Page 55 - Retail World Tob - May 2020

A ccording to major players in the tea market, tea growth, with many variations considered, is stable overall with a noticeable trend towards herbal, fruit and organic ranges. Health, quality credentials and sustainable practice are increasing as focus areas for consumers, in conjunction with a search for novelty and new ways to use tea. Coffee’s performance, on the other hand, just never ceases to amaze, with innovation, partnership and premiumisation the order of the day. According to Dilmah senior executive John Trovato, the tea category is growing at about 3.5 per cent year on year. This shows a “healthy” category that is, however, “looking for innovation” across all segments,” he tells Retail World. “Herbal continues to be one of the leading segments within the market, which is being driven by the younger generation entering into herbals first before entering into the black or green category,” he said. “Green isn’t performing to the same standard it did in the past, because of the range of herbal offers now available to consumers, so there’s obviously work to be done in the green segment to return it to positive growth.” He says black tea is growing in line with the category, “but herbals are exceeding that through innovation”. “Black tea hasn’t shown that much innovation, but this isn’t due to a lack of trying,” he said. “I think it’s all about what a price-aggressive market will accept.” Mr Trovato adds that this doesn’t negate Dilmah’s responsibility to deliver a unique proposition to consumers to “trade” black tea to a premium offering. “And that’s what we’ve been doing,” he said. “We’ve been working on that and bringing new products to the market that offer premium offerings to consumers to engage the category and bring it to life.” Tea’s health benefits and personal ties Bringing the category to life also centres round tea’s health benefits, Mr Trovato says. “Consumers who consume tea know about its health benefits, but there’s still leeway to educate them and others more as to its low-caffeine content and lack of sugar, which is a driver of the market, including overseas,” he said. As to its role relative to coffee, Mr Trovato says Dilmah research finds coffee is a beverage that meets an occasion or environment, while tea is a more personal beverage. “Tea has a personal association, whereas coffee has a more of a sharing association,” he said. “Consumers would do well to reflect upon tea as being about the individual taking time to reflect away from the day’s rush as a cup of tea brews reassuringly. Coffee, on the other hand, is more of an instant, company orientated beverage.” Dilmah steers clear of deep discounting Mr Trovato says price discounting to promote products is prevalent in supermarkets, but “as our tea is a premium and price-sensitive offering, we don’t want to be in that market”. “Aspects that make Dilmah tea premium are its wellness benefits, taste, quality credentials, single origin, ethical status and provenance,” he said. “So, even though customers do look at price as part of their hierarchy, the total package that makes Dilmah tea comes to the forefront and can override price preoccupations and a commoditisation and discount culture, which will take place increasingly in the future.” These aspects of Dilmah tea, he says, were already evident when Dilmah founder and Chair Merrill J Fernando brought the range to Australia in the 1980s, intent on selling single origin tea of “undeniable freshness and quality” to Australians, while alleviating poverty for workers in Sri Lankan tea fields. From then until now, Mr Trovato adds, the tea remains 100 per cent single origin, grown in Sri Lanka and produced in the traditional artisanal way to ensure freshness before consumption. Mr Fernando’s decades of conservation work in Sri Lanka as well as his MJF Charitable Foundation, which is funded by Dilmah profits to help serve 10,000 people each week, was recently acknowledged through an honorary doctorate at Massey University in New Zealand. Mr Trovato says a turning point hinges on the fact that Dilmah’s tea is handpicked and ready for consumption within 24 hours, ensuring freshness. “Also, tea can be drunk as a traditional hot or cold beverage, as a pairing with a main meal or as an ingredient in cocktails or mocktails,” he said. “There are really so many ways to consume tea as consumers learn more about the health and wellness \\\\\\\[benefits\\\\\\\] of tea. “In view of this, a lot more has to be done to educate consumers, including millennials, who are health and eco conscious, on tea’s excellent benefits and multiple uses, not to mention its sustainability focus.” The company’s sustainability measures include a movement toward bio-based materials since 2000 – with 98 per cent TO PAGE 54 HOT BEVERAGES “Herbal continues to be one of the leading segments within the market, which is being driven by the younger generation.” MAY, 2020 RETAIL WORLD 53