Canadian hot tea consumer market

Part
01
of five
Part
01

Market Size - Hot Tea Consumer Market: Canada

The Canadian hot tea market is valued at $437 million in 2019 and is expected to reach $503 million by 2023 with a CAGR of 3.58%. Canada's total tea segment is valued at $699 million and is projected to reach $838 million by 2023 growing at 4.7% annually.

Methodology

To begin with our research, we tried searching for the total market size of consumer tea products in Canada. Next, we decided to identify the market share of hot tea segment from the overall market of all tea products. We were able to highlight insights regarding industry revenue, consumer profile, market growth, and per capita consumption for hot tea products like tea bags, leaf tea, black tea, green tea, among others. For this research, we referenced credible sources like World Tea News, Tea Association of Canada, GBC First, Allied Market Research, and Statista.

MARKET SIZE and growth

According to a recent report by Allied Market Research, the total market size for tea products in Canada is valued at $699 million in 2019 and is projected to reach $838 million by 2023, registering a CAGR of 4.7%. The share of hot tea products (tea bags, loose-leaf tea, black tea, green tea) stood at 62.5% or $437 million in 2019. The Canadian hot tea segment featured a steady annual growth of 1.7% in 2016 and reached 3.6% in 2019. It is noted that the segment's annual growth will top-off at 4.4% in 2020 and will slowly decline to 2.3% by 2023. The total volume of hot tea products consumed in Canada for 2018 is 17.3 million kg and is expected to reach 18.5 million kg by 2023, registering a CAGR of 1.35%. While the average price per unit for hot tea products in Canada is $24.97 in 2019 and is estimated to reach $27.19 by 2023 (CAGR 1.72%).

CONSUMPTION statistics

According to a report by the Tea Association of Canada, the amount of tea consumed by Canadians has increased by over 2x since 1991. The per capita consumption of tea in 1991 was only 36 liters while for 2015 it stood at 85 liters, registering a CAGR of 3.64%. According to a recent article by World Tea News, the average Canadian spends about $25.50 per year on hot tea, while Americans pay about $15.95 per year. Also, Canadians consume nearly twice the amount of hot tea compared to Americans (0.43 lb vs. 0.26 lb). According to Statista, the average per capita revenue for the hot tea segment amounts to $11.73 in 2019 and is expected to reach $13.06 by 2023.
According to the Tea and Herbal Association of Canada, millennials (aged 19–37) account for more than 30% of all Canadian tea drinkers. The average Canadian tea drinker's profile includes — 55% female, a resident of a city (39%) or suburbs (46%), belongs to a household with 3-4 members (35%), and categorized as a medium tea drinker (41%).

Retail insights

In Canada, the grocery outlets account for 47% to 53% of all tea shopping; this figure drops to 37% for millennial tea drinkers. It is further noted that about 12% of Canadians shop for tea at Walmart and Costco, 22% buy from specialty stores, 10% buy from tea shops and only 3% purchase tea products from departmental stores.
Part
02
of five
Part
02

Insights and Trends - Hot Tea

Six trends within the hot tea market in Canada include: Millennials, immigrants, health, tea in the office, herbal teas, and milk and sugar. Below is a description of these trends.

Millennials

Canadian millennials represent the fastest hot tea drinking segment of the population. Statistics from the Tea and Herbal Association of Canada, project that by 2020 millennials (that is, people between the 19 to 37 age bracket) will have doubled their tea purchases. The association further points out that millennials currently account for more than a third of the country’s tea drinkers.

Immigrants

Canada’s total population is around 36 million people. Of these people, there are an estimated 6 million Asian born immigrants. These people have well-established tea drinking cultures and traditions which are bond to accelerate the tea drinking culture in Canada. In addition, Africans (who also comprise a sizable part of the immigrant population) have developed tea traditions which will further promote the overall tea culture in Canada.

Health

Hot tea marketers highlight the health benefits of tea. These include: Decreases levels of cholesterol, boosts overall heart health, lower blood pressure, revitalizes the body and promotes a relaxing feeling. However, a survey that was commissioned by the Tea and Herbal Association of Canada and conducted by Nielsen revealed that “relaxing” was the predominant positive health association of hot tea by Canadian consumers. Millennials in Canada perceive tea as an “affordable luxury” due to its health benefits (such as, anxiety reliever and sleep promoter).

