Tea Market Size and Share Analysis - Growth Trends and Forecasts (2023-2028)
Tea market size
Tea market analysis
The tea market size is expected to grow from USD 51.26 billion in 2023 to USD 67.69 billion in 2028, registering a CAGR of 5.72% during the forecast period (2023-2028).
- The health benefits associated with tea consumption and increasing awareness about carbonated beverages are some of the major factors driving the global tea demand. The flavonoids, antioxidants, and phytochemicals in tea help improve various functions of the body.
- Increasing knowledge about the benefits of tea consumption in patients suffering from arthritis, cardiovascular diseases, and hypertension is likely to pave the way for market growth in the coming years. Furthermore, increasing disposable income, changing tastes of people, and introduction of additional healthy ingredients in tea by different market players are other factors driving the market growth.
- The introduction of specialty iced tea is likely to be one of the major trends that will gain traction in the tea market during the forecast period. Vendors are introducing specialty iced teas by customizing different blends. Additionally, the organic label and the popularity of herbal teas are also on the rise due to their increasing popularity. This can be attributed to their health benefits and enhanced benefits of ingredients like basil, tulsi, etc., shifting consumer preference towards products based on natural ingredients.
- For example, in 2021, the German Association of Tea and Herbal Infusions reported a surge in sales of organic premium teas, herbal infusions and fruit infusions, with 15.9% of teas sold carrying an organic label. Additionally, the percentage of organic herbal and fruit infusions increased by 10.4% from 2020 to 2021, reflecting a shift in consumer preferences. This in turn drives the overall tea market globally.
Health benefits of tea are driving market growth
- Tea consumption is primarily driven by consumers looking for new non-alcoholic beverages rather than juices and carbonated drinks. Consumers are developing an affinity for tea as its sachet version offers enhanced convenience, thereby providing a suitable, convenient and healthy alternative to juices and carbonates.
- Market players are launching new healthy tea products that are attracting consumers across the world. Tea provides hydration, instant refreshment and stimulation, benefiting consumer health. The availability of various nutrient-fortified herbal variants in the market with different sizes and flavors is driving its growth. Market players are launching Ayurvedic and herbal teas in the market to attract consumers.
- For example, in June 2022, UK-based Clipper Tea Company expanded its product range in the United States with new packaging and flavors. Newly added flavors include Organic Earl Gray Black Tea, Organic Orange & Turmeric Herbal Tea, Organic Green Tea & Lemon, Organic Winter Apple & Cinnamon Herbal Tea and Organic Winter Berry Herbal Tea.
Asia Pacific has the largest market segment
- The health benefits associated with tea consumption and increasing awareness about the harmful effects of carbonated drinks are important factors increasing the demand for tea in Asia Pacific. Increasing awareness about the benefits of drinking tea for consumers suffering from arthritis, cardiovascular disease, and hypertension is likely to pave the way for future market growth. Black tea remains the most popular bottle, with green tea growing in popularity mainly due to the preferences of health-conscious consumers.
- Generation Z and Millennials are attracted to consumption due to increasing innovations such as different tea flavors. Furthermore, the working population of the region prefers tea for instant energy and hydration during working hours. Due to all these factors, market players are launching healthy and delicious tea products in the market to meet the needs of consumers.
- In November 2022, Netsurf.com launched a series of herbal teas in India. These products are available in different herbal flavors namely Bramhi and cinnamon, ginger and cumin, ashwagandha and lemon etc.
Tea Industry Overview
- The tea market is highly competitive with strong competitors and diversified product portfolios, which has resulted in intense competition among existing players. Key players in the tea market include Associated British Foods plc, RC Bigelow Inc, Apeejay Surrendra Group, Unilever plc, and Tata Consumer Products. Consumers in the market are hungry for new and innovative products to suit their personal lives.
- Companies have been working hard to provide consumers with new and innovative products to meet their needs to capitalize on this trend. Key players are stepping up industry consolidation by leveraging their distribution networks, forming partnerships with local distributors, especially in emerging economies, and developing new products.
