Marketers of KOLORO branding agency analyzed the tea market in Ukraine. The objectives of the marketing research were: consumer analysis, identification of consumer preferences, analysis of market trends and analysis of thecompetitive environment in the tea market.
Consumer Analysis. Consumer preferences
Tea is one of the most popular beverages in the world, and a great option for quenching thirst. Tea is produced mainly in India, Sri Lanka, China and Japan. There are several criteria for classifying tea: by type of tea leaf, by origin, by processing method, by additional processing method, by additives.
Types of tea by type of tea leaf or by the size of the teas:
- loose leaf (high-grade tea);
- broken (medium leaf, medium grade tea);
- sift or crumble (low-grade tea).
By origin, tea is of the following types:
- Chinese;
- Indian;
- Japanese;
- Ceylon;
- African;
- Turkish;
- others.
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| \If you are interested in our research and would like to get a complete market analysis with up-to-date data, please contact our branding agency – KOLORO. On our website you can also find marketing research of the beer market, milk market, meat and sausage products, and others. In addition, our designers can develop for you the design of packaging and labeling of your product, rebranding, create a logo and brandbook, brand legend, advertising slogan, as well as find partners in another country (suppliers, distributors) and potential customers, make cold calls (call-center services), and much more. |
The average Ukrainian consumes 0.5-0.6 kg of tea per year. And every year the consumption is growing. More than 80% of Ukrainian residents noted that they drink tea more than once a day.
There are also black, green, fruit and herbal teas. In Ukraine, black tea is the most popular, 63% of Ukrainians drink it. The preferences of consumers are relatively stable over time and did not change by more than 4%. The structure of tea consumption, depending on its type, can be seen in the diagram below:
Tea is packaged in packs, sachets or sold by weight. The structure of tea consumption depending on its packaging is presented in the diagram:
Every year the share of tea bags grows by 2-3% and the share of loose leaf tea by 1-2%, and therefore the share of loose leaf tea packaged in packs decreases. Most of all tea bags are bought by people who want to save time, because the time of its brewing is much shorter than that of loose leaf tea. That is why bagged tea is most popular with business (constantly busy) people.
Price categories of the Ukrainian tea market
In the domestic market, tea is provided in different price segments:
- economy (tea price from 4 – 7.5 UAH);
- low price (7.5 – 12 UAH);
- average price (12 – 20 UAH);
- high price (20 – 50 UAH);
- premium (more than 50 UAH);
- collectible.
The largest share is occupied by the mid-price segment (almost 40%), low-price tea is drunk by about 30% of consumers, collection tea and premium tea are drunk by only 1-2% of Ukrainians. In these segments, both loose leaf tea and tea bags are presented.And, as consumers began to pay more attention to the quality of products, and there is an increase in demand for bagged tea, manufacturers began to increase production of bagged tea of medium, high and premium classes.
Analysis of development trends in the Ukrainian tea market
Dynamics of tea sales in Ukraine both in physical and monetary terms, has a tendency of constant growth, which indicates further growth of the market.
The tea market in Ukraine is in the stage of saturation of primary demand. The average annual growth rate of the market (in physical terms) for the last five years amounted to 14%, but in 2011 and 2012 the growth rate was higher – in the range of 15-16%.
The average annual growth rate of the tea market (in value terms) for the last five years amounted to 9.4%. But, due to the active growth of tea consumption, increase in its cost and intensified competition with producers of the adjacent coffee market, the tea market is beginning to grow at a higher growth rate.
The Ukrainian tea market is completely dependent on imports, as tea is not yet grown on a large industrial scale in Ukraine. The price of tea in Ukraine, among other things, depends on changes in the exchange rate. As the dynamics shows, over the last six years, imports of tea in physical terms decreased in 2011 to 25.75 thousand tons and increased in 2012-2013 by 0.32 thousand tons to 26.07 thousand tons. At the same time, theimport in value terms has been increasing constantly (since 2009), on average by 14.4%, only in 2013 the import of tea in monetary terms slightly decreased. In the structure of imports the largest share is occupied by black tea (more than 80%), the second place is occupied by green tea.
Ceylon, Indian and Kenyan tea are the most supplied to Ukraine. The structure of tea supplies is presented in the diagram. Recently, there has been a tendency to increase the share of supplies from Asia and Africa, as this tea is cheaper than Ceylon tea.
Ukrainian tea market players are engaged in processing, packing and packaging of imported raw materials. Some of the producers are engaged in exporting tea to foreign markets, but the share of exported tea is small (about 1% of the total volume of imported products). Dynamics of tea exports in physical terms: in 2009-2011 there was an increase in tea exports – up to the level of 393.02 tons, in 2012 exports decreased to 287.35 tons, but in 2013 increased by 62.44 tons to 349.79 tons.
Tea exports in value terms also fluctuated: from 2009 to 2011 exports grew, in 2012 they slightly fell, in 2013 they increased to 3282.83 thousand dollars. – In 2013, it increased to 3282.83 thousand dollars.
Ukrainian tea is exported to Moldova(about 70%), Russia(20%), Belarus, Lithuania andother countries.
Analysis of the competitive environment in the tea market. Main players in the tea market in Ukraine
Until 2014, the main players in the tea market in Ukraine were the following brands and trademarks:
- “Pyramid” (brand portfolio includes Ahmad Tea, TET, Grace!, kompot);
- “Orimi Trade” (brands: Greenfield, Tess, Princess Nuri, Princess Java, Princess Gita, Princess Kandy);
- Unilever (Lipton, Beseda, Brook Bond brands);
- “May Ukraine” (tea under the trademarks Maysky, Curtis, Lisma);
- “SoloMiya” (Batik tea, Askold, Domashniy teas).
Since during the study period there were only five major players operating in the market, which at that time occupied the major share of the entire tea market, we can conclude that the tea market in Ukraine is characterized by oligopolistic competition.
In Ukraine, Ahmad tea is the most popular (its share in the tea market is 13%), followed by Greenfield brand with a market share of 10%. Lipton brand with a market share of 9% completes the top three. Other popular brands are Besida, Batik, Heilis, Princess Nuri, Maysky, Tess, Princess Java, TET and others.
SUMMARY
Thus, according to the results of the conducted research of the tea market in Ukraine we can draw the following conclusions:
- tea consumption in Ukraine is growing annually;
- Ukrainians drink black tea the most;
- tea bags are the most in demand in Ukraine;
- the share of the medium- and high-priced segment is growing;
- the tea market is totally dependent on imports and hence on exchange rate changes;
- tea market in Ukraine is characterized by oligopoly;
- five major manufacturing companies hold the major market share;
- availability on the Ukrainian market of a huge number of brands and trademarks of tea.
Predictions and Prospects:
- increase in tea consumption;
- increased demand for quality tea bags and decreased demand for loose leaf tea in packs;
- growth in demand for medium and high-priced tea (from 12 to 50 UAH);
- expansion of the product range.
If you are interested in our research and would like to get a complete market analysis with up-to-date data, please contact our branding agency – KOLORO. On our website you can also find marketing research of the beer market, milk market, meat and sausage products market, and others. In addition, our designers can develop for you the design of packaging and labeling of your product, rebranding, create a logo and brandbook, brand legend, advertising slogan, as well as find partners in another country (suppliers, distributors) and potential customers, make cold calls (call-center services), and much more.
The cost of services of the branding agency KOLORO – from $200.To get acquainted with the portfolio and services, which provides our agency, you can on the site:.You can order the service you are interested in, contacting us by phone or e-mail:+38-(057)-760-26-05;+38-(057)-760-26-06; +38-(099)-618-87-50;info@koloro.ua.
