Australia’s tea market is expected to grow at an annual rate of 3.5%. Over the last eight years, Australian tea revenues have grown by more than 56%. Australia’s tea volume was 16.5 million kilograms in 2018. Through 2023, Australia’s tea volume is expected to grow to 18.1 million kilograms. Over the last eight years, Australia’s tea volumes have grown by nearly 27%.
Today, Australia’s tea and coffee industries employ more than 3,375 people at more than 265 companies. The majority of market share is owned by JDE Professional, Nestle, Unilever Australia, and Vittoria Food and Beverage. Other Australian tea growers include Nerada Tea, the Alpine Tea Company, the Northern Rivers Tea Estate, the Daintree Tea Company, and the Two Rivers Green Tea Company. The majority of tea is imported in Australia, as domestic tea production remains relatively small.
Sri Lanka‘s Tea Exports to Australia
Sri Lanka’s tea export to Australia has registered an increasing trend in 2019 compared to 2018. Sri Lanka’s tea exports for last five years are given below:
(Value in US $ million)
Australia’s total tea imports from the world in 2019 were US$ 105.12 million compared to US$ 103.46 million in 2018.
Tea Consumption in Australia
The tea market has evolved dramatically in the past few years in line with consumers’ changing behaviour. Today, tea drinkers are more interested in high-quality products with a great story and drinks that give them specific health benefits, which have driven demand for healthy green, functional botanical tea and herbal blends. In addition, the perception of tea has also changed, as it is viewed by younger consumers as a sensual and wellness drink.
Premium quality is another positive development on the Australian market, as customers are showing strong preferences for functional botanical blends and single estate artisanal teas. More and more people are interested in innovative flavour combinations, as well as in authenticity and the story behind certain brand. When it comes to different types, a recent trend suggests that natural, earthy alternative flavours such as ginger, matcha, turmeric and cumin are in higher demand.
In addition, the tea market has been expanding outside the category of hot beverages with the development of new ready-to-go drinks and iced tea variants. Kombucha, for example, has shown an impressive growth over the past few years from a niche product to a well-established product in the mainstreams supermarkets.
Herbal teas lead tea consumption in terms of retail value growth in 2019. According to trade sources, contemporary and modern flavours such as raspberry, watermelon and mango are popular fruit/herbal tea flavours as they are refreshing and a break from the norm. Cold tea infusions have been launched by Red Seal and Twinings, with the latter outperforming the former due to the fact that Australian tea drinkers are known to prefer brands with heritage.
Another impact of the health and wellness trend on tea drinkers is their increased interest in low caffeine products. Trade sources explain that young tea drinkers who ordinarily drink black or green tea will switch to fruit/herbal tea if looking for decaffeinated options, as they are not too attached to such types of teas.
In 2019 tea drinkers are more selective when choosing what tea to go for as they become more aware of the impact on their health and the environment. On the one hand, there is growing media coverage on the drawbacks of tea bags; mostly related to the materials and processes used to make them. In 2019, supermarkets continue to lower prices of tea. There has been a 10% price decrease in the overall tea category since 2017.
Major Players and Brands in the Australian Market
Unilever Australia lead the market share, however recorded a year-on-year growth decline in market share in 2019, while AB Food & Beverages Australia’s share of tea sales remained stagnant over the same period. Within loose black tea, all the Bushells brand variants presented a share increase due to the exit of competitors, Kinkara and Tynee Tips, from supermarkets.
Madura Tea Estates Australia Pty Ltd is a domestic tea company that highlights its sustainability and local origin to appeal to Australian consumers. The company’s teas are cultivated in northern New South Wales and it is one of only a small number of locally grown tea brands.
Sri Lankan premium tea export brand “Dilmah” has positioned as one of Australasia’s most popular Ceylon tea brands – known widely for its ethical growing, production and business practices. Dilmah has recently launched an organic herbal range across the ditch featuring chamomile, rooibos, fruit and mint and berry infusions to meet the rising demand for hot herbal brews in Australia and New Zealand. Another Sri Lankan brand “IMPRA” also taking inroads in the Australian market and their agent is operating from Melbourne.
Hot tea and iced tea drinkers come from opposite ends of the spectrum
Analysing the different types of Australians that drink hot tea and iced tea is a study in contrasts with the core markets of both drinks representing vastly different demographics, although the over-arching similarity is that more women than men drink both hot tea and iced tea whereas coffee drinking is split evenly between the genders.
The majority of Australians drink at least one cup of coffee in an average week; just under half of them drink tea and only 12% drink hot chocolate. Both hot tea and hot coffee are popular with older Australians and are the leading drinkers of both hot coffee (69.6%) and hot tea (61.1%) in an average week.
In contrast to both hot tea and hot coffee younger Australians are more likely to drink hot chocolate in an average week than their older counterparts although the drink is in a clear third place for all age groups.
The cooler iced varieties are consumed by far fewer Australians than their hot alternatives. Iced coffee is consumed by 1.1 million Australians (5.6%) in an average week while just over 1 million Australians (5%) drink iced tea in an average week.
Consulate General of Sri Lanka
31 March 2020