An empirical case study into the Tea Market

tea leaf is one of the most popular hot beverages in the humanity and the demand is always increasing day by day. Tea is drunk by hundreds of million people around the dry land in every continent and the amount drank everyday is on a colossal scale. The market is ever increasing and on that point are no shortages of tea manufacturers. Today thither are only a handful of tea producers that actually run the market i.e. PG Tips, Typhoo and Yorkshire are predicted to account for 57.9% of the market between them in the UK.

The most successful company out of the few in Britain is Brooke Bond also responsible for the brand PG Tips. Arthur Brooke, the founder of the company, clear his first shop in Manchester in 1869. He demonstrable his own blend of teas which soon became known for their quality - a reputation which spread far and wide and mum holds unbent today. Today the operations have expanded into many continents and still going strong.

There are various new(prenominal) brands to choose from and there are no shortages of substitutes, below is a table of other possible substitutes:

UK Company

Typhoo

Yorkshire

Quick Brew

Brook Bond D

Own label

Others

The tea market is very warring and is relatively elastic, if PG Tips raised their prices 20p more customers would more likely go for a substitute like Typhoo Tea as in theory they would be cheaper.

Table: UK Tea Market tax: Pounds Mn, 1995-1999

Market Value Pounds Mn % Growth US$ Mn

1995 578.8 933.5

1996 588.0 1.6% 948.4

1997 595.0 1.2% 959.7

1998 585.6 -1.6% 944.5

1999 592.1 1.1% 955.0

2000e 593.0 0.2% 956.5

CAGR, 1995-1999: 0.6%

The demand for tea in the UK grew by 1.1% in 1999, to reach a value of Pounds 592.1 million.

The...

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