Canadian Market Overview
Louise Roberge,
President Tea Association of Canada
AGENDA
Introduction
Market Place Overview
Trends & Opportunities
Barriers
Tea Association of Canada Programs
Tea Association of Canada
Mission:
To provide proactive leadership on
behalf of all members in the areas of
advocacy, generic promotion, and education
to ensure the long term viability of the industry.
Tea Association of Canada
Members
– Producing Countries
– Importers
– Packers
– Suppliers
– Growers
– Retailers
– Sommeliers
– Students
MARKET PLACE OVERVIEW
Tea Imports
Market Share by Country of Origin
Consumption
Grocery Sales
Foodservice Sales
Tea Imports
Volume Metric Tons (000,000)
25
20
15
Green Tea
Black Tea
10
5
0
2001 2 2003 4 2005 6 2007 8 2009 10 2011
Source: International Tea Committee
Tea Imports 2011
Category Percentage
22%
Black
Green
78%
Source: International Tea Committee
Imports in US Dollars
180000
160000
140000
120000
Black Tea
100000
Green Tea
80000
Total
60000
40000
20000
0
2001
2002
2003
2004
2005
2006
2007
2008
2010
2011
Imports from Major Producing Countries
2005-2011
4500
4000
3500
3000
India
Sri Lanka
Kenya
China
UK
USA
2500
2000
1500
1000
500
0
2005
2007
2009
2011
Producing Country Canadian
Market Share Black Tea
6000
5000
India
4000
Sri Lanka
Kenya
3000
China
UK
USA
2000
1000
0
2003
2004
2005
2006
2007
2008
2010
2011
Producing Country Canadian
Market Share Green
2000
1800
1600
1400
1200
China
Japan
UK
USA
1000
800
600
400
200
0
2003
2004
2005
2006
2007
2008
2009
2010
2011
Canadian Beverage Consumption
Share of Throat
(Litres per Person)
300
250
200
58
47
41
84
82
36
150
82
84
62
86
62
57
90
93
72
77
65
88
87
89
90
89
87
76
73
72
69
67
2005
2007*
2008
2009
2010
2011
87
83
100
50
86
93
1991
1994
94
99
96
93
0
1996
Soft Drinks
1999
2001
2003
Coffee
Tea
Statistics Canada: Food Available Food available adjusted for losses by major group per person
*From 2007 the data represents food available for consumption and not actual quantities of food consumed
since they do not allow for losses or waste
Tea Sales by Category
(Dollars)
250,000,000
200,000,000
150,000,000
Hot
Tea
100,000,000
RTD
50,000,000
0
97 2002 3
4
5
6
7
8
9
10
11
TOTAL READY-TO-DRINK SALES
1997-2011 CANADIAN DOLLARS
120,000,000
100,000,000
80,000,000
Ice Tea
Mixes
RTD (ex
cans)
TRD
(cans)
60,000,000
40,000,000
20,000,000
0
19972002 3
4
5
6
7
8
9
10 11
Specialty / Upscale Tea continues to gain in popularity and
now holds nearly 60% of the $ market Share
$ Share
Tl Regular Black Tea
55.0
$ Vol % Chg
57.2
+7%
45.0
$ Vol % Chg
2010
TL Tea % Chg
Tl Upscale/Specialty Tea
42.8
-2%
-4%
2011
+3%
Source: Nielsen MarketTrack, National GB+DR+MM+GM+WC, Latest 52 Wks ending July 2, 2011.
Nielsen Scantrack, National US All Outlets, 52 Wks ending July 9, 2011
Title of Presentation
In terms of Pounds, Regular Tea dominates but Specialty
Tea has continued to gain share of the category.
Tl Regular Black Tea
Pounds
Share
21.8
Tonn % Chg
23.4
+8%
78.2
Tonn % Chg
CANADA
76.6
-1%
2010
TL Tea % Chg
Tl Upscale/Specialty Tea
-3%
2011
+1%
Source: Nielsen MarketTrack, National TL GR+DR+MM+GM+WC, Latest 52 Wks ending July 2, 2011.
