THE COLOMBIAN TEA MARKET Colombia had traditionally been a coffee producer. Coffee was at the top of the countrys most-consumed hot drink category, and tea was at the bottom. Despite this fact, in 2019, tea consumption had a higher annual growth rate than coffee (see Exhibit 2). Specifically, fruit tea had a 20.1 per cent compound annual growth rate (CAGR), contributing to this categorys dynamic nature. The trend toward natural nutrition sources and the search for well-being significantly increased the consumption of black tea, herbal teas, and fruit teas in Colombia. 2 In 2018, the Food and Agriculture Organization (FAO) of the United Nations expected the global tea market to grow by an average annual rate of 5 per cent and was projected to reach US$21,330 million by 2024. Emerging economies contributed the most to this growth.3 Tea consumption in Colombia reached only 0.018 kilograms (kg) per capita per year, continuing to be low compared to that of traditional tea-consuming countries such as the United Kingdom (1.94 kg/year), Russia (1.38 kg/year), and Japan (0.97 kg/year).4 According to a Nielsen study contracted by the company, Hind had consolidated its leadership in the tea category with a 45.8 per cent market share as of the end of 2019; the remainder of the market was divided among different players, none of whom achieved participation greater than 11 per cent (see Exhibit 3). The consumption of herbal teas was a long-standing tradition for Colombians, who attributed medicinal properties to them. They prepared these simplyby obtaining the herbs or leaves and adding hot water. In the 1990s, offering consumers ready-to-drink (RTD) herbal teas in bags was an original concept since such packaging made the teas easier to consume both inside and outside of the home. In the herbal tea category, in 2019, Hind consolidated a 40.3 per cent market share; the next-closest competitor achieved only a 17.4 per cent share (see Exhibit 4).

Question1: (a) Analyze the tea market in Colombia (5 marks) providing key highlights.