The global tea market is estimated to be valued at USD 21.43 Bn in 2024 and is expected to reach USD 32.44 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 6.1% from 2024 to 2031.
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Rising awareness about the health benefits of tea consumption is driving the market growth. Some of the major health benefits of tea include improved heart health, bone strength, mental alertness, and weight management. Increasing disposable incomes in developing regions is also supporting the growing preference for specialty teas.
Market Driver - Health benefits of tea
Tea is considered one of the healthiest beverages around the world. Research has shown that tea contains various antioxidants that have wide ranging health benefits. Green tea in particular has gained prominence in recent years due to claims that it can boost metabolism and help in weight loss. The antioxidant EGCG present in green tea is said to play a role in protecting cells from damage. There have also been studies showing green tea may help reduce risk of heart diseases and certain types of cancer. Oolong tea is also receiving attention for its anti-inflammatory and cholesterol lowering properties. Black tea is reported to improve bone health while white tea finds mention for its antiviral activities.
Health-conscious consumers are increasingly drawn towards tea as it is not just as a refreshing drink but a beverage that can potentially have positive impact on their overall wellbeing. Various medical research on tea and its health benefits have contributed to tea gaining respectability as a superfood. This has motivated people to include more tea in their daily diets. The availability of different types of teas alongside growing promotion of their individual health traits have augmented the interest in regularly consuming tea. Multiple studies validating tea's advantage for conditions like heart health, brain function, and weight management have strengthened consumer confidence in opting for tea as a lifestyle choice. With rising health awareness, tea has emerged as a globally popular beverage that people feel comfortable about consuming multiple times daily or weekly without worrying about negative effects on their health.
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Increasing demand for premium/specialty teas
The steady growth seen in overall tea consumption has fueled a parallel rise in demand for more premium varieties of this beverage. While regular black and green teas still have their dedicated consumer base, people are now willing to experiment and pay more for specialized types of teas that impart unique flavors or come from selective sources. For instance, white and oolong teas from specific farming regions are gaining patrons who seek differentiated drinking experiences. Similarly, exotic infusions made from fruits or spices are popular amongst those wanting to incorporate new flavors in their lifestyles. Specialty blends incorporating ingredients like turmeric, ginger, or holy basil are another premium segment making space in the market.
On the supply side, numerous small tea producers/importers have emerged who deal only in premium loose-leaf teas to tap into this niche. Tea boutiques and cafes curating exclusive varieties have also proliferated to introduce diverse offerings to customers. Enhanced online visibility through e-commerce has exposed global buyers to small tea growers across countries. Festivals, tastings, and education events held by tea importers are sparking interest in nuanced tea styles. Influencers in wellness and gourmet space have contributed in raising the profile of artisanal teas. The luxury element attached to rare processed or single estate teas is a strong pull for affluent patrons. With emphasis on quality over quantity, specialized niche teas now constitute a bigger share of total tea revenue than before.
Key Takeaways from Analyst:
Some of the key drivers for the market include an increasing focus on health and wellness among consumers globally. Tea is seen as a healthier beverage compared to carbonated drinks or coffee by many. Another major driver is the rising popularity of specialty teas like herbal tea, green tea, oolong tea etc. due to their perceived additional health benefits.
Availability of cheaper substitutes like coffee in some regions remains a challenge. Price sensitivity in developing markets of Asia and Africa is also a restraint. Volatility in commodity prices can impact input costs for tea producers. Weather conditions and crop diseases also pose a threat to steady supply of quality tea leaves.
The North America region, dominates the global tea production as well as consumption. However, Asia Pacific is expected to emerge as the fastest growing market due to growing awareness about benefits of tea and new product launches with varied flavors. Companies are also focusing on tea-based ready-to-drink beverages and foods to tap new customers as well as increase consumption moments.
Challenge: Price Fluctuations of Tea Crops
The global tea market has been facing significant price fluctuations in tea crops over the past few years. Being an agricultural commodity, tea prices are highly dependent on various factors such as weather conditions, availability of arable land, labor costs, etc. Unfavorable weather often leads to poor crop yields, creating an imbalance between supply and demand. This results in substantial increase in tea prices globally. For example, due to drought conditions in key tea growing regions of Kenya and Indonesia in 2020, world tea prices rose over 15% within a few months. Similarly, labor shortages in Sri Lanka and higher transportation costs post pandemic disrupted supplies. Such volatility in input costs creates uncertainty for tea producers and impacts their profit margins. It also makes demand forecasting and strategic planning very challenging for tea retailers and brand owners. Price swings discourage new investments and innovation in the tea sector. To ensure long term sustainable growth, measures need to be taken to minimally mitigate external risks affecting tea crop prices.
Opportunity: Emerging Markets like Asia Pacific & Middle East
The global tea market is witnessing impressive growth opportunities in the emerging markets of Asia Pacific and Middle East regions. In the Asia Pacific region, countries like China, India, and Vietnam have a deep-rooted tea culture and collectively represent over 50% of global tea consumption. However, per capita consumption in these countries is still lower than developed Western nations. With rising incomes, urbanization and evolving lifestyles, tea demand in Asia Pacific is projected to grow at over 5% annually in the coming years. Similarly, the Middle East market led by Gulf countries is at a nascent stage and offers immense headroom for growth. Factors such as surging expat population, adaptation of western food habits, and health awareness are fueling higher tea intake. Leveraging the demographics and economic growth trends, tea manufacturers have scope to capture additional market share in these emerging territories through customized products, innovative packaging and intensive marketing initiatives. This can substantially boost global tea market revenues in the long run.