Nielsen Scantrack, National US All Outlets, 52 Wks ending July 9, 2011
Title of Presentation
Specialty Black and Herbal Tea segments are key
growth contributors. Increased health concerned
consumers and many new launches are fuelling the
growth.
$ Share of TL Tea
(Vol% Chg)
2%
27%
3%
11%
YAGO
TL Upscale/
Specialty
57.2 $ Shr
(+7%)
18.6
8.5
8.4
5.6
18.6
-9%
CURR
19.6
21.1
6.8
1.4
SPEC BLACK
CORE
-25%
SPEC BLACK
FLAV
GREEN TEA
HERBAL TEA
1.2
HERBAL RED
1.4
1.0
WHITE
Source: Nielsen MarketTrack, National GR+DR+MM+GM+WC, Latest 52 Wks ending July 2, 2011.
Nielsen Scantrack, National US All Outlets, 52 Wks ending July 9, 2011
Title of Presentation
Tea Sales Yearly Trend (2003 – 2011)
Dollars (000,000’s)
140
120
100
80
60
40
20
0
National
West
Regular Tea Bags
East
Ontario
Quebec
Specialty Tea Bags
Foodservice Sales
Size of the Prize
• Hot Tea servings in Canadian Foodservice
totalled 380-million in the most recent year
• This represents a 4% gain over the previous
year, and a steady 3.5% gain over the last
five years
– This makes it the fastest growing beverage
• Hot Tea ranks as #5 on the most popular
beverage category list
– Just ahead of juice… and behind tap water
Survey says…
Primary Objectives:
The Tea Association of Canada wanted to determine strategies
to grow the tea category at foodservice.
To support this aim, NPD completed a custom online survey to
measure usage and attitudes at foodservice and how to
encourage greater purchase consideration.
Hot Tea Usage
Average consumption of tea per week
Heavy Tea Drinker
• 8+ cups per week
15.4
Medium Tea Drinker
• 3-7 cups per week
Light Tea Drinker
• 1-2 cups per week
6.6
4.8
1.5
Average Tea
Drinker
Heavy Tea
Drinker
Medium Tea
Drinker
Light Tea
Drinker
Executive Summary
 There is a definite opportunity to promote the tea category at all foodservice segments
explored (i.e., Fine Dining Restaurants, Casual Dining Restaurants, Quick Service Coffee and
Donut Restaurants, and Other Quick Service Restaurants).
 At present, purchase intentions among Tea Drinkers are relatively low:
Fine
Dining
Casual
Dining
QSR
Coffee &
Donut
Other
QSR
46%
29%
37%
11%
Definitely /
Probably
Order
 Evaluations of the tea offerings are also relatively low (to extremely low):
Fine
Dining
Casual
Dining
QSR
Coffee &
Donut
Other
QSR
44%
23%
24%
6%
Excellent /
Very Good
… Although Fine Dining Restaurants appear to be doing a better job than other segments.
23
 Yet there is demand: The majority of Tea Drinkers report that they would be more likely to
order tea if they knew the restaurant served consistently good tea.
Fine
Dining
Casual
Dining
QSR
Coffee &
Donut
Other
QSR
77%
71%
69%
70%
 Consumer feedback on purchase barriers and factors to encourage greater purchase
likelihood across the four target foodservice segments revealed consistent findings and the
need to address:
Limited Top of
Mind
Consideration
Poor Quality
and Selection of
Product
Offerings
Poor Execution
24
Conversion of consideration to purchase is low
Consideration and Purchase
by Restaurant Category
77
71
The majority of tea
drinkers would be more
likely to order tea if the
quality was more
consistent
70
69
46
37
Purchase Conversion
29
11
Fine Dining
Casual Dining
Purchase Consideration
QSR
Coffee/Donut
Fine Dining
Casual Dining
QSR Coff/Donut
Other QSR
58%
41%
54%
16%
Other QSR
Purchase Intent
Q.8 To what extent do you consider ordering tea at each of the following types of restaurants?
