Ready-to-drink tea to grow 5% in 4-5 years: Study

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Published: February 22, 2019 12:08:04 AM

Ready-to-drink tea (RTD) is expected to grow about 5% over the next 4-5 years in India, which is higher than the expected growth rate of normal tea, says a study on domestic consumption of tea conducted by the state-run tea board.

Ready-to-drink tea to grow 5% in 4-5 yrs: Board (Representational image)Ready-to-drink tea to grow 5% in 4-5 yrs: Board (Representational image)

Ready-to-drink tea (RTD) is expected to grow about 5% over the next 4-5 years in India, which is higher than the expected growth rate of normal tea, says a study on domestic consumption of tea conducted by the state-run tea board.

The study done in 2018 by Deloitte Touche Tohmatsu India revealed that tea is a highly penetrated product with close to 88% of the total households in India reporting consumption of the product.

India is the second largest producer of tea in the world and makes up 23-26% of the global tea production.

Around 80% of the total tea produced in India is consumed by the domestic population. The study on consumption of tea in India was last carried out by Tea Board of India in 2007. In spite of having an enormous domestic consumption base, the per capita consumption figures in the country are low when compared to global standards.

Findings from the survey suggested tea consumption in India is skewed towards the northern and western parts of the country with the percentage contribution from the northern states accounting for about 32%, while that from the western region accounting for about 31%. The relatively low consumption belts of the East (including Northeast) accounts for about 19% while the southern states contributes towards 18% of the total domestic consumption of tea.

R Sanjith, commodities head of the United Planters’ Association of Southern India told FE that consumption of tea is growing around 3% in India. “According to the latest National Sample Survey Office (NSSO) data (68th round) available tea consumption in the urban areas is seen at 1,041 gram and in the rural area, it stands at 1,003 gram. Per capita consumption is growing steadily when compared to the 61st round where per capita consumption in the urban area stands at 810 gram and 714 gram in the rural area.”

Over 80% of the people consume tea either before breakfast or with breakfast, which is also one of the reasons behind the high in-home consumption of tea, according to the study.

Milk tea with sugar is the most popular choice with more than 80% of the households preferring the same. In recent times, however, the consumption of non-milk tea without sugar is on the rise, driven majorly by the increasing emergence of lifestyle-related diseases and increasing popularity of variants such as green tea.

Biscuits are the popular choice of accompaniments while having tea while large percentage of respondents prefer to have nothing while having it outside home. The western states, however, have a significant proportion of households preferring salted snacks with tea. The study highlighted that tea is by and large a price inelastic product and it is looked upon as common man’s drink.

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