Strong brew: Despite falling black tea consumption, rising demand for alternatives boosts revenue

Tea is a distinctly British beverage, and according to the UK Tea & Infusions Association, more than 100 million cups of tea are consumed per day in the United Kingdom. Britons are among the world's biggest tea consumers, with the second highest per-capita consumption, choosing from over 1,200 varieties. Most of the tea consumed in the United Kingdom is black tea, made primarily from a blend of East African and South Asian tea leaves. Since very little tea is grown in the United Kingdom, the industry is highly dependent on global supplies, which are affected by the weather, crop diseases, political conditions and other external factors...read more.

Industry Statistics & Market Size
Revenue
£1.1bn
Annual Growth 15-20
6.4%
Forecast Growth 20-25
Profit
Employment
4,173
Businesses
27

Industry Threats & Opportunities

  • Revenue has expanded thanks to the growing popularity of green, flavoured and herbal teas
  • Industry profit has been volatile to movements in input costs, but is expected to have grown overall
  • Rising enterprise numbers are expected to reduce the industry’s market share concentration
  • Industry Report - Industry SWOT Analysis Chapter

    The Tea Processing industry is in the mature stage of its life cycle. Per-capita consumption of black tea has been falling for over a decade, but new and innovative products are being introduced to the market and being received well by consumers. Producers have tried to somewhat offset the fall in traditional black tea sales by focusing on popular, higher-value green and herbal blends, as well as premium black teas. Over the 10 years through 2024-25, industry value added is forecast to increase at a compound annual rate of 7.8%. Over the same period, GDP is forecast to grow at a compound annual rate of 1.5%. Alt...purchase to read more.

    Additional Insights for the Tea Processing Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Tea Processing Industry are

  • Access to high quality inputs
  • Having an integrated operation
  • Development of new products
  • IBISWorld analysts also discuss how external factors such as Demand from coffee, tea and spices wholesaling and Demand from supermarkets in the Tea Processing industry impact industry performance..

    shopping_cartPURCHASE OPTIONS

    What's in this report

    What is the Tea Processing Industry?

    Establishments in this industry process and blend tea. They also manufacture extracts and preparations based on tea, in addition to packing tea in teabags and producing infused teas. Iced tea is not included in the industry.

    Industry Products
  • Blended black tea
  • Single-variety black tea
  • Flavoured and herbal teas
  • Green tea
  • Industry Activities
  • Processing and blending tea
  • Formulating tea extracts and preparations
  • Producing infused teas
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Demand from coffee, tea and spices wholesaling
  • Demand from supermarkets
  • Real household disposable income
  • Exchange rate - US dollar per pound
  • Health consciousness

  • Current Performance
  • Changing tastes
  • Volatile commodities
  • Industry innovation
  • Chart: Revenue Growth

  • Industry Outlook
  • At boiling point
  • Export threats
  • Input prices
  • Table: Tea Processing Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Tea Processing Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Coffee, Tea & Spices Wholesaling
  • Supermarkets
  • Food-Service Contractors

  • Key Selling Industries
  • Cardboard Packaging & Paper Bag Manufacturing
  • Electricity Supply

  • Products & Services
  • Blended black tea
  • Single-variety black tea
  • Flavoured and herbal teas
  • Green tea
  • Chart: Tea Processing Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Grocery wholesalers
  • Retailers
  • Hotels
  • Speciality stores
  • Restaurants
  • Chart: Major Market Segmentation for the Tea Processing Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitIBISWorld estimates that industry profit will account for 11% of revenue in 2019-20. The industry is characterised by fairly high margins, as branded sales account for the majority of industry revenue. The processing and blending of tea is heavily automated throughout the industry, which makes the process highly efficient. The size of the major players and their brand dominance also allows them to realise higher margins. Additionally, industry operators have increasingly been focusing on value-added products in order to improve their profit margins and differentiate themselves. During the five years through 2019-20, industry profitability is expected to have increased due to falling demand for black tea leading to higher sales of green, flavoured and herbal teas, which have higher margins. This is despite rising competition and supermarket pricing pressure. Volatile input prices and the devaluation of the pound in the latter half of the period have increased input prices, though much of this has been passed on to consumers. The weak value of the pound has also increased the competitiveness of industry exports, helping to improve profitability. PurchasesWagesMarketingDepreciationDepreciation costs are expected to have fallen over the five years through 2019-20, to 1.8% of industry revenue. Investment peaked in the base year of the period, as falling demand for black tea products encouraged investment into new product lines and to improve productivity in order to reduce reliance on labour. However, capital investment is expected to be relatively low in the current year due to economic uncertainty causing firms to delay major spending decisions. RentUtilitiesOther
  • Chart: Cost Structure Benchmarking – Sector vs Tea Processing

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Tea Processing Industry

  • Industry Globalization
    Unilever UK Limited, R.Twining and Company Ltd, Tata Global Beverages GB Ltd, Bettys & Taylors of Harrogate Ltd, Typhoo Tea Ltd,
  • Table: Unilever UK Limited - financial performance
  • Table: R.Twining and Company Ltd - financial performance
  • Table: Tata Global Beverages GB Ltd - financial performance
  • Table: Bettys & Taylors of Harrogate Ltd - financial performance
  • Table: Typhoo Tea Ltd - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Tea Processing Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Tea Processing Industry
    Includes:
  • Industry Revenue (2011-2025)
  • Industry Gross Product (2011-2025)
  • Establishments (2011-2025)
  • Businesses (2011-2025)
  • Employment (2011-2025)
  • Exports (2011-2025)
  • Imports (2011-2025)
  • Wages (2011-2025)
  • Wages (2011-2025)
  • Purchases (2011-2025)
  • Profit (2011-2025)
  • Depreciation (2011-2025)
  • Marketing (2011-2025)
  • Rent (2011-2025)
  • Utilities (2011-2025)
  • Other (2011-2025)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Infusion
  • The outcome of steeping plants with the desired chemical compounds or flavours in water or oil.
  • Oxidation
  • The process by which tea leaves wilt if they are not dried soon after being picked.
  • Vertical Integration
  • The degree of vertical integration is the extent to which a firm owns its upstream suppliers and its downstream buyers.
  • What Our Customers Say

    Why buy this report?

    The Tea Processing market research report provides key industry analysis and industry statistics, measures market size, analyzes current and future industry trends and shows market share for the industry’s largest companies. IBISWorld publishes the largest collection of industry reports so you can see an industry’s supply chain, economic drivers and key buyers and markets.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Tea Processing:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Tea Processing market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Tea Processing, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

    Contact Us

    Would you like to speak to an IBISWorld representative?

    clear