There is an opportunity for tea brands to improve market share from other non-alcoholic beverages if they implement the right strategy.
Regardless of the effects of the pandemic, demand for tea surpassed demand for all non-alcoholic beverages. While all age groups contributed to the demand of tea; Gen Zers as a growing target demographic seem to be lagging behind. Tea brands in Kenya like Kenya Tea Packagers (KETEPA), Kericho Gold and John Finlay Kenya (JFK) among others need to pay keen attention to this demographic and work towards leveraging this consumer segment.
Demand for non-alcoholic beverages remained high during the pandemic
Over the past two years, consumers habits have changed in response to the pandemic. For tea brands the question is how have these changes impacted their category? Kasi retail category demand index, a measure of consumer demand for retail category provides insights on how consumer habits impacted demand for tea. The index ranges from + 0.25 to -0.25. An index level close to 0.25 means demand is high as more consumers are looking to purchase while an index level close to -0.25 means demand is low. This measure is an effective tool for demand planning.
In the beginning of the pandemic, demand for tea was at 0.183 which was higher than that of milk (0.179) and coffee (0.137). The average demand for tea during the two-year period was 0.20 which was quite high given the circumstances. It is also worth noting that, non-alcoholic beverages were deemed as a healthy product during the pandemic which explains why their demand remained unwavered. Generally, demand for coffee is slightly lower than that of tea. There’s a ready tea market in Kenya, brands need to take advantage of this and increase their market share.
Baby Boomers and Gen Xers drive demand for tea and milk
When it comes to tea demand, Baby Boomers lead at 0.225 followed by Gen Xers at 0.210, Millennials at 0.197 and Gen Zers lag behind at 0.181.
Interestingly, Baby Boomers still lead when it comes to coffee demand at 0.182, followed by Millennials at 0.159, Gen Xers at 0.149 and Gen Zers at 0.141.The fear of the pandemic made Baby Boomers to be more health conscious, as they were at risk of contracting the virus easily. All through the period, Gen Zers are the ones lagging. This means that there is opportunity for brands to leverage this consumer segment.
To leverage the younger consumer segment, tea brands should look into their distribution channels
Currently, Gen Zers and Millennials contribute to slightly more than 60% of the Kenyan population. This highlights the fact that they are the largest demographic for tea consumption. Hence, it is wise for tea brands to take advantage and leverage this market in order to improve market share.
To tap into this young demographic of consumers, tea brands need to look into their channels (delivery) that would ensure they get into this market. In an era where social media and e-commerce are gaining popularity in this segment, brands need to be flexible enough so that they may be in sync.
Different trends, however, were seen during the pandemic. In-store shopping was preferred by this consumer segment. Will this trend continue moving into mid 2022?
Distribution of tea should be centred around specialist stores as 72% of Gen Z and 53% of Millennials purchase items through this channel. Only 8% of both these age groups are using online retailers to purchase products, therefore, even with the growth of e-commerce tea brands should still consider specialist stores as a primary distribution channel.
There is an opportunity for tea brands to improve market share from other non-alcoholic beverages if they implement the right strategy.
Our data intelligence platform can help you track these trends in consumer behaviors in Africa over time. This provides you with valuable insights that can help you or your business make fast data-driven decisions.
Contact our team today to explore how our consumer intelligence can empower your decision-making process. Win with confidence with Kasi insights https://www.kasiinsight.com/thehubhttps://www.kasiinsight.com/thehub
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