TEA MARKET RESEARCH IN UKRAINE

Tea is a familiar component of cold evenings and friendly gatherings. Every year more than 20 tons of tea are sold in Ukraine, and each Ukrainian drinks about 0.5-0.6 kg of tea. In 2017, tea was included in the consumer basket of Ukrainians for the first time, however, in a smaller volume – 0.4 kg (for children under 6 years – 0.073 kg, from 6 to 18 – 0.1 kg).

Tea market analysis: types of products

Tea is a beverage that requires the pre-treated leaves of the tea bush. The leaves themselves are also called tea after they have been prepared. They are harvested by hand, dried, twisted, oxidized and dried again, and only then can they be used for brewing. The main tea plantations are located in the tropics and subtropics – China, India, Africa, Sri Lanka.

Tea is divided according to the method of oxidation:

• green;
• black;
• white;
• yellow;
• oolong;
• pu’erh.

Drinks that do not contain tea bush leaves but are brewed using leaves from other plants are called tea beverages. This group includes chamomile and other herbal infusions, carcade, yerba mate, rooibos, and others.

Analysis of the tea market in Ukraine: cost, types of packaging and quality level

Packaging:

1. Бумажная/картонная. Внутри коробочки чай дополнительно пакуется в фольгу, бумагу, что сохраняет его качества, или в полиэтилен, что негативно влияет на вкусовые характеристики напитка. Впрочем, это легкий способ уменьшить стоимость упаковки.
2. Iron cans are created from nickel-plated tinplate, which does not oxidize and withstands stress well. Tea in such packaging can be stored for a long time and does not lose its flavors
3. Wood is one of the oldest materials for tea packaging. Boxes are made of both exotic and common woods. Long-term storage of tea in wooden packaging is possible only in a dry place.
4. Jars made of clay and ceramic store tea perfectly, but are not convenient for transportation due to the natural fragility of the material.
5. Polyethylene bags are the cheapest way of packaging tea, which usually accompanies the products of budget segment brands.

Quality

There is an opinion that bagged tea has a lower quality level than leaf tea. Producers themselves, for example, Vyacheslav Yandryhinsky, head of the logistics department of Uniliver Ukraine, claims that loose leaf tea is simply crushed to the consistency of bagged tea so that the individual leaves do not damage the packaging.

Really low-quality tea consists of so-called fannings, i.e. the finest fraction. The lack of taste in such a substance is compensated by flavorings and additives.

Price Categories:

1. Эконом-класс. Стоимость чая, входящего в эту категорию, находится в пределах 10-20 грн за 100 грамм. Сюда включены низкокачественные чаи, а также демпинг от новых чайных компаний + рассыпные чаи. К категории относятся чаи «Майский», «Лисма», «Принцесса Нури» и другие.
2. Low cost. The category in which the largest number of brands appear (about 20 annually). The most favorable offer for the buyer. The price of tea varies from 20-30 UAH/100 g. Example – “Besida”.
3. Average Value. A competitive price category with confident leaders. Buyers see this group as the best option because of the price-quality ratio. For such tea they pay from 30 to 40 UAH/100 g. This group includes Ahmad Tea products.
4. High value. Exclusive offers from trusted brands, which are sold through specialized stores. The price is 40-70 UAH. These are Greenfield, Hyleys and others.
5. Премиум-класс. Чай этой категории продается в эксклюзивных и жестяных упаковках, подчеркивая свой уровень. В этой группе спрос потребителей наиболее стабилен. За чай премиум-сегмента необходимо заплатить от 70 грн и более.

Tea market in Ukraine: consumer choice

72% of Ukrainians buy tea at least once a month. Fans of black tea – 63%, another third drink green tea. The rest prefer herbal blends. The preferences of buyers are stable and practically do not change over the years.

Buyers choose tea depending on several factors – price, quality and personal preferences. Naturally, the price issue is still very acute at the end of 2016, so many people sacrifice their interests. In the first half of 2016, tea sales fell to 4,0096 ct compared to 4,7537.7 ct in the first half of 2015.

Due to the increase in food prices and instability of salaries, Ukrainian consumers prefer middle segment teas. Therefore, not only black and green tea brands with the lowest product price, but also herbal teas are popular. Their production cost is low, and legends about their health benefits strengthen their image. For coffee drinkers, there is also a separate analysis on our website.