Tea in the Office

According to findings by The Tea and Herbal Association of Canada, there was a significant uptake in the amount of tea that was drank in the office in 2017. This location was previously in the sixth position of the most popular places for tea consumption in Canada but had climbed to position three. This trend is projected to continue into the future.

Herbal teas

Herbal teas have been in Canada for a while but currently hot tea drinkers are trying out various blends and flavors. A reason for this trend is the entry of Millennials, as well as, the fact that baby boomers are retiring leaving them with more free time to drink tea. Millennials are attracted to herbal teas due to their taste and relaxation properties while older drinkers choose herbal teas for their perceived health benefits. Nonetheless, the popular flavors are peppermint and chamomile.

Milk and sugar

Canadian tea consumers are seeking alternatives to traditional dairy milk and sugar. Some of the popular milk options include: Coconut milk, cashew milk and almond milk. Meanwhile, sugar is being replaced by raw sugar and honey. Popular tea outlets like Starbucks and David’s Tea are already offering these alternatives.

Part
03
of five
Part
03

Insights and Trends - Cannabis Trends For Tea

After conducting in-depth research using industry-related websites, media articles, blog sites, and news articles, details regarding the trends in the cannabis tea market in Canada were not available in the public domain. Nonetheless, we gathered valuable insights regarding cannabis-infused beverage market, top cannabis tea brands in Canada, and cannabis tea market. We found that there is an increased demand for the cannabis-infused beverages (both alcoholic and non-alcoholic) in Canada which also include cannabis teas. However, cannabis-infused coffee market is estimated to grow rapidly compared to the cannabis-infused tea market in Canada. According to the recently published report by Market Watch, 2019, "CBD-infused premium tea market remains in limbo." The top cannabis tea brands in Canada include Stillwater Tea, Evergreen Herbal Tea, Kikoko, Canna Tea, Subtle Tea, TopLeaf Canada, Skyline Boulevard Co., Mad Hatter Coffee and Tea Co., Bud Brother, and Apothecary Mary’s Wellness.

Below are the details of our methodology that includes the details of how we searched and why the data is not available as well as the details of our findings.

METHODOLOGY

To find the trends in the cannabis tea market in Canada, we initially started searching through credible media sites, news articles, and press releases such as Digital Journal, Green Entrepreneur, News18, CBC, Forbes, and others. But these sources did not provide any information related to the trends in the cannabis tea market in Canada. Most of these articles discussed the legalization of cannabis in Canada.

Next, we searched through the survey reports, blog articles and other related reports through Market Watch, Canada.ca, Canadian Journal of Respiratory Therapy, Food Institute, Miller Coors Blog, and others. The report obtained from Market Watch revealed that the market for CBD-infused coffee is expected to rise while the same is not true for CBD-infused tea market. The tea market has received less attention. It mentioned that the "CBD-infused premium tea market remains in limbo." Other reports detailed out the major companies which have planned or already investing in the cannabis-infused non-alcoholic beverage market and many other related information. But no information was found about the trends in the cannabis tea market in Canada.

After this, we changed our strategy and looked for alternative terms such as trends in the specialty tea or high tea market in Canada. But again we were not able to locate the desired information. Then, we tried to locate the cannabis legalization issue in Canada and found that recreational cannabis is now legal in Canada from October 2017 and that from October 2019, the use of cannabis will be legal in edible products including food and drinks. This could be the likely reason for unavailability of the desired information that the use of cannabis in edible products such as teas was not legal in Canada. Due to this reason, no research companies or media companies have worked in this field to identify the trend.

Therefore, after conducting in-depth research using the above mentioned strategies, we have concluded that the information on the trends in the cannabis tea market in Canada is not available publicly. However, based on our research, we were able to learn that the cannabis-infused non-alcoholic drinks are in high demand among consumers in Canada. Additionally, we found some of the top cannabis tea brands of Canada through Leafly, which is the "world’s largest cannabis information resource, empowering people in legal cannabis markets to learn about the right products for their lifestyle and wellness needs." We further searched through this site hoping it may provide some other information related to cannabis tea trends in Canada but this also did not provide any other useful information in this regard. Below we have listed the helpful findings obtained in our research.

