Organics emerge as shoppers' cup of tea

Tea has emerged as one of the only categories in which organic lines have outperformed the market in the recession.

According to TNS Worldpanel, sales of organic bags were up 20% in the three months to April 19, whereas the total tea market was up 9.1% over the same period. Instant tea and fruit/herbal teas outperformed with sales up 39.3% and 26.5% respectively.

Despite tea prices rising on the back of poor harvests (Unilever has announced 10-15% rises on PG Tips and others are expected to follow), tea was still great value per serving, said Bill Gorman from the British Tea Council. "There was a round of price rises in February on the back of higher auction prices, but it looks like another round is beginning."

Nigel Holland, Tetley regional president for UK and Africa, said costs had to be recouped: "We work hard to absorb cost pressures, but right now we're facing significant rises in our tea purchase costs as a result of bad weather reducing yields and the falling value in sterling because tea is traded in dollars."

Associated British Foods, which owns Twinings, declined to comment on pricing, but said it was increasing production capacity of Twinings Everyday tea with new equipment at its Andover facility.

? See organics feature, p25.