Base: Total Tea Drinkers (n=2968)
Foodservice demands mirror at home preferences
Demand for Tea Blends at Foodservice
Black (total)
68%
53%
Black
Flavoured Black
• Female
35%
Green (total)
53%
Green
• Medium
39%
Flavoured Green
30%
Herbal
• Age <34
37%
Rooibos
10%
White
Other
• Heavy
• Age <34
• Female
8%
4%
Q.9 What blends of tea are you most likely to order at [restaurant]?
Base: Total Tea Intenders (n=2251)
26
Tea drinkers are particular about their brewing methods
Demand for Brewing Methods at Foodservice
Fresh Brewed
Q.5 Which of the following methods of brewing tea would you like to see offered at the coffee or tea shops or any restaurants that you visit?
Base: Total Tea Drinkers (n=2968)
27
Honey is the preferred sweetener among tea drinkers
Demand for Sweeteners at Foodservice
Q.6 What types of sweeteners would you like to see offered at the coffee or tea shops or any restaurants that you visit?
Base: Total Tea Drinkers (n=2968)
28
Tea is not being considered as a beverage option
Evaluation of Tea Offerings
“Proper temperature of water…”
31
21
“Get rid of those small metal
pots…”
19
16
“Reminder of choices on
menu…”
Fine Dining
Casual Dining
QSR
Coffee/Donut
Other QSR
“Offer more flavours…”
Never Ordered
Q.7 How would you rate the tea offerings at each of the following types of restaurants?
Base: Total Tea Drinkers (n=2968)
Foodservice plays a big role in new flavour trial
Sources of New Tea Blends and Flavours
50%
Retail (total)
38%
Home after buying at grocery store
Home after buying at from other retail
location
11%
Foodservice (total)
39%
Specialty Tea Shop
21%
Fine Dining Restaurants
7%
Fast Food Coffee & Donut Restaurants
6%
Full Service Family Dining-Style Restaurants
6%
Casual Dining Restaurants or Bar & Grills
Not sure
Especially teens (58%) at
retail after grocery
shopping (49%)
Especially those who prefer
loose leaf tea (54%) at
specialty tea shops (38%)
2%
11%
Q.18 Where are you most likely to try a new brand, blend or flavour of tea?
Base: Total Tea Drinker (n=2968)
30
Satisfied tea drinkers will purchase again
Purchase Conversion between
Retail and Foodservice
100%
80%
71%
75%
61%
85%
77%
74%
21%
28%
42%
27%
50%
25%
29%
20%
41%
44%
53%
52%
43%
48%
Foodservice trial and
satisfaction will drive
repeat sales in retail
and foodservice
0%
At home after
buying at a
grocery store
(n=1137)
At home after Fast food coffee
buying from
and donut
some other
restaurant
retail location
(n=179)
(n=337)
Probably
Specialty tea
shop (n=616)
Full service
family diningstyle
restaurants
(n=99)
Fine dining
restaurants
(210)
Definitely
Q.20 How likely would you be to buy a new or different brand, blend or flavour of tea if you had tried it and enjoyed it at [place]?
Base: Tea Buyers at Places
31
Premium offerings command premium pricing
Price Sensitivity of Foodservice Tea Offerings
$2.00
$3.00
Orange Pekoe
$4.00
English Breakfast
$2.02 – $2.50
$2.63 – $3.15
$0.65 Premium Per Serving
Where is the
potential for even
more premium
offerings?
Opportunity at Casual Dining Restaurants: Results at a Glance
Blend Preference – Top 3 Mentions
Blend Preference - Top 5
Black (total) 67%
Green (total) 46%
Among those
who prefer…
Factors to Drive Purchases
Tea Evaluation
Tea Purchase
Consideration
Product
Product
Purchase Barriers
Top 3
Don’t think of buying tea there
45%
Drinking tea more often at home
24%
Quality is not good
20%
31% Ordering Tap Water if not Tea
Other Initiatives
Top 3
Better Selection
of Flavours
24%
Better Selection
of Brands
21%
Better Selection
of Blends
17%
More Premium
Teas
17%
Other
Initiatives
Top 3
Tea Served in
Personal tea pot
to keep warm
33%
Brands, Blends,
Flavours on
Menu
28%
Took tea
seriously (like
coffee)
27%
71% Would be More Likely to Order if Assured
Restaurant Served Consistently Good Tea.
