Apr 26, 2013 11:38 BST Health benefits helping to drive the Australian tea market The Australian tea market achieved 4% off-trade value growth through 2012, helping the category to record an industry value of A$377 million. Increased health benefits, more variety and new twists on an ancient tradition has seen the popularity of tea gather steam in Australia. Research has shown tea has many health benefits, from lowering blood sugar and cholesterol to reducing the risk of heart disease. Yet for the last four decades Australians have chosen coffee over tea, which is the second-most popular beverage in the world after water. Chai (chai latte or masala chai), widely perceived as the "tea drinker's coffee", is currently undergoing significant success both through on- and off-trade. In general, consumers associate it with less caffeine than coffee, and as a better value-for-money proposition through off-trade for a non-coffee drinker than tea. Consumers often resent paying a higher price for a cup of hot water and a tea bag. Chai is also seen as healthier than sugar-saturated hot chocolate, as it is often sweetened with honey, which is renowned for its antioxidant and antibacterial properties. In terms of its own health properties, components of chai, such as black tea, ginger, cloves and cinnamon, all have their own recognised health and wellness credentials. Despite premiumisation characterising the category, average unit prices only rose 3% to A$28.16 per kilogram through off-trade in 2012. This seemingly low average unit price is a result of the 71% share of off-trade total volume held by black standard tea in 2012, as the format is considerably cheaper than any black specialty tea, green tea, fruit/herbal tea or even instant tea alternatives. Health and wellness is a trend that continues to dominate tea product claims, with perceived health benefits heavily influencing consumer purchasing decisions. Teas marketed in Australia with health claims are closely regulated by Food Standards Australia and New Zealand, with most claims requiring independent scientific research. With media coverage promoting widespread acceptance of the health benefits of tea, Australians are demanding more from tea than simply being healthy and most manufacturers are using flavour profiles to create a unique offering. Unilever, primarily present within tea through the Lipton and Bushells brands, led tea in 2012 with a 31% off-trade value share. Despite gaining in actual sales terms, Unilever's value share slipped one percentage point from 2011, as the instant tea category expanded beyond Lipton Chai Latte and Bushells, resulting in the company's off-trade value share dropping from 66% in 2011 to 58% in 2012 within instant tea despite gains in actual sales terms. Second place in the Australian tea category was retained by AB Food & Beverages Australia, the local wholly-owned subsidiary of Associated British Foods. AB Food & Beverages Australia is present in the market through the Twinings brand across black, green and fruit/herbal tea and the Jarrah Chai Latte brand in instant tea. The company has maintained its off-trade value share of over 20% since 2008, reaching 22% in 2012. For more information on the Australian tea market, see the latest research: Australian Tea Market Follow us on Twitter @CandMResearch Companiesandmarkets.com issues news updates and report summaries covering all major industries and sectors. The service provides additional client monitoring and timely alerts to breaking industry and sector news leading the day's business headlines. News articles, written by our staff, contain additional analyst insight, providing value added insight for our readers. News updates and real-time alerts on newly-released market reports are also available from our Facebook page, Twitter feed @CandMResearch and RSS links. We also welcome inquiries from business journalists and the news media. Contacts CompaniesandMarkets Press Contact [email protected].