Tea - Egypt- Market Report
HEADLINES
- Despite maturity, tea registers healthy sales growth of
2% in volume and value in 2009
- Green tea is the most dynamic category in off-trade
sales with 6% growth in volume terms and 3% growth in value, reaching E£2
million in 2009, followed by fruit/herbal tea, with 4% growth in volume
terms
- Due to ongoing price reductions during 2009, value
sales register 2% growth, lower than the 4% CAGR registered over the
review period
- Badawy & Sons Co dominates tea in 2009 with a 59%
value share
- Tea will continue to grow over the forecast period,
registering a retail CAGR of 2% in volume, with green tea and fruit/herbal
tea the most dynamic in terms of retail volume, registering CAGRs of 7%
and 4% respectively
TRENDS
- The traditional tea drinking habit in Egypt remains the
key driver of volume sales in spite of the decline of this habit among
younger consumers. Tea continues to play a key role in the Egyptian diet
as it is part of the culture to drink tea both with and in between meals.
It is considered healthy to take tea after a heavy meal as it aids
digestion.
- Loose black standard tea is the main contributor to tea
volume sales and the most popular type of tea among Egyptians. This is due
to its reasonable price and its accessibility to all income levels
especially low-income groups.
- Green tea is witnessing strong growth and is considered
the most dynamic category due to its perceived health benefits. The main
group driving consumption of green tea is females seeking natural products
for slimming. This group consumes green tea on a daily basis. Demand is
driven mainly by Unilever Group, with its Lipton brand, which has
implemented an educational campaign targeting female consumers among the
younger generation.
- Supermarkets/hypermarkets dominated sales of tea in
Egypt in 2009 with a 52% share of off-trade volume sales. Consumers are
shifting from small grocery retailers to supermarkets/hypermarkets in
search of promotions and reduced unit prices. The trend became more obvious
towards the end of the review period in view of declining purchasing power
and rising price sensitivity among Egyptian consumers. Small grocery
retailers came in second position with a 48% volume share of tea sales in
2009, which was mainly due to the massive penetration of this channel
across the country.
- Unpackaged herbs are more common in Egypt than packaged
fruit/herbal tea. It is estimated that packaged fruit/herbal tea
represents just 7% of the total volume of herbal tea sold in Egypt.
Unpackaged herbs and herbal teas are widely perceived as superior as they
are fresher and contain no preservatives. Ottoman Co and Isis Co were the
first two companies to develop a packaged fruit/herbal tea range through
their respective Royal and Isis brands.
- Unilever Group introduced two new products in
fruit/herbal tea during 2009 through its Lipton brand; namely Hibiscus and
Forest Fruits. Both products feature attractive packaging in order to
appeal to consumers. The products are widely available in both off-trade
and on-trade channels.
COMPETITIVE LANDSCAPE
- El Arosa from Badawy & Sons Co still led tea in
2009 with a slight increase in value share, accounting for 59% of total
sales value. The brand is 100% locally owned, yet still enjoys high
popularity due to heavy advertising campaigns and strong distribution
channels in urban and rural areas. El Arosa products are cheaper than
products from its multinational rival Lipton in both loose tea and tea
bags. Lipton is a heavy spender on television advertising campaigns, and
several marketing themes were introduced during 2009. One of Lipton’s
campaign themes featured the Egyptian football team and played on the
popularity of football in Egypt while two other campaigns focused on the
quality of Lipton tea bags.
- Lipton, owned by Unilever Group, holds the second
position in tea, capturing a 29% value share in 2009. Lipton appeals to
upper and middle-class tea drinkers. Continuous marketing support in the
form of advertising campaigns and consumer promotions which offer a free
gift of a teaspoon or glass within packs of Lipton tea kept driving volume
sales.
- El Jawhara, a local brand owned by El Jawhara Co,
maintained third position with an 8% value share in 2009. El Jawhara’s
sales are concentrated in rural areas and upper Egypt, a conscious move
taken by the company in order to quickly establish its name in the market.
PROSPECTS
- Sales of tea are expected to continue seeing growth
similar to that seen over the review period. Growth levels are stable due
to the tea culture being firmly established in Egypt. Black standard tea
will continue to be the biggest contributor in volume sales during the
forecast period, as this is the most commonly consumed tea product as a
result of its lower price as well as the familiarity of Egyptian consumers
with this type of tea.
- Green tea will be the most dynamic category during the
forecast period. Green tea is taking advantage of the currently emerging
health and wellness trends; green tea is expected to secure a sizeable tea
share focusing on the target group of young, active female consumers due
to its alleged slimming attributes.
- Fruit/herbal tea is expected to be the second most
dynamic category during the forecast period in volume terms registering a
CAGR of 4%. Fruit/herbal tea appeals to younger consumers as it adds
novelty tastes to tea such as the forest fruits and hibiscus flavours
introduced in 2009 by Lipton.
- Prices are expected to decline during the forecast
period as a result of the introduction of private label products, which are
approximately 25% cheaper than equivalent branded products. Moreover,
declining purchasing power will force premium brands to run several
consumer promotions such as price reductions in order to gain volume
sales.