HELPFUL FINDINGS

  • There is an increasing interest in cannabis-infused non-alcoholic drinks in Canada which also include tea.

  • Stillwater Tea, Evergreen Herbal Tea, Kikoko, Canna Tea, Subtle Tea, TopLeaf Canada, Skyline Boulevard Co., Mad Hatter Coffee and Tea Co., Bud Brother, and Apothecary Mary’s Wellness are some of the top cannabis tea brands in Canada.

  • Based on the Market Watch report, 2019, the "CBD-infused premium tea market remains in limbo." The report illustrated that although there is a high demand for cannabis-infused coffee, the market for cannabis-infused tea has received less attention.

  • DAVIDsTEA is a Canadian beverage brand that "offers a differentiated selection of proprietary loose-leaf teas, prepackaged teas, tea sachets, and tea-related gifts in over 240 locations throughout North America, seemed like the likely candidate to lead the CBD-infused tea space."

  • On average, the market value for the cannabis market in Canada is estimated to be between $7 billion and $10 billion in 2018. Non-alcoholic beverages which include coffee, tea, alkaline water, and others account for between 20% and 30% (or about $3 billion) of the total market value.

  • The federal government will legalize the use of edible products containing cannabis from October 17, 2019. After the legalization of recreational cannabis in Canada from October 2017, the demand for cannabis products has increased high in many provinces. It has been estimated that cannabis-infused edibles and beverages will have even higher demand in the future.

  • Based on a recent survey, conducted by AT Kearney about "41% of American and Canadian consumers would try food infused with cannabis if it becomes legal."




Part
04
of five
Part
04

Demographics - Canadian Hot Tea Drinkers

Females are the largest consumers of tea in Canada. On the other hand, millennials represent the largest segment of tea drinkers in Canada. Most tea consumers live in Ontario with around 51% of tea drinkers while there are 26% in Western Canada.

RESEARCH STRATEGY

We were able to find the age, gender, and the region of Canadian hot tea drinkers on various research reports and news articles. We’ve presented our findings below. However, we were unable to find the income and educational level of Canadian hot tea drinkers. The following research strategies were applied to find the two missing information:
Strategy 1:
We conducted an exhaustive search on news portals, research report providers’ websites, government databases, and industry associations to find the income and educational level of Canadian tea drinkers. However, we were unable to find any information on this. A few websites that we had searched were CBC/Radio-Canada, Market Research, Euromonitor, Statista, Government of Canada Statistics, Beverage Daily, World Tea News, and Allied Market Research. These websites provided other information such as flavors, preferences of consumers, reasons they prefer tea, occasions they drink, where they drink, how they drink it, and changing trends in the Canadian tea market. A few other websites provided information about the key players in the Canadian tea market, market size, consumption statistics, retail prices, sales value by tea type, and other such information that were not relevant to the information we were looking for.

We found a few old-dated research reports, surveys, and news articles that covered some information about the income of tea drinkers on websites such as the Tea Association of Canada, Mintel, and Ipsos. However, the information was too old to be valid for the current year. And hence, we have excluded these websites from the research.
Strategy 2:
We had to change our strategy by looking for some data that would help us triangulate the information about the income and educational level. We tried looking for the demographic profile of the customers of the leading tea brands in Canada such as DavidsTea to triangulate any information based on their customer profile. However, we were unable to find relevant information to triangulate this data.
We also implemented another strategy by looking for the general demographic profile of the percentage of the urban and suburban population of Canada with the help of the tea consumption percentage and annual tea spend per person in these regions. However, we were unable to triangulate this information due to the possibility of choosing the inefficient sample and variability of data that would have resulted in skewness.
Strategy 3:
We tried looking for research reports on Euromonitor, Mintel, Statista, and ReportLinker that were behind the paywall to see if those could yield any information. However, the summary of the report did not give us enough information to validate if the information about the income and educational level of Canadian hot tea drinkers was available on these websites.

