Canadian Market Overview
Presentation by: Louise Roberge,
President, Tea Association of
Canada
AGENDA
Introduction
Market Place Overview
Trends & Opportunities
Barriers
Tea Association of Canada Programs
MARKET PLACE OVERVIEW
Tea Imports
Market Share by Country of
Origin
Consumption
Grocery Sales
Foodservice Sales
Tea Imports
Volume Metric Tons (000,000)
25
20
15
Green
Tea
10
Black
Tea
5
0
2000 2001 2002 2003 2004 2005 2006 2007
Source: International Tea Committee
Tea Imports 2007
Category Percentage
22%
Black
Green
78%
Source: International Tea Committee
Imports from Major Producing
Countries 2004-2008
2500
2000
1500
India
Sri Lanka
Kenya
China
1000
500
0
2003
2004
2005
2006
2007
2008
Producing Country Canadian
Market Share Black
6000
5000
4000
India
Sri Lanka
Kenya
3000
China
UK
2000
USA
1000
0
2003
2004
2005
2006
2007
2008
Producing Country Canadian
Market Share Green
1800
1600
1400
1200
China
1000
Japan
UK
800
USA
600
400
200
0
2003
2004
2005
2006
2007
2008
Imports $
160000
140000
120000
100000
Black Tea
80000
Green Tea
Total
60000
40000
20000
0
2001
2002
2003
2004
2005
2006
2007
Black Tea Imports Volume
6000
5000
4000
2003
2004
2005
3000
2006
2007
2000
1000
0
India
Sri
Lanka
Indo
China Japan VietnamKenya Malaw i
&HK
UK Germany oEU
US
ARG Papua Other
New
Guinea
Black tea Imports $
70000
60000
2001
50000
2002
40000
2003
2004
30000
2005
20000
2006
2007
10000
Ar SA
ge
nt
in
a
O
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er
U
EU
th
er
an
y
O
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er
m
U
G
In
Sr dia
iL
an
k
In
do a
ne
C
si
hi
na a
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K
Ja
pa
n
Ke
ny
a
M
al
aw
i
0
Green Tea Imports Volume
1800
1600
1400
2001
1200
2002
2003
1000
2004
800
2005
2006
600
2007
400
200
0
China & HK
Taiwan
Japan
Other Asia
UK
US
Other
Green Tea Import $
12000
2001
10000
2002
8000
2003
2004
6000
2005
2006
4000
2007
2000
0
China &
HK
Taiwan
Japan
Other
Asia
UK
US
Other
Consumption
Litres Consumed Per Person
Series1
1
2
3
4
5
6
7
8
9
10
11
12
42
61
51
63
68
73
71
73
75
67
62
70
1991
1993
1995
1998
1999
2001
2002
2003
2004
2005
2006
2007
Canadian Beverage Consumption
Share of Throat
(Litres per Person)
450
400
350
300
250
22
27
27
68
73
99
102
29
22
28
28
28
67
70
102
104
73
56
49
97
99
97
101
109
111
117
114
110
103
95
86
82
81
84
86
88
87
89
1991
1994
1996
1999
2001
2003
2005
2007
42
105
200
150
100
50
0
Alchohol
Soft Drinks
Coffee
Tea
Juice
Tea Sales by Category
(Dollars)
450,000,000
400,000,000
350,000,000
300,000,000
Hot Tea
250,000,000
RTD
200,000,000
Total Tea
150,000,000
100,000,000
50,000,000
0
1997
2002
2003
2004
2005
2006
2007
2008
TOTAL READY-TO-DRINK SALES
1997-2008 CANADIAN DOLLARS
120,000,000
100,000,000
80,000,000
Ice Tea Mixes
60,000,000
RTD (ex cans)
TRD (cans)
40,000,000
20,000,000
0
1997 2002 2003 2004 2005 2006 2007 2008
Tea Sales Yearly Trend (2003 – 2008)
Dollars (000,000’s)
120
100
80
60
40
20
0
National
West
Regular Tea Bags
East
Ontario
Quebec
Specialty Tea Bags
Total Tea Sales Maritimes 2008
30,000,000
25,000,000
20,000,000
Hot Tea
15,000,000
RTD
Total Tea
10,000,000
5,000,000
0
1
Tea Sales (Hot) Maritimes
14
8
Total Regular
Tea Bags
Total Specialty
Tea
Green Tea
6
Herbal Tea
12
10
4
2
0
2004
2006
2008
Flavoured incl.
Decaf
Unspecified
Speacialty Tea
Tea Sales (RTD) Maritimes
2008
5000000
4500000
4000000
3500000
3000000
Ice Tea Mixes
2500000
RTD (exc. cans)
RTD (cans)
2000000
1500000
1000000
500000
0
1
Total Tea Sales Quebec 2008
70000000
60000000
50000000
40000000
Hot Tea
RTD
Total Tea
30000000
20000000
10000000
0
1
Tea Sales HOT- Quebec
20
18
16
14
12
10
8
6
4
2
0
Total Regular
Tea Bags
Total Specialty
Tea
Green Tea
Herbal Tea
2004
2006
2008
Flavoured incl.
