Steep competition: Driving growth in the tea category
By: Joel Gregoire, Senior Research Analyst Food & Drink at Mintel
Aside from water, there is no beverage that is more tied to human history than tea. It’s rooted in tradition with its popularity spanning across cultures. In Canada and the US, however, coffee is the predominant hot drink for consumers. The question is why, and what can tea do to leverage the success of coffee?
As is commonly understood, tea is strongly associated with health. When asked, nearly half of Canadian consumers agree that tea is healthier than coffee. By contrast, only one-in-25 agree that coffee is healthier than tea. Though findings point to health as being a key purchase driver across multiple categories, the benefit of tea’s superior health positioning appears to have limits.
With tea ‘owning’ health compared to coffee, opportunity exists to explore other areas of development and messaging in order to support category growth. It’s thus important for tea producers to identify easy opportunity areas when narrowing their focus. For instance, based on Mintel research, chilled ready-to-drink coffee holds stronger associations with being “innovative”, and while the tea category certainly boasts a broad innovation portfolio, by comparison it’s not an association consumers commonly make with tea. As such, rather than messaging against an association that chilled coffee “owns”, tea producers may find more success in investing in positioning around associations that neither category owns.
Ultimately, for tea to drive significant growth it will have to win share from other beverages with coffee being the obvious main competitor. That said, it’s not enough to just imitate coffee in an attempt to replicate the category’s success in recent years, rather tea must identify and exploit underdeveloped value propositions to innovate and message against.
Join me at the North American Tea Conference, September 20-22 to learn more about tea’s growth in the industry, and what it could mean for your company.
Joel Gregoire researches and writes reports on the Canadian food and drink industry for Mintel. He comes to us after stops at NPD, Loblaw’s and OMD, where he amassed a breadth experience in the industry. Joel has a Bachelor’s Honours Co-op in Political Science and History from the University of Waterloo.