Seasonality also affects the purchase of tea and coffee. In spring and summer, sales of blends drop, while in the cold season they increase.

Customer choice can be influenced. If your tea has a high-quality and interesting packaging, it will interest the customer faster. You should order tea packaging design from KOLORO, because we will offer you a worthy option to set you apart from your competitors.

Trends in the Ukrainian tea market

Despite the steady decline in tea companies’ revenues over the past years, the first signs of growth are attributed to 2016. Andriy Samusenko, Chairman of the Supervisory Board of Mondelez Ukraine, calls 2016 the first year when sales stopped falling. According to him, since the second quarter of 2016, the market has stopped falling in volume. Retail turnover for the first half of 2016 increased by 97,051.2 thousand UAH compared to the first half of 2015 (1,311,767.3 thousand UAH vs. 1,214,716.1 thousand UAH).

The biggest upside is seen in green tea sales and the premium segment.

And yet, tea prices are steadily rising. Taras Likarchuk, president of the EEMEA Jacobs Douwe Egberts region, reports that over the past two years, the cost of tea has increased by 60%. But if we measure the price in dollar equivalent, the current prices are one third lower than the cost of products before the devaluation of the hryvnia. According to him, the cost of imported products has not increased, it has decreased by 4%.

The volume of tea bag sales is gradually increasing due to the decrease of loose leaf tea in packages (every year the figures grow by 2-3%). The same picture is formed for loose leaf tea (1-2%). This is due to the development of “Tea Card”, “Svit Tea” and other companies, which increase their turnover.

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Import and export of Ukrainian tea

The Ukrainian tea market is completely dependent on imports, and as a consequence, on currency changes. Ceylon teas occupy half of all imports, India and Kenya – 15%, China – 10%, and other countries – the remaining 10% percent.

In 2014, tea imports and exports to Ukraine were significantly higher than in 2015.

Comparison of imports and exports for 2014-2015 (in mln. dollars)

In the first half of the year (January-May) 2016, tea worth 116.05 million dollars was imported and exported worth 0.9 million dollars. Since the fall of 2016, imports continue to show growth. According to the State Fiscal Service, a total of 14530 tons of tea were imported from January to October.

Tea exports account for only a few percent of imports and are directed to neighboring countries – Belarus and Moldova. Despite the strained economic relations between Russia and Ukraine, according to economist Viktor Skarshevskyy, Russia remains Ukraine’s biggest trade partner.

According to an interview with Oleksiy Pavlenko, former Minister of Agrarian Policy, Ukraine intends to increase imports and exports of products in the near future and expand ties with new countries. In 2015, Ukraine imported crop products, including tea, worth 3 billion dollars. The minister claims that the government intends to pave trade routes and deepen trade relations in the coming year.

For example, Kenya, Ukraine’s largest trade partner among East African countries and the world’s biggest tea exporter, is ready to help sell Ukrainian products on African markets. Ukraine will also process fruits, flowers, coffee and tea from Kenya for export to EU countries.

Tea market analysis: major companies

Unilever

Unilever, a British-Dutch company controlling 15% of the Ukrainian tea market, has been cooperating with Ukraine since 1993. Unilever was founded in 1930 as a result of the merger of two manufacturing-importers. Until the merger of Procter & Gamble and Gillette, Unilever was the largest producer of consumer goods in the world.

In the Ukrainian market, the company’s products are represented by Lipton, Brooke Bond and Besida brands. These are brands of low and medium price category, which are in constant demand among customers.

One of Unilever’s products, Lipton is a mass-market oriented, mid-priced tea. It is a blend of teas from many plantations around the world. During the actions boycotting Russian products, Lipton was also hit, because at that time it was produced in Russia. With the opening of the factory in the Kiev region, the claims to the brand disappeared.

Lipton offers several series of teas to its fans. These are Lipton Yellow Label, Lipton in pyramids, green tea collection, Mamba, Superfruit and Arkenstone. All cartons are cardboard, some have a convenient lid to keep the packaging intact when opened and to keep the tea in the right conditions. All the boxes, except for the green tea series, are painted in the company’s trademark yellow color and decorated with images of berries, fruits and other additives depending on the type of tea. The packaging looks nice and stands out on the shelves because of the bright main tone.

