Sales in the out-of-home tea category are underperforming against the wider coffee shop market, according to the latest report from Allegra World Coffee Portal.
The UK coffee shop sector increased by 12% in turnover to reach £8.9bn in 2016, with tea contributing just £308m to the total sales.
Sales of tea in coffee shops continue to rise, but the growth is predominantly driven by an increase in price and by the growth of the coffee shop sector as a whole, rather than increased consumer participation.
The tea category currently accounts for 3.8% of the total coffee shop market turnover, declining in sales share from 4.1% in 2015, Allegra’s Tea Out-Of-Home 2017 report finds.
More than 15 million cups of tea are consumed every day in the UK, though the vast majority is at home or at work.
Some 22% of consumers surveyed claimed the tea available out-of-home was poor value for money – an increase of 6% since 2014, as better tea offers have not kept pace with rising prices.
Allegra said opportunity for growth in the tea out-of-home market lies in the speciality and iced tea categories, offering innovation and healthier beverage choices to the increasingly health and wellness conscious consumers.
In the long term, the report predicted tea innovation would be driven by leading operators prepared to re-define the consumer experiences of tea out-of-home.
Allegra anticipates the category to continue similar growth in 2017 and reach £341 turnover by year-end.
The report, which is being presented at London Coffee Week this week, was based on 1,500 online surveys with UK consumers regarding tea consumption.