Brand loyalty amongst hot beverage sectors
Brand loyalty amongst hot beverage sectors  
   
  Shoppers who plan to buy a specific brand
Grocery average 39%
Instand coffee 67%
Roast and ground coffee 52%
Everyday tea 52%
Speciality tea 31%
   
Source: Shopper Intelligence survey of 77,000 shoppers  
Nielsen: top 10 tea brands
Top 10 tea brands  
     
  Value (m) % change
Twinings 107.9 3.8
P G Tips 98.7 -7.2
Yorkshire 97.6 5.0
Tetley 89.8 0.4
Pukka 22.6 15.4
Clipper 13.2 -4.4
Teapigs 6.9 2.9
Typhoo 6.7 -34.8
Tick Tock 4.5 9.1
Scottish Blend 3.8 -7.2
     
Source: Nielsen, 52 w/e 13 July 2019    

It’s all change at the top. Twinings has overtaken long-running market leader PG Tips to become the bestselling tea brand.
Twinings secured an extra £3.9m by broadening its offering. Its Cold In’fuse and Superblends lines were key drivers of growth, say Nielsen senior client analytics executives Robin Tahiri and Tom Newman.


Meanwhile, PG Tips suffered a £7.7m slump. Innovations such as its Perfect with Dairy-Free blend and PG 2 Go weren’t enough to offset the decline in its core offering, says Nielsen.


The turnaround at the top illustrates key trends in the market. Twinings was the first tea brand to move into the cold infusions category, and it seems to be paying dividends. Nielsen says these offerings – which also include Tetley Cold Infusions, Lipton Real Iced Tea and, most recently, Teapigs Cold Brew – are starting to “excite shoppers again”.


Meanwhile, black tea is suffering from a long-running decline. That was illustrated by the performance of Typhoo, which suffered a gruelling 36.4% fall in volumes. However, the brand points to the rise of premium and extra strong brews, which bodes well for its Extra Strong blend.


On the other hand, Yorkshire bucked the black tea decline with a whopping £4.7m gain. This was down to “staying true to the value proposition and continuous investment in media”, says Nielsen.

Kantar: hot beverages value sales
Hot beverages value sales  
  Value (m) % change
Coffee   1322.9 0.9
Tea   664.3 -0.8
Hot chocolate   182.2 -4.1
     
Branded vs own label  
Branded 1763.9 -0.4
Own label 405.6 1.4
     
Coffee formats  
Instant 917.1 -0.8%
Roast and ground  210.8 5.9%
Pods   195.0 4.1%
     
Source: Kantar, 52 w/e 19 May 2019    

The hot beverages market has slowed this year, down 0.1% to £2,169.4m. This is mostly down to shoppers buying less frequently. “It indicates shoppers are feeling less engaged with the category,” says Kantar analyst Wandi Zhang.


However, that’s not true of all hot beverages. Coffee is up £11.7m. That’s despite a decrease in price, led by instant coffee.
In tea, the opposite is true. Brands drove a 1.5% rise in average prices, but volumes declined by 2.3%.


Zhang says fruit and herbal teas are increasing prices and recruiting more shoppers. “In contrast, other tea sectors are losing shoppers and volume as tea has become less of a routine for consumers,” she adds.


Own label has grown 1.4% in value across total hot beverages. But again, it’s a case of mixed fortunes. Own-label coffee is up 4.3% but tea and hot chocolate lines are declining.


Roast and ground has contributed the most to the rise of own-label coffee. Sainsbury’s, Asda and Morrisons all registered growth in their own roast and ground lines.

Nielsen: top 10 coffee brands
Top 10 coffee brands  
     
  Value (m) % change
Nescafe 384.0 -4.5
Kenco 138.1 3.7
Tassimo 88.2 -4.1
Dolce Gusto 56.6 -10.6
L'Or 52.0 22.6
Lavazza 50.1 12.2
Taylors Of Harrogate 49.3 11.3
Douwe Egberts 44.0 -10.7
Starbucks 10.0 41.2
Cafedirect 9.9 14.2
     
Source: Nielsen, 52 w/e 13 July 2019    

It’s a mixed picture for coffee brands. While some have benefited from the rise in pod and ground formats, others are suffering from the downturn in standard instant blends.


Nescafé is one of the latter. Its standard range has taken the brunt of the decline as premium instant products are becoming “more accessible through aggressive promotions”, say Nielsen senior client analytics executives Robin Tahiri and Tom Newman. That has resulted in a whopping £18m blow to sales.


“However, Nescafé has recovered some losses through its popular Azera range, which has seen success through its funky packaging and wide appeal,” say Tahiri and Newman. Plus, the brand showed some on-trend innovation with the launch of its Azera coffee bags in July.


Second brand Kenco has fared better with a £4.9m gain. That was driven by growth in its core lines, Kenco Smooth and Kenco Rich, as well as the rise of its Azera rival Kenco Millicano.


The biggest winner on this list is L’Or, whose £9.8m gain has made it the fifth biggest coffee brand. Its pod range was a key driver behind this success. “L’Or was one of the first to take advantage of Nespresso’s capsule patent loss and this has paid dividends,” say Tahiri and Newman.

Other pod brands aren’t faring as well. Tassimo slumped £3.7m and Dolce Gusto lost £6.7m. However, the latter was driven by a decrease in price.