Business ideas: Flavoured tea

With MarketWatch’s prediction that the global tea market will grow from $14.45bn in 2016 to $21.33bn in 2024, it’s clear that the beloved beverage will continue to remain a British staple and a popular choice around the world.

Yet UK tea consumers are displaying an unquenchable thirst for novelty, leading to increasing demand for more unusual flavour concoctions.

According to Mintel, one in five Brits are fans of flavoured tea but interest is peaking among those aged 16-34 who typically show more desire for a fruity tea than a traditional black tea brew.

This has driven a range of new and unique flavours – the likes of ‘watermelon splash’, ‘bonfire toffee’ and ‘rhubarb + custard’ from Bluebird Tea Co. and ‘berry orange’, ‘liquorice, fennel & mint’ and countless bubble varieties from The Teashed are currently making waves in the market.

With consumers continuing to clamour and an infinite variety of flavoured tea combinations possible, it could be a fruitful time for start-ups in flavoured and premium tea…

Starting a flavoured tea business: Why it’s a good business idea

In its projection of the food and drink trends set to redefine the industry, Mintel highlighted the potential for brands to gain traction by “using the familiar as a base for something new, but recognisable”.

This is a trend that tea companies could potentially hit upon perfectly, using the British institution of tea-drinking as a foundation from which to launch a unique product.

And the market is far from saturated. According to Mintel, launches of new flavoured tea products – namely those utilising seasonal flavours – are rare.

Only 1% of tea products launched in 2016 made the claim that they used seasonal flavours – whereas 13% of biscuit and cookie companies did – so seasonally flavoured teas are likely to face little competition from fellow UK tea businesses.

The demand for new flavours goes hand in hand with demand for premium, quality-crafted teas. Henrietta Lovell of Rare Tea Company told World of Tea that consumers will be more prepared than ever to pay significantly more for artisan flavoured teas created with care in tea gardens, shunning lab-created, mass-manufactured varieties.

Flavoured tea business opportunities

E-commerce has proved a flourishing platform for flavoured tea, and one way to utilise this growth is to set up a tea subscription service.

Young company Bluebird Tea Co. does the tea subscription service well, sending subscribers three new flavours each month. Regular customers can also choose their favourite flavour and have it delivered as often as they like.

In today’s instant gratification society, customer choice is fast becoming a focus for companies so giving customers the power to pick and choose teas could help your business find favour.

For example, Bluebird Tea Co., Teapigs and Pukka all offer a ‘pick ‘n’ mix’ service that allows customers to fill a box with the flavours they’d like.

Tea, particularly green and fruit varieties, has a reputation for enhancing health and wellness – so capitalising on this could also give your business a lucrative edge. T Plus Drinks, a UK start-up dedicated to providing tea which is tasty and “nutrient-dense”, is successfully combining premium flavours with the vitamins sought after by health-conscious consumers.

In a similar vein, Mintel has pointed out that the fast pace of modern life has created a market for drinks that de-stress and aid sleep. Incorporating flavours that conjure ideas of restfulness, such as camomile, lavender or chocolate, could open your product up to this market.

For those interested in opening a café or tea bar, tea cocktails are likely to give your start-up an attention-grabbing twist.

As just two examples out of hundreds of concoctions, East London bar Portside Parlour has infused camomile tea with scotch to create the ‘Sleepytime Sour’, while Hoxton hangout Made in the Shade serves St Clements tea mixed with rum, vodka, tequila and gin – reworking the classic Long Island iced tea so that it actually contains tea.

However, the capacity for uniquely flavoured teas in cocktails has not been thoroughly explored so this could be an opening for budding tea entrepreneurs to create something fresh.

Insider opinion

Richard Caines, senior household analyst at Mintel, has said that “Interest in more flavours of tea is high enough to suggest scope for tea brands to expand flavour choices”:

“Flavour development, including added flavours for standard black tea and flavours tailored for the seasons, can act as a much-needed platform to bolster interest in black tea among younger people who currently drink standard black tea less frequently than older people.

“As seasonal claims are seen on only a very small share of new product launches in the tea market, […] scope exists in the market for more seasonal blends.

“Given the high incidence of buying food and drink as Christmas gifts […] premium teas can look to tap into gifting occasions, including by launching limited edition seasonal-themed variants.”

Published Jan 2017