Ahmad Tea

Ahmad Tea is a British company that exports its products to more than 80 countries. Tea under this brand is produced in Britain, Sri Lanka, Iran, China, UAE, Russia and Ukraine. In our country the brand has been presented since 1993, and in 1998 the Ukrainian Tea Factory was founded. The company’s products also fall into the middle price segment and are liked by the audience because of a decent combination of cost and quality.

Ahmad products have the same base for all tea packages. It is a dark green for black tea or light green for green tea cardboard box. Leaf tea is additionally packed in foil to preserve its properties for a long time. At the bottom of the package there are paintings of famous artists, for each type of tea they are chosen separately.

Ahmad Tea also has gift collections – British, London, Christmas and Mr.Breakfast. Tea packages from these collections have a festive design, they are more presentable, and Mr.Breakfast series is sold together with a soft children’s toy, which is very attractive to consumers.

“Orimi Trade

“Orimi-Trade appeared in Ukraine in 1998, having established a pilot production facility for tea packing. In 2013, a tea weighing factory was established in the Kiev region, where leaf and bagged tea produced by the company is packed today. “Orimi Trade” owns the trademarks “Princess Nuri”, “Princess Java”, “Princess Kandy”, “Princess Gita”. The company also represents the brands TESS and Greenfield. Orimi Trade’s products belong to the high and low price segment.

Orimi-Trade’s own products are produced in cardboard boxes with a familiar design. The packages look nice and correspond to the price category of tea.

Tess tea is sold in cardboard packages with bright colors chosen for the design. The upper part of the package is occupied by the company’s font logo, the lower part by a small illustration. It is nice that the manufacturer leaves a small viewing window through which you can see the filling of the box.

Greenfield is packaged in cardboard boxes with a concise design on which the company logo stands out. The nature illustration on the packaging is an eye-catching accent. It emphasizes the type of tea and disposes to its purchase. The brand’s products are divided into several collections. Classic teas include black and green varieties. Herbal Collection includes black and green blends with various flavorings (mango, molasses, raspberry, flavor combinations). Greenfield offers tea in pyramids, which has its own line of flavors, and a gift collection in presentable tins and as an assortment.

Other brands:

1. Mai-Ukraine has been developing in the tea market for about 20 years. It fills store shelves with Maysky, Lisma, Curtis and Richard brands, which belong to the low and medium price segment.
2. “Monomakh” is a tea company that came to Ukraine back in 1991. It was one of the first to open tea production in Ukraine and is now represented by the brands Monomakh, Lovare, Three Elephants, Chayni Masterpieces and Fruits.
3. “SoloMiya is a company that holds more than 11% of the market. It owns the brands Askold, Batik, Domashniy Chai and Nebesna Pagoda, which belong to the middle price category. Tea is available in cartons, granulated and loose leaf.

We looked at the brand platform of Ukrainian tea brands in more detail here.

Tea packaging design: fresh trends

There are clearly three main trends in modern tea packaging design.

1. Space. The packages seem to be freed from everything superfluous, leaving only the logo, the name and a soft white shade combined with pastel colors. This style creates a special culture of tea consumption, tuning in to calmness and lightness.

2. Floral motifs. With their help it is easy to emphasize the vegetal nature of tea, the connection with nature. The use of floral patterns additionally disposes the female part of the audience to the product.

3. bright accents are a new trend in tea packaging design. Non-standard color combinations, riot of colors are often successfully combined with geometric or black background to further emphasize the intrigue of the solution.

Ukrainian tea companies prefer to pack blends in cardboard boxes. This is the prevailing number of teas with medium and high value. The design of Ukrainian teas is laconic and simple. Most often the boxes are in the same style and are complemented with pleasant illustrations – associations with the variety and flavor of tea.

In the market you can also find tin boxes that contain high quality tea (for example, Basilur, Greenfield collection). However, the demand for them is small, most Ukrainians prefer to buy them as a gift. Their design is more presentable, it includes bright details, embossing and other decorative elements. You can read more about tea design here.

Tea sales in Ukraine: forecasts

1. Experts predict growth of tea sales in Ukraine in the coming year. According to them, such dynamics will continue at least until 2019.
2. Next year, tea producers are expecting a 3-4% increase in market volume and plus 10% revenue.
3. Dependence on tea imports puts pressure on Ukrainian companies. Therefore, attempts to grow tea on our territory will be logical. At the moment, tea, which is grown in small quantities in the west of Ukraine, cannot be produced in full volume and is expensive.

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