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The case for generic advertising in Britain.

The case for generic advertising in Britain

This month more than 200 world tea trade delegates gather at the Grand Hotel, Eastbourne for the first ever U.K. Tea Convention. They will review the world tea trade, take a global view of tea and other drinks marketing, plus an overall view of the U.K. generic marketing; weigh up the European Challenge in respect of tea and catering; discuss tea and health and look at advertising for tea and drinks worldwide. In essence, considering tea's enormous potential particularly in Europe, The Tea Council's Annual Marketing Conference, held last November at the Barbican Conference Centre in London, also considered tea's undoubted potential exclusively in the U.K. This was attended by some 100 members representing the producer countries and the U.K. tea trade.

Real opportunities exist for tea in the 90's in the U.K. We have virtually halted the overall decline in tea consumption, what's more we can regain some of the ground that has been lost to coffee and soft drinks.

In the 80's, we have seen consumers in Britain grow more aware of the need for healthier lifestyles, show more concern about what they are eating and, in the latter part of the 80's, what they are drinking. We are also seeing the involvement of the green consumers who now comprise a large and growing segment of the Britain population. This type of consumer is looking for a product which is natural, has undergone the minimum processing, has not damaged the environment in either growing or processing and has no undesirable effects on health. If a product comes from an area in the developing world then the green consumer likes to feel that it directly benefits that particular part of the world.

Tea is ideally equipped to take advantage of all these opportunities. It is healthy and entirely natural--free from artificial processing, coloring and calories. Tea does not damage the environment in its growing or processing. It is a renewable source, it benefits developing countries since tea is a significant foreign exchange earner.

Solid logic lies behind the argument that tea is ideally poised to be the drink of the '90's offering a myriad of options to the industry. However there is a difference between recognizing the logic of the case for generic tea and taking the necessary action to capitalize on the opportunity. In marketing terms, taking action equals spending money; allocating scarce resourcess against key priorities.

While tea undoubtedly has the potential to be the drink of the 90's, it is currently under-exploited by the industry and undervalued by the retailer and consumer alike--a worrying situation but one that is equally full of exciting potential--the crossroads of opportunity.

In Britain we are asking ourselves, "Will tea remain a cheap drink with a comparatively unfavorable image OR can it become the drink with contemporary consumer values which yield a much higher return to growers, blenders, packers and retailers whilst giving consumers even better value and satisfaction?"

Tea is definitely undervalued. In Britain it accounts for 44 percent of everything we drink, with the exception of tap water--twice the size of the market share of its nearest rival coffee. However, in monetary terms, the tea market in Britain has a retail sales value of 589 million [pounds]--only a 2.5 percent share of the total drinks market in retail sales value terms, or slightly under 11 percent share if we exclude a alcohol's share.

Vox pop reaction to recent tea price increases indicated clearly to the British media that consumers are prepared to pay more for their tea. In fact, one could go further and say that consumers almost expect to pay more for a cup of tea than they do at present, especially when the price of a cup of tea is considered in context with the price of almost any other drink.

In advertising terms, tea is heavily outspent by all its competitors. For example tea with its dominant 44 percent share of the total drinks market, only enjoys a fraction more than an eight percent share of the total drinks advertising spend. By contrast soft drinks spend nearly 15 percent on advertising and coffee, accounting for 21 percent of everything we drink, has a 17.9 percent of the total drinks advertising spend.

No doubt we could at this juncture all pat ourselves on the back and say how wonderfully resilient tea is. Yes, tea is resilient, but just think how much more resilient tea would be if that eight percent marketing spend were increased to say 10 or 12 percent.

An independent analysis of the market by Mintel predicts that if nothing is done within the market as a whole to vary the current mix of price, product and marketing support, the retail sales value of tea at current prices will decline from 589 million [pounds] in 1988 to 493 million [pounds] in 1993--a loss of 16 percent in just five years. In the past retailers have been content to use tea sa a "known-value-item," a "lossleader," a "traffic builder." Today, this is not necessarily so. Retailers have higher overheads to meet and can no longer afford the luxury of "trafficbuilders" as such. Retailers also have a stake in the market through own label, and keep an eye on the profit return on tea versus that of other drinks.

At present the retailer's return on tea, in today's commercial terms, does not compare favorably with the returns on other drinks. The industry needs to work towards a better return for the retailer on tea--by improving tea's image, by product development and by creating the market place conditions for a more dynamic market.

Much has been done in the past 12 months by various companies--the round tea bag; new packaging designs, development of new blends, and new brand advertising campaigns.

However, an important element in this wide ranging approach is a generic campaign, one that can concentrate its message on the natural elements of tea as well as the value for money and distinctiveness of tea. It is time we made the British reappraise tea rather than taking it for granted.

Illtyd Lewis Executive Director, The Tea Council Ltd. London, England
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Title Annotation:marketing of tea
Author:Lewis, Illtyd
Publication:Tea & Coffee Trade Journal
Date:May 1, 1990
Words:1038
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