33
Executive Summary (Cont’d)
There is a need to…
Improve
Product
Offerings and
Selection
Boost Top of
Mind
Consideration
•Present complete tea
offerings on menu;
•Educate servers on
offerings;
•Have servers suggest /
make recommendations;
•In-store displays;
•Promotions, seasonal
LTOs, etc.
A Systematic Tea
Program to Ensure:
•There is a strong demand for
a better selection of tea
offerings:
Flavours;
Blends;
Brands;
Premium or specialty teas;
Loose leaf teas.
•Offer higher quality teas.
Trial
Satisfaction
Improve
Execution
•Serve tea in proper tea pot to
keep it warm;
•Take tea as seriously as
coffee;
•Ensure consistency;
•Serve at proper temperature;
•Serve in proper cup.
Repeat
34
Summary
• Tea is not top of mind among restaurant visitors,
creating a tremendous missed opportunity
• Younger tea drinkers have a greater preference for
variety in all of their beverage choices
• Older tea drinkers tend more towards traditional
preparations, and are more particular about them
• Loose leaf tea is becoming synonymous with
specialty tea retailers
• A well executed tea program at foodservice will
generate repeat purchase for operators and
manufacturers at all points of distribution
Size of the Tea Market in Canada
(124% increase in 15 years)
1997
DOLLAR
S $(000’s)
2011
DOLLARS
$(000’s)
%increase
since 1997
IMPORTS
77.1
IMPORTS (ITC 2011)
161
109
SALES HOT
115.2
SALES HOT
212
84
REGULAR
73
REGULAR
88
20
SPECIALTY
42.2
SPECIALTY
124
196
203
138
SALES RTD
70.4
SALES RTD
RTD (excld cans)
10.9
RTD (excld cans)
84
663
RTD Cans
35
RTD Cans
77
120
Ice Tea Mixes
24.5
Ice Tea Mixes
43
72
TOTAL HOT & RTD
185.6
TOTAL HOT & RTD
415
123
SALES
FOODSERVICE (est.)
340
SALES
FOODSERVICE (est.)
760
93
TOTAL
602.7
TOTAL
1,336
124
Protecting: Barriers Regulatory Issues
HIGH Priority
MEDIUM Priority
Healthy Living
CBSA-CFIA
PESTICIDE
MRL’S
Country of Origin
NHP’s
Product Specific
Health Claims Organic regulationMANDATORY
NUTRITION
Generic Health
LABELLING
WHO report
Claim
Codex
Stewardship
Ontario
LOW Priority
Allergen Regulation
Health &Safety
Act
Caffeine
Labelling
On the Radar
Trends & Opportunities
 Flavoured Tea
 Herbal
 Tea as an ingredient in cooking
and cocktails
 Tea as a health and beauty aid
 Fancy Tea bags, single serve
capsule
 Cause related Tea
 Organic Tea & foods in general
 Ready to Drink
Programs and Services
•
•
•
•
•
•
Research
4* tea grading
Tea education
Social marketing
Events
Government regulations
Events
3rd North American Conference
September 11-13, 2012
Hilton Hotel and Suites
Niagara Falls, Ontario
Fifth International Scientific
Symposium
September 19, 2012
Jefferson Auditorium, U.S. Department of Agriculture
Washington, D.C.
Electronic Communications
CERTIFIED
TEA SOMMELIER™
CERTIFICATE
Canada’s First Recognized Tea Education Program
Where is it offered?
• Colleges:
▫
▫
▫
▫
▫
▫
▫
George Brown (Toronto)
Vancouver Community College
Bow Valley College (Calgary)
Algonquin College (Ottawa)
Fanshawe College (London, Ontario)
Nova Scotia Community College
Red Valley College (Winnipeg)
Where is it offered
• Industry
▫ Can be at your company (eg. David’s Tea)
▫ Courses Starting in January
▫ One day Course October 29th
For more information visit our website www.tea.ca
We’re just a click away!