat when consumed regularly, by reducing hypertension and relaxing arteries. Though some of these articles point to a 2021 study out of California, they also reference a much older study, from 2012 published by JAMA Internal Medicine. Could touting the health benefits of regular, sustained consumption help black tea speak the language of current consumers? It seems the tea industry hopes so.

Tea has terroir?

However, some would argue that tapping into ‘coolness’ and ‘lifestyle’ trends, and making tea ‘faddy’, might be a mistake. Instead, the tea industry should set about educating consumers on the nuances of terroir and plant varieties that black tea already has, but in the past hasn’t focused on, to build an appreciation of quality, in the same way as wine. For example, how many consumers could tell you what a black tea actually is, or how it is produced? How many know that green tea, and black tea are the same leaves, just produced differently? In a World where consumers are interested in, and are actively educating themselves on what products are, where they come from, and how they are produced, tea is an anomaly.

Could this method help to get consumers more excited about the production of tea, the nuances in its flavour, and appreciate it more as a higher-quality or artisanal product? Maybe.

The simple answer

However, the answer as is often the case, could be the simplest one. Tea doesn’t need to change to reach new consumers, and to increase its consumption rate among lapsed consumers. It simply needs to fit into their changing lifestyles better, to again become the obvious choice in a daily repertoire. Whether that’s through new slicker packaging, new serves that don’t involve dairy and perhaps involving a new ritual that adds a different mouthfeel or premium out-of-home experience, so that black tea can feel like a treat.

Key to the fortunes of coffee has been its place in the rise in out-of-home drinking. Yet consuming tea out-of-home currently remains un-aspirational. Consumers require theatre, or a sense of ritual, surrounding the experience. The use of tea bags it could be argued has taken much of the theatre away from brewing tea. Is it time for a return to older methods? Or does the secret lie in playing the other brewing techniques, or even, adding texture to milk, to enhance the experience? Iced tea is a fixture in the US, but has never achieved wide uptake in the UK. Could a cold brew revolution, add a new twist, and therefore resonance?

Premium lines that speak to a higher quality brew, or a more considered approach to educating consumers about how leading brands are currently produced, could also help tell a story that consumers engage with, and help raise it from forgotten staple, to a celebrated fixture.

Interested in finding out more about what this might mean for you and your business?

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