Herbal tea sales take buzz out of coffee

The following article appeared in the Financial Times on July 12 2009 regarding the growth of tea sales:

Tea sales are rising after decades of decline as people abandon pricey cappuccinos and buy more green and herbal teas for their alleged health benefits.

“The decline has stopped,” said William Gorman, chairman of the UK Tea Council, adding that the tea market was expected to grow by 3 per cent this year, with speciality teas likely to boost sales by as much as 25 per cent. “[People] are waking up to the fact that tea is mostly water and antioxidants.”

“There’s no reason to think demand won’t keep on growing,” said Katy Tubb, director of tea buying and blending at Tetley. “The question is whether supply will keep up with that ... We’re not seeing a lot more land planted out for tea.”

Peter Unsworth, chief executive of Tetley, said rising global tea consumption, particularly in Asia, was pushing up global demand. “This is having an impact on the short-term supply-demand balance and is driving up tea prices.”

Mr Unsworth said he was not worried if price increases became permanent since tea was still cheap relative to other drinks.

Jonathan Jones, garden director at Tregothnan Estate, which has launched a range of what it says are the first teas grown in England, said people once again saw good quality tea as an “affordable luxury”. When the Cornwall estate launched its English Estate Teas at the Chelsea Flower Show in May, “our entire week’s stock sold out in the first day”, Mr Jones said.

Rising demand for green and herbal teas is encouraging producers of black tea – the industry term for the commonplace brew – to diversify. Unilever, which buys 12 per cent of the world’s black tea, last year expanded the green tea range in PG tips and launched a range of fruit and herbal teas under the Lipton brand.

Dr Stuart’s, an independent group with £2m in annual sales, said Tesco stocked four lines of its herbal teas in about 700 stores and was considering distributing them in its Tesco Express stores.

Tesco, which confirmed it was expanding distribution of Dr Stuart’s, said overall tea sales were rising by 3 per cent year-on-year, with green tea the fastest-growing.

Darren Williams, tea buyer at Fortnum & Mason, said while the retailer’s green and white teas accounted for less than 5 per cent of total tea sales, it was selling twice as much of these teas today as a year ago. Overall, tea sales are up 20 per cent on last year.

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