DEMOGRAPHICS — CANADIAN HOT TEA DRINKERS

AGE

According to the Tea Association of Canada, millennials (aged 19 to 37) represent more than one-third of all Canadian tea drinkers. It is expected that the tea consumption by the millennials will more than double by 2020 as they represent the fastest emerging segment of tea purchasers in Canada.
Around 55% of Canadians drink tea at least once a week, according to a study conducted by Nielson. According to the Nielson’s research report, about 64% of millennials in Canada said that they were tea drinkers, and the age-group that consumed the most tea in Canada were people aged 20-29.
Baby Boomers (aged 51-69) still prefer tea as one of their beverage of choice. They now have more time to drink tea as they are also retiring. However, many baby boomers are still loyal to coffee as the dominant hot drink in their daily diet.

GENDER

Females consume more tea in Canada with around 55% of the tea drinkers dominated by the female group, whereas the remaining 45% belonged to the other gender, according to the Tea Association of Canada.

WHERE THEY LIVE

According to the Tea Association of Canada, around 39% of tea drinkers in Canada live in the urban region, whereas 46% of tea drinkers live in the suburban region of Canada. Most tea consumers live in Ontario with around 51% of tea drinkers while there are 26% in Western Canada. About 35% of tea drinkers in Canada stay in 3-4 person households while around 33% live in 2-person households.

Part
05
of five
Part
05

Psychographics - Canadian Hot Tea Drinkers

While the information about what hot tea drinkers in Canada like to do is not available, we found some information about the tea drinking population in Canada. Tea drinkers in Canada can be divided into heavy drinkers, medium drinkers, and light drinkers. Canadians are consuming tea out-of-home, mostly at coffee shops and specialty tea stores.
Provided below are the research strategies used to find the requested information, as well as a deep dive into our key findings.

RESEARCH STRATEGY

First, we consulted some Canadian lifestyle and related reports from Euromonitor International and Beverage Marketing Corporation, to obtain statistics about the lifestyle or hobbies of tea consumers in Canada. However, none of the articles that we found there provided the requested information, as they only covered topics like; what influences consumer behavior, how prices are preventing millennial consumption, and the overall consumption of tea in Canada.
Next, we looked for articles related to Canadian tea drinkers to find some data on what tea consumers do daily and only found sources that contained information concerning trends for millennials and the relevance of tea drinking in Canada. However, the articles also failed to answer the question about what tea drinkers in Canada like to do. Some sites consulted include MENU, Beverage Daily, Somethings Brewing, etc.
Finally, we consulted Canadian the websites of various tea brands with the aim of finding out their target market. We looked through sites like the Teadore, Twinings, and Tetley. However, these companies did not include their target consumers; they were more focused on the flavors and variety of herbs used to make tea. Although Teadore related tea drinking to outdoor activities, no other tea brands that we consulted provided similar information, and we could not make a general assumption based on one specific brand.
We concluded that this data is not available in the public domain because "things people like to do" varies. That is to say, for example, that, ten different people can like tea, but each drinks it for various reasons.

SEGMENTATION FOR CANADIAN TEA DRINKERS

Tea consumers in Canada are categorized as heavy, medium, and light drinkers. Canadians mainly drink tea for the health benefits it provides such as its relaxation, sleep, and anxiety relief attributes. They prefer to sample tea before purchasing it and usually prefer using tea bags in making their tea.

HEAVY DRINKERS — Heavy tea drinkers in Canada are those who consume up to 8 or more cups of tea per week. However, on average, heavy tea drinkers consume 14.1 cups of tea per week. Older people (usually female) with no kids typically constitute this category, and they make up 35% of the tea drinking population in Canada.
MEDIUM DRINKERS — Medium tea drinkers in Canada consume between 3-7 cups of tea per week, making an average of 5 cups per week consumed. These constitute 41% of the tea drinking population in Canada.
LIGHT DRINKERS — Light tea drinkers account for 23% of the total tea drinking population in Canada. They typically drink 1-2 cups of tea per week. This type of tea drinkers involves mainly young and single individuals.