Decaf
Unspecified
Speacialty Tea
Tea Sales RTD Quebec 2008
16000000
14000000
12000000
10000000
Ice Tea Mixes
8000000
RTD (excl canx)
RTD (cans)
6000000
4000000
2000000
0
1
Total Tea Sales Ontario 2008
180,000,000
160,000,000
140,000,000
120,000,000
Hot Tea
100,000,000
RTD Tea
80,000,000
Total Tea
60,000,000
40,000,000
20,000,000
0
1
Tea Sales - Ontario
45
40
Total Regular
Tea Bags
Total Specialty
Tea
Green Tea
35
30
25
20
Herbal Tea
15
10
5
0
2004
2006
2008
Flavoured incl.
Decaf
Unspecified
Speacialty Tea
Total Sales RTD Ontario 2008
40,000,000
35,000,000
30,000,000
25,000,000
Ice Tea Mixex
20,000,000
RTD ( excl cans)
RTD(cans)
15,000,000
10,000,000
5,000,000
0
1
Total Tea Sales West 2008
180,000,000
160,000,000
140,000,000
120,000,000
Hot Tea
100,000,000
RTD Tea
80,000,000
Total Tea
60,000,000
40,000,000
20,000,000
0
1
Tea Sales – Western Canada
40
Total Regular
Tea Bags
Total Specialty
Tea
Green Tea
35
30
25
20
Herbal Tea
15
10
5
0
2004
2006
2008
Flavoured incl.
Decaf
Unspecified
Speacialty Tea
Tea Sales RTD West 2008
50,000,000
45,000,000
40,000,000
35,000,000
30,000,000
Ice Tea Mixex
25,000,000
RTD(excl cans)
RTD (cans)
20,000,000
15,000,000
10,000,000
5,000,000
0
1
Tea rebounded in shelf presence at Grocery retailers
driven by Green Tea and Flavoured Black Tea SKUs
1999
Avg. # of
Items
2005
Avg. # of
Items
71.0
106.6
109.7
$1,271,167
Total Regular Tea
11.0
18.1
17.6
$4,017,706
Total Specialty Tea
60.0
88.5
91.3
$742,998
Flavoured Black Tea
Green Tea
Herbal Tea
16.0
6.0
36.0
16.7
18.4
41.6
18.6
21.2
40.1
$551,820
$950,105
$640,917
Total Tea Bags
2006
Avg. # of
$/Avg. # of
Items
Items
Source: ACNielsen MarketTrack, National Grocery Banner - Latest 52 Weeks Ending January 20, 2007
Penetration is growing faster among households who associate
Hot Tea with health benefits
Household Penetration
(Home Purchases)
2006
61.6
2007
61.7
Total Tea
35.0
40.2
+5.2
Total Tea Drinkers
Regular Black
Specialty
Green
35.3
43.5
20.2
35.4
44.3
22.9
Health Associated
+0.1
+0.8
+2.7
19.9
25.3
12.2
22.8
29.7
15.8
+2.9
+4.4
+3.6
Note: Health Associated penetration is a percentage of total Hot Tea Drinkers household penetration
Source: ACNielsen Homescan – 52 wks to July 7, 2007 vs YAG
Foodservice Sales
Restaurants in Canada
served 406,459,000 cups of
Hot Tea in the past 12
months
$
Hot Tea sales at Restaurants
in Canada were approx.
$609,688,000 * in the past 12
months
*Based on AEC multiplied by servings
Regular Tea in slight decline while Specialty Tea
experiencing strong volume gains on the year
Servings Volume Hot Tea (000’s)
80000
70000
Tea-Hot
Regular
60000
50000
40000
30000
Tea-Hot
Specialty
20000
10000
0
MAM'07
JJA'07
CREST®
YE May 2008
SON'07
Total Canada
DJF'07
MAM'08
Proprietary & Confidential for NPD clients
Tea occasions outside the home peak in
the afternoon whereas evening is the
peak for inside the home.
Tea Consumption (Time of Day) - % Inside versus Outside the Home
100%
80%
74%
60%
40%
59%
45%
39%
41%
28%
20%
0%
Morning
Afternoon
Inside the home
Base = Hot tea drinkers, N=11,234
Evening
Outside the home
Almost ¾’s of
respondents
consume tea at
home in the
evening
Three out of ten hot tea drinkers have
consumed hot tea at the workplace or
family restaurant.
Thinking about the last three months, where have you consumed Hot Tea when
you are outside of your home?*
Workplace
30
Family
restaurant
30
Coffee/donut
shop
27
21
Fine dining
13
Specialty shops
7
Fast food
Tea room
6
Base = Hot tea drinkers that drink hot tea outside of their home, N=7,497
*Multiple mentions
Source NPD Group Canada
REST®
Who is the Hot Tea Consumer?
18 to 24 Year Olds
25 to 34 Year Olds
9%
15%
35 to 44 Year Olds
15%
YE May 2008
Total Canada
45+ Year Olds
57%
Proprietary & Confidential for NPD clients
Snapshot of the Hot Tea consumer:
Specialty Tea
Regular Tea
30% under the age of 34
38% between ages 45-64
59% Females
61% Females
35% consumed at Supper
38% consumed at Morning
Meal
Friday is the most popular
day of the week to consume
Hot Tea!
