Tea and coffee sales stay hot amid Covid-19
Surge in home brewing and interest in wellness drive demand for hot beverages in the UAE
The consumption of tea and coffee in the UAE is growing, with flavour innovation, flexible packaging and ethically-sourced ingredients appealing to consumers.
According to market research firm Euromonitor International, consumers in the UAE currently drink 30,306 tonnes of coffee and 15,542 tonnes of tea in a year.
Although coffee is by far the most popular beverage in the UAE, overall demand for tea has gained traction, driven by increased awareness about the beverage’s health effects.
State of hot beverages market
“In the tea retail category, we expect black tea to grow at 3.1 per cent over the next five years,” says James George, Senior Analyst, Euromonitor International. “Green tea will grow at 2.4 per cent and herbal and traditional medicinal teas will post a growth of 2.8 per cent.”
We expect black tea to grow at 3.1 per cent over the next five years. Green tea will grow at 2.4 per cent and herbal and traditional medicinal teas will post a growth of 2.8 per cent.
Other than China, which is predominantly a green tea producing and consuming nation, the rest of the world consumes mainly black tea. “The global market is characterised by the black tea segment, holding a prominent share of 75-80 per cent, while the rest of the market is shared between green and herbal infusion teas,” says Kamalika Mitra, manager of tea control, Choithrams.
“However, in recent times the demand for the latter has shown robust growth because of the availability of different flavors, introduction of healthy ingredients in tea and the health benefits associated with them. The UAE is predominantly a black tea market, with around 94-95 per cent share, while herbal and infusion tea category has 5-6 per cent market share,” she says.
The UAE is predominantly a black tea market, with around 94-95 per cent share, while herbal and infusion tea category has 5-6 per cent market share.
Both loose-leaf tea and tea bags have benefited from the rising popularity of this beverage among millennials and younger consumers, but loose tea still remains a winner in the category. “Demand is largely driven by the mode of preparation preferred by the large south Asian community in the UAE,” says George.
Kamal Vachani, Group Director, Al Maya Group, which stocks a range of tea and coffee at its chain of supermarkets, says, discerning tea drinkers always opt for loose-leaf tea over tea bags because of better quality and unbroken leaves, which help retain the flavour and aroma of the tea longer.
Reflecting international trends, the tea bags segment is fast gaining a sizeable market share in the UAE for its convenience and easy disposal. Innovations in the shape and packaging of tea bags — round and pyramid bags, for example — now allow consumers to extract the full flavours of tea leaves.
For coffee, there is demand for instant (also called soluble) coffee and coffee beans. Instant coffee is, however, more popular among consumers for its convenience. “Instant coffee mixes are also doing particularly well now, with the ease of lockdown measures and return to work,” George says.
Coronavirus boost
As people are spending more time at home due to the pandemic, many of them are using this opportunity to experiment with their food and drinks, sending the demand for tea and coffee soaring, say retailers.
We have noticed a boost in retail sales of hot beverages, with consumers trying to recreate the café experience at home. Fruit and herbal teas are also responding well as consumers are looking to boost their immune systems amid the pandemic.
“The tea and coffee segment, especially coffee pods, has outperformed other categories in groceries,” Vachani says. “We have noticed a boost in retail sales of hot beverages, with consumers trying to recreate the café experience at home. Fruit and herbal teas are also responding well as consumers are looking to boost their immune systems amid the pandemic.”
Select stores of Al Maya Supermarkets will run a special promotion on 16 tea and coffee ranges from September 23 until October 13 to further drive sales, Vachani adds.
Mitra from Choithrams says tea drinking at home amid lockdown surged by more than 10 per cent. However, there has been a drop in out-of-home demand from restaurants, cafes and tea joints as the pandemic continues.
“The demand for tea has particularly gone up at home because of increased awareness about the immune boosting and antioxidant properties of tea that can help fight the virus. Also in times of a crisis like this, when mostly people are homebound, tea brings in moments of calm into our life, helping us de-stress. You can also connect with family and friends over cups of tea, which can improve your mental well-being,” she says.
With Covid-19, there’s a higher demand for ingredients with health benefits, such as immunity-boosting drinks. Caffeine-free teas that are herbal, are in high demand.
While commenting on how Covid-19 has changed consumption habits in the UAE, Tania Lodi, Founder of Tania’s Teahouse on Jumerirah Beach Road, one of Dubai’s most Instagrammable cafes, says mindful eating and drinking has emerged as a strong trend now. “With Covid-19, there’s a higher demand for ingredients with health benefits, such as immunity-boosting drinks. Caffeine-free teas that are herbal, are in high demand. As there are strong links between high caffeine levels and anxiety, many people are trying to reduce their caffeine consumption,” she explains.
Sensing demand for healthy options, Tania’s Teahouse has recently added a range of functional teas with ‘magic mushrooms’, which has increased resistance to environmental stress.
“We have also added some tea ingredients to our selection that help people deal with anxiety, depression and chronic autoimmune illnesses,” Lodi says.
As the mainstream market grows with functional products with healthy ingredients, ready-to-drink (RTD) and premium, ethically-grown tea and coffee have also found their way in cafés and supermarkets.
“People want a story behind the products they’re paying for, and mindful consumers would like to know whether the products they are consuming are ethically-sourced, from reputable estates, and have high quality ingredients in them,” says Lodi.