WHERE THEY LIKE TO DRINK TEA

Nowadays, Canadian tea drinkers (especially millennials) prefer to consume tea out-of-home more than ever before, as people are often very busy and on the move. Also, with the availability of tea at coffee shops, donut shops, and specialty tea shops, more Canadians have been drinking tea outside of their homes. However, in-home consumption of tea in the evening has increased, especially herbal tea consumption, as Canadians have found it to be an effective sleep aid.
Sources
Sources

From Part 01
Quotes
  • "Canadians consume 0.43 lb of hot tea, spending $25.50 per year compared to Americans who drink an average 0.26 lb and spend $15.95 on hot tea."
  • "Millennials (aged 19–37) currently make up more than a third of all Canadian tea drinkers, according to association president Louise Roberge. "
  • "The median age of all Canadians is 40.8 years and most (82%) live in urban areas, according to government statistics."
  • "Sales of all hot beverages in all channels in Canada through April 2016 were estimated at $1.8 billion in 2016, with hot tea accounting for $232 million in sales. Coffee, by comparison, earned $1.3 billion."
  • "Grocery is still the place where most people shop for tea (47%) but that figure drops to (37%) for Canada’s millennial tea drinkers, said Monk. The study showed 12% of the general population shopped for tea at Walmart and Costco in the past year and 3% buy tea at department stores."
Quotes
  • "Revenue in the Tea segment amounts to US$437m in 2019."
  • "The average revenue per person in the market for Tea amounts to US$11.73 in 2019."
  • "In the market for Tea, volume is expected to amount to 18.5 mkg by 2023."
  • "The average volume per person in the market for Tea amounts to 0.5 kg in 2019."
  • "The average price per unit in the market for Tea amounts to US$24.97 in 2019."
Quotes
  • "Established in 1954, as the Canadian Tea Council with the founding countries of Sri Lanka and India, the council carried the role of promoting tea consumption to Canadians. Today, as the Tea Association of Canada, we are a not-for-profit association representing the entire tea industry in Canada from bush to cup."
  • "The amount of tea that Canadians drink has doubled in the past few decades. As of 2015, Canadians drink 85 litres per person per year, up from 79.4 litres in 2008, and only 36 litres in 1991!"
Quotes
  • "Tea shops are sexy and skew young Though only 10 per cent of tea in Canada is bought there (compared to 53 per cent at grocery stores), tea shops are growing in popularity. "
  • "Some 22 per cent of Canadians say they buy tea from specialty stores “more often” than a year ago, according to a recent NPD Group study."
From Part 02
Quotes
  • "Millennials (aged 19–37) currently make up more than a third of all Canadian tea drinkers, according to association president Louise Roberge. "
  • "Spending on tea by Canada’s Millennial tea drinkers is expected to double by 2020, according to the Canadian Tea and Herbal Association."
  • "Grocery is still the place where most people shop for tea (47%) but that figure drops to (37%) for Canada’s millennial tea drinkers, said Monk. The study showed 12% of the general population shopped for tea at Walmart and Costco in the past year and 3% buy tea at department stores."
  • "Monk reports that half check reviews and coupons online and that 57% of millennials say they know the stores that offer the best price. He added that 73% of millennials say price is the first thing they look at when purchasing grocery items."
  • "Millennials report buying tea out of home or at specialty tea and coffee shops,” said Monk. Millennials in Canada are more likely than the general population (17% vs. 13%) to buy tea and tea accessories at a Tim Horton’s style coffee shop, followed by a specialty tea shop like DAVIDsTEA (15% vs. 12%), with 13% versus 9% reporting a tea purchase at a specialty coffee shop such as Starbucks in the past 12 months. Only 1% purchased tea online and 1% reported buying tea at a traditional tea room"
Quotes
  • "n a recent survey conducted by Nielsen for the Tea and Herbal Association of Canada, findings showed that positive attitudes towards tea remain strong, with “relaxing” leading the list for positive health associations for consumers (Nielsen 2017)."
Quotes
  • "Canada – where the average tea drinker has 11 different varieties in their kitchen cupboards – has a particularly progressive tea-drinking population, which Euromonitor attributes to immigration from countries with strong tea-drinking cultures (China, India, the Middle East and Russia), an interest in being health conscious, and a penchant for learning about different varieties. Sales of tea reached $1.3-billion in Canada in 2015 – a 23 per cent increase over the year before."
From Part 03