Key Learning's For Tea in Commercial
Foodservice…
Key Trends in Commercial Foodservice:
Ethnic
Health
Snacking
Tea, more so than any other beverage, can capitalize on
these influential trends
Trends & Opportunities
 Green Tea
 Tea as an ingredient in cooking
and cocktails
 Tea as a health and beauty aid
 Fancy Tea bags
 Cause related Tea
 Organic Tea & foods in general
Size of the Tea Market in Canada
1997
91% Increase in 11 years
DOLLAR
S $(000’s)
2008
DOLLARS
$(000’s)
%increase
since 1997
IMPORTS
77.1
IMPORTS (ITC 2007)
137.5
78.3
SALES HOT
115.2
SALES HOT
191.3
66
REGULAR
73
REGULAR
89.2
22
SPECIALTY
42.2
SPECIALTY
102.1
142
217.1
208
SALES RTD
70.4
SALES RTD
RTD (excld cans) 10.9
RTD (excld cans)
98.8
806
RTD Cans
35
RTD Cans
69.4
98
Ice Tea Mixes
24.5
Ice Tea Mixes
48.8
99
TOTAL HOT & RTD
185.6
TOTAL HOT & RTD
408.5
120
SALES
FOODSERVICE (est.)
340
SALES
FOODSERVICE (est.)
609.6
79
TOTAL
602.7
TOTAL
1,155.5
91
Size of the Tea Market in Canada
2007 11% Increase over last year
DOLLAR
S $(000’s)
2008
DOLLARS
$(000’s)
%increase
IMPORTS
123.7
IMPORTS
137.5
11
SALES HOT
181.4
SALES HOT
191.3
5.4
REGULAR
88.8
REGULAR
89.2
.4
SPECIALTY
92.6
SPECIALTY
102.1
10
217.1
4.8
SALES RTD
207.1
SALES RTD
RTD (excld cans) 92.2
RTD (excld cans)
98.8
7
RTD Cans
65.7
RTD Cans
69.4
5.6
Ice Tea Mixes
49.1
Ice Tea Mixes
48.8
-.6
TOTAL HOT & RTD
388.5
TOTAL HOT & RTD
408.5
5.1
SALES
FOODSERVICE (est.)
527.5
SALES
FOODSERVICE (est.)
609.6
15.5
TOTAL
1,039.7
TOTAL
1,155.5
11
Health Claim
• After a period of extensive review, Health
Canada as granted us with a health Claim for
Green Tea:
• The consumption of green tea helps to
protect blood lipids from oxidation
• Green Tea increases antioxidant capacity in
blood
• Green tea has an antioxidant effect in blood (
blood lipids)
• We are pursuing to have a similar claim for
Black tea
Barriers Regulatory Issues
HIGH Priority
MEDIUM Priority
Healthy Living
PESTICIDE
MRL’S
CBSA-CFIA
NHP’s
Product Specific
Health Claims
WHO report
Organic regulation
Generic Health
Claim
MANDATORY
NUTRITION
LABELLING
Allergen Regulation
Codex
Stewardship
Ontario
LOW Priority
Health &Safety
Act
Caffeine
Labelling
On the Radar
Pest Management Regulatory
Agency (PMRA)
• Canadian MRL’s (default 0.01 ppm)
• We are actively pursuing our efforts for
Global Harmonisation with the Pest
Management Regulatory Agency keeping
them inform of the progress from the
Global Initiative Working
New Regulations
•
•
New Organic Regulations will be in effect in June 2008
www.inspection.gc.ca
•
New Allergen Regulation:The proposed amendments to the
Food and Drug Regulations- Enhanced Labelling for Food
Allergens, Gluten Sources and added sulphites was published
in Canada Gazette, Part I on Sat. July 26th. They are
available at the Canada Gazette website:
http://canadagazette.gc.ca/partI/index-e.html.
•
Labelling regulation Guide to Food Labelling and Advertising
for CFIA contacts for other labelling enquiries
–
Organic Regulation
• Organic Products Regulations:
• CFIA Website: www.inspection.gc.ca
• Canada Gazette Website: www.canadagazette.gc.ca
• Organic Production Systems Standards:
• Canadian General Standards Board Website:
• www.pwgsc.gc.ca/cgsb
• Contact:
• Michel Saumur, Manager, Canada Organic Office
• (613) 221-7165 msaumur@inspection.gc.ca
Future Challenges
•
•
•
•
•
•
•
•
•
Consumer 2012
Health and well being
Higher Quality and premiumisation
Stronger convenience
More demanding
More out-of-home consumption
Greater environmental awareness
of products
More experience driven
Price led value
•
Exploring new tastes
•
•
•
•
•
•
•
•
•
Industry 2012
Health and nutrition
Growing importance of
environmental and social factors
Constant innovation
Continuing industry consolidation
The rise of the hard discounters
An even tougher regulatory
environment
Service excellence
Technology and value chain
integration
The role of private equity