Suppliers have been digging deep into their pockets over the past year in an attempt to keep their brews on the boil and capture the youth vote from soft drinks. Lisa Riley finds out their ways and means
Competition within the hot beverages market is sharpening up as consumers increasingly turn their backs on the industry in favour of the plethora of soft drinks available.
Value sales of total hot beverages dropped 3.2%, or £42.7m, in a market worth £1.3bn, continuing the category's long-term decline (TNS 52 weeks to July 2002).
Flagging sales of instant coffee, which accounts for 43.4% of the hot beverages market value, is the biggest cause of the decline with a value decrease of 5.5% on the previous year.
In comparison, the roast and ground coffee category is faring better, showing a steady year-on-year volume growth of 2-3% (ACNielsen, 52 weeks to July 13) on the back of consumers broadening their repertoire and looking for a coffee taste more in line with their coffee shop experience.
This, according to brand manager for Douwe Egberts Fiona Johnson, is the silver lining in the cloud. "Over the past two years, manufacturer brand owners have become more active in the category, spurred on by the growth in high street coffee shops," she says.
"Product ranges have been launched to capitalise on the out of home trend. Also, as consumers' palates become educated to roast and ground coffee, their experience and understanding of the category grows. This trend will continue and gradually accelerate."
However, tea remains the nation's favourite drink with 66% of UK consumers enjoying at least one cup every day.
Some 144 million cups of tea are drunk daily  more than twice the 75 million cups of coffee supped on a daily basis, according to the National Drinks Survey.
Coffee also lags behind the 82 million soft drinks which are consumed each day.
The tea market claims a 37.9% share of the total hot beverages market(TNS, 52 weeks to July 21), a rise of 0.5% on the previous year. However, volume sales have declined as a result of a fall in sales of instant and loose tea It is no secret that tea sales have steadily declined in recent years, with the average age of tea drinkers increasing. Coffee, however, has undergone a complete makeover with the invention of coffee bars and even has its own language with the array of new Italian and American inspired offerings.
Tea has also suffered a decline in consumption as consumers' lifestyles have changed: there is more out of home purchasing behaviour which doesn't favour tea.
But it's not all doom and gloom, with the speciality tea sector proving to be this year's rising star and green tea the fastest growing in the total tea market.
Despite the total market decline, hot beverages account for two thirds of all drinks consumed in the UK and still make up 70% of the drinks consumed in the home (National Drinks Survey, 52 weeks to September).
The main challenges for the hot beverages market are bringing young and lapsed consumers to the market. Unilever Bestfoods' category manager for hot beverages, Adrian Adams, says: "It is vital we address the concerns and needs of younger consumers."
Market leader Nescafé¬ together with leading brands such as PG Tips, Tetley and Typhoo, has splashed out like never before to increase sales. Short-term figures have been mostly positive, but long-term it is still too early to tell.
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Competition within the hot beverages market is sharpening up as consumers increasingly turn their backs on the industry in favour of the plethora of soft drinks available.
Value sales of total hot beverages dropped 3.2%, or £42.7m, in a market worth £1.3bn, continuing the category's long-term decline (TNS 52 weeks to July 2002).
Flagging sales of instant coffee, which accounts for 43.4% of the hot beverages market value, is the biggest cause of the decline with a value decrease of 5.5% on the previous year.
In comparison, the roast and ground coffee category is faring better, showing a steady year-on-year volume growth of 2-3% (ACNielsen, 52 weeks to July 13) on the back of consumers broadening their repertoire and looking for a coffee taste more in line with their coffee shop experience.
This, according to brand manager for Douwe Egberts Fiona Johnson, is the silver lining in the cloud. "Over the past two years, manufacturer brand owners have become more active in the category, spurred on by the growth in high street coffee shops," she says.
"Product ranges have been launched to capitalise on the out of home trend. Also, as consumers' palates become educated to roast and ground coffee, their experience and understanding of the category grows. This trend will continue and gradually accelerate."
However, tea remains the nation's favourite drink with 66% of UK consumers enjoying at least one cup every day.
Some 144 million cups of tea are drunk daily  more than twice the 75 million cups of coffee supped on a daily basis, according to the National Drinks Survey.
Coffee also lags behind the 82 million soft drinks which are consumed each day.
The tea market claims a 37.9% share of the total hot beverages market(TNS, 52 weeks to July 21), a rise of 0.5% on the previous year. However, volume sales have declined as a result of a fall in sales of instant and loose tea It is no secret that tea sales have steadily declined in recent years, with the average age of tea drinkers increasing. Coffee, however, has undergone a complete makeover with the invention of coffee bars and even has its own language with the array of new Italian and American inspired offerings.
Tea has also suffered a decline in consumption as consumers' lifestyles have changed: there is more out of home purchasing behaviour which doesn't favour tea.
But it's not all doom and gloom, with the speciality tea sector proving to be this year's rising star and green tea the fastest growing in the total tea market.
Despite the total market decline, hot beverages account for two thirds of all drinks consumed in the UK and still make up 70% of the drinks consumed in the home (National Drinks Survey, 52 weeks to September).
The main challenges for the hot beverages market are bringing young and lapsed consumers to the market. Unilever Bestfoods' category manager for hot beverages, Adrian Adams, says: "It is vital we address the concerns and needs of younger consumers."
Market leader Nescafé¬ together with leading brands such as PG Tips, Tetley and Typhoo, has splashed out like never before to increase sales. Short-term figures have been mostly positive, but long-term it is still too early to tell.
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