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Insights by Tea Type: Growing Preference for Health Benefits Drives Black Tea Consumption
In terms of tea type, black tea is expected to contribute 38.7% share of the market in 2024, owing to its various health benefits attracting consumers globally. Black tea contains antioxidants called polyphenols that protects cells from damage and reduces the risk of chronic diseases. The high levels of flavonoids and other antioxidants in black tea are known to improve cardiovascular health by lowering blood pressure and cholesterol levels, thereby decreasing the risk of heart attacks and strokes. The presence of theaflavins and thearubigins in black tea also provides anti-inflammatory and anti-carcinogenic properties protecting against cancers. Additionally, black tea is a rich source of vitamin C, vitamin K, manganese, and other nutrients. The growing health consciousness and disease preventive lifestyle among populations is increasing the consumption of black tea for its immunity boosting and longevity enhancing properties.
Insights by Tea Form: Variety and Experience Drives Loose Leaf Tea Consumption
In terms of tea form, loose leaf tea is expected to contribute 44.5% share of the market in 2024, owing to consumer's growing preference for variety and superior experience. Loose leaf tea offers a diverse assortment of flavors, grades, regions and cultivars providing connoisseurs with numerous options to choose from according to individual taste and mood. The leaves maintain their essential oils allowing for distinctive aromatic infusion and rich flavor profile compared to other forms. Prizing loose leaves also provides a satisfying ritual and experience for tea drinkers as it allows controlling infusion time, water temperature and leaf quantity for a perfectly balanced cup. Increasing exposure to varietal loose-leaf styles adopted by specialty tea houses and cafes is elevating consumer willingness to try new fermented, roasted and blended styles over regular tea bag offerings. The pursuit of quality and immersive tea culture drives the popularity and higher sales of loose-leaf tea globally.
Insights by Distribution Channel: Dominance of Large Retailers in Online and Offline Channels
In terms of distribution channel, supermarkets/hypermarkets is expected to contribute 48.6% share of the market in 2024, owing to their wide global reach and dominance as a one-stop shopping destination. Large retailers command an extensive supply chain network allowing comprehensive assortments of popular national and international tea brands under one roof. Their massive store sizes and inventory capacities also ensure optimum economies of scale in procurement. Furthermore, the proliferation of private label and store brand tea products developed by such retailers offers good quality options at competitive prices attracting price-sensitive buyers. Apart from in-store purchases, leading supermarket chains augment sales through their online platforms becoming a preferred shopping portal for home delivery of bulk tea orders globally. Their investment in robust Omni-channel strategies is effectively leveraging the synergies between physical and digital channels to boost volumes catering to a multi-generational customer base.
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The global tea market is a dynamic and multifaceted industry, with distinct regional landscapes and consumption patterns. North America holds the dominant position in the market, and it is expected to account for 38.3% of the market share in 2024. The Asia Pacific region is emerging as the fastest-growing region. North America's dominance in the tea market can be attributed to several factors. The region has a strong culture of tea consumption, driven by a growing health-conscious consumer base that appreciates the beverage's health benefits and diverse flavor profiles. The rise of specialty tea shops, premium tea brands, and the increasing popularity of innovative tea-based beverages, such as iced tea and tea-infused cocktails, have all contributed to the region's leading position. Additionally, the presence of major players, such as Teavana (a Starbucks subsidiary) and Tetley USA, has further solidified North America's stronghold in the global tea market.
In contrast, the Asia Pacific region is experiencing the fastest growth, driven by the region's deep-rooted tea traditions and the rapid economic development of countries like China and India. As disposable incomes rise and consumer preferences evolve, the demand for premium, high-quality teas, as well as innovative tea-based products, is surging in the Asia Pacific region. Factors such as the growing popularity of specialty tea houses, the increasing exposure to global tea trends, and the exploration of unique regional tea varieties have all contributed to the region's impressive growth trajectory. Countries like China, Japan, and India are at the forefront of this expansion, with their rich tea heritage and the emergence of a new generation of tea enthusiasts.
Tea Market Report Coverage
Report Coverage | Details | ||
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Base Year: | 2023 | Market Size in 2024: | US$ 21.43 Bn |
Historical Data for: | 2019 To 2023 | Forecast Period: | 2024 To 2031 |
Forecast Period 2024 to 2031 CAGR: | 6.1% | 2031 Value Projection: | US$ 32.44 Bn |
Geographies covered: |
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Companies covered: |
Unilever, Starbucks Corporation, Wissotzky Tea, Associated British Foods, Nestle S.A., Akbar Brothers Ltd., The Republic of Tea, DAVIDs Tea, Associated British Foods, Tata Consumer Products Limited, The Republic of Tea, Assam Company India Ltd., LIPTON Teas and Infusion, Caraway Tea, Harris Tea Company, Mainak Tea, Sugandh group, Halmari Tea Estate, Micro Mind, and Silver Roots |
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Growth Drivers: |
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Restraints & Challenges: |
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*Definition: The global tea market includes all tea products that are manufactured, packaged, and sold across the world. It comprises products like black tea, green tea, oolong tea, and herbal tea. The tea market is growing steadily as demand rises in developing regions and new healthy beverage trends emerge. Key players in the global tea market focus on expanding their international reach, investing in sustainable sourcing and promoting various health benefits of tea to tap into new customer segments globally.
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About Author
Sakshi Suryawanshi
Sakshi Suryawanshi is a Research Consultant with 6 years of extensive experience in market research and consulting. She is proficient in market estimation, competitive analysis, and patent analysis. Sakshi excels in identifying market trends and evaluating competitive landscapes to provide actionable insights that drive strategic decision-making. Her expertise helps businesses navigate complex market dynamics and achieve their objectives effectively.
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