State of the Polish tea marketPublished: 18.08.2014
Poland has long been considered a country of tea-drinkers. It ranks #4 in Europe in tea consumption, according to a January ranking of Euromonitor researcher and the World Bank. With consumption of 1 kg per person annually, Poland is surpassed only by Ireland (2.18 kg), the United Kingdom (1.93 kg) and Russia (1.38 kg). Worldwide, Poland ranks #9, ahead of such countries like China, Japan as well as Saudi Arabia, where tea is considered a national drink.
Euromonitor International, which surveys the global tea market, among others, estimated the value of the Polish market in 2013 at PLN 2.185 bln. This year the market is expected to record a slight decline to PLN 2.183 bln, a report published by the researcher near the end of last year showed.
In Eurobarometer's newest report published in March, in turn, analysts point out that the economic crisis did not affect Poland's demand for tea to the degree which had been expected.
„Polish consumers consider tea, especially black tea, an indispensable product that they find hard to resign from. In 2013 producers wanted to compensate losses incurred in 2012 by maximizing sales in peak seasons such as the Easter holiday as well as by introducing new products. The development of new product lines centered around fruit and herbal teas, resulting in new interesting flavour combinations,” the comment to the report reads.
Black tea still constitutes the biggest segment on the tea market. Last year Poland imported 32k tons of tea, including 28k tons of black tea, stats office GUS data show. According to last year's report from Nielsen researcher, black tea's share in overall retail tea sales amounted to 58.9% or PLN 1.295 bln. Herbal tea followed with a 14.2% share, while the third spot was occupied by Earl Grey tea (10.2%). Other smaller segments are: green tea with 8.1% of the market, fruit tea (7.1%) and green tea with a 1.3% share. Other teas account for 0.4% of the total.
Poland's biggest tea producers are multinational companies such as Unilever Polska, owner of the Lipton brand which accounts for 34% of total retail tea sales. Unilever left its competition far behind: the second-biggest producer is Tata Global Beverages, which produces Tetley tea and holds a 9% share in retail sales. The third-biggest producer is Herbapol Lublin, which specializes in fruit and herbal teas. The Lublin-based company controls 6% of the market.
Market analysts point out that while tea is Poles' traditional hot beverage, it is losing popularity to coffee, whose consumption grows rapidly in Poland. Coffee sales surged by 80% over the last ten years, while tea consumption has been recording declines, albeit mild, data from Euromonitor show. GUS tea imports data also point to lack of growth on the market: in 2009 imports reached PLN 344 mln while in 2013: PLN 325 mln.
Prospects for tea market growth are rather moderate: Euromonitor forecasts market growth at the level of 2% by 2018.
„At present, there is little room for market growth, given the high level of saturation [as indicated by – PAP] one of the highest indicators of per capita tea consumption in Poland. What is more, consumer preferences change and demand for tea products with more elaborate flavors is growing. As a result, producers will seek to increase sales through the introduction of new products. It is very probable that they will focus more on exports,” the comments to the report read.
Tea producers focus on exports
GUS data on tea trade best show the momentum of the domestic market. It is worth mentioning however that tea production in Poland has its own specific character: Tea leaves are not produced in Poland and need to be imported from other countries where tea grows naturally. For instance, of the 32k tons of tea imported to Poland in 2013, the biggest amounts were imported from Kenya, Sri Lanka and India, i.e. the world's top tea producers. These countries export non-fermented or partially fermented tea leaves, which are processed and packaged in Polish plants, and later sent to domestic distributors or exported abroad. Processing leaves within the country generates significant added value in tea trade: while the said 32k tons of imported tea was worth almost PLN 325 mln, exports of a little over 19k tons was worth as much as PLN 631 mln.
Tea exports from Poland sport double-digit growth every year: in 2013 the growth amounted to 11.4% y/y. 2011 marked a record-high annual growth of 85.6% (to PLN 419.2 mln from PLN 225.8 mln in 2010). Such dynamic growth was a result of transferring the production plant of British Twinings from North Shields, Northern England to Swarzedz near Poznan.
Source - Polish Press Agency, Economic Service