Tea is a hot beverage and is the second most consumed beverage around the globe. It is prepared by infusing boiled brewing leaves of the Camellia sinensis plant and this plant is mostly grown in Northeast India, north Myanmar, Southwest China, and Tibet. Tea is classified into green tea, black tea, oolong tea, and herbal tea.
The global tea market was valued at US$ Mn in terms of revenue in 2020 and is predicted to grow at a CAGR of 5.0% during the forecast period (2021 to 2027).
Health benefits associated with tea consumption is a prime factor propelling the market growth of tea. Tea offers various health benefits, such as its lower risk of cardiovascular disease, diabetes, cancer, and other chronic diseases. Moreover, it has high nutritional value due to its antioxidants and low calories content. Moreover, it is considered an excellent source of antioxidants and alkaloids and also other vitamins such as vitamins like A, D, E, and C. Due to its various health benefits the market of tea is growing exponentially.
Shifting preferences toward flavored tea is expected to augment the market growth of tea. The increasing availability of flavored tea is increasing the consumer base. For instance, in September 2020, Vessl, Inc. has announced the launch of three new flavors of its ready-to-drink bottled tea brand Tea of a Kind. This includes Mango Yerba Mate, Prickly Pear Yerba Mate, and Blackberry Basil Yerba Mate. Thus, the advent of flavored tea is projected to favor the market growth of the tea in the near future.
Asia Pacific region dominated the global tea market in 2020, accounting for 41.06% share in terms of volume, followed by Europe and North America, respectively.
Figure 1. Global Tea Market, Revenue Share (%), By Region, 2020
The availability of substitutes for tea such as coffee is expected to restrict market growth. This is attributed to the changing taste and preferences of consumers as customers in Britain highly prefer coffee over tea. Also, in keeping with today’s fast-paced lifestyle, young people are opting for instant coffee whenever and wherever they wish, along with self-service.
Fluctuating price of raw material due to unpredictable climatic conditions is leading to a gap in supply and demand. This factor is expected to hinder the market growth of the tea over the forecast period.
The growing availability of wide variants in tea is expected to serve major growth opportunities over the forecast period. For instance, Cha Bar a tea lounge in India offers 133 varieties of Indian and international tea, including flavored tea, herbal tea, and fruit tea, to their consumers. Organic tea, green tea, and Ayurveda are also some of the new varieties introduced in their menu. Thus, the advent of wide variants in tea is projected to propel the market growth of tea in the near future.
Increasing penetration of tea cafe and lounge culture especially across the North America region is expected to bring new market opportunities over the forecast period. Also, increasing consumption of tea among Americans is again expected to propel the market growth. According to the Tea Association of the USA Inc. in 2019, Americans consumed over 84 billion servings of tea or more than 3.8 billion gallons. About 84% of all tea consumed was black tea, 15% was green tea, and the small remaining amount was oolong, white and dark tea.
Figure 2. Global Tea Market – Opportunity Analysis
On the basis of type, Black tea dominates the global tea market in 2020 with around 42.31% of market share in terms of revenue, followed by Green tea and Oolong tea, respectively. The Black tea market is valued at US$ 7,371.20 million and is expected to grow at a CAGR of 5.10% between 2021 and 2027.
|Base Year:||2020||Market Size in 2021:||US$ 17,420.30 Mn|
|Historical Data for:||2017 to 2019||Forecast Period:||2021 to 2027|
|Forecast Period 2021 to 2028 CAGR:||5.0%||2027 Value Projection:||US$ 24,691.79 Mn|
Starbucks Corporation, Wissotzky Tea, Associated British Foods, Nestle S.A., Akbar Brothers Ltd., Tata Global Beverages, The Republic of Tea, and DAVIDs Tea
|Restraints & Challenges:||
Figure 3. Global Tea Market, Revenue Share (%), By Type, in 2020
Market Trends/Key Takeaways
Fruit juices with herbal teas is gaining traction in the market. Nowadays, traditional teas are now getting replaced by flavored teas that are caffeine-free and have no-added-sugar. Moreover, the demand for this tea is tremendous because consumers are experimenting with the different varieties and flavors of tea. For example, Pomegranate-Blackcurrant-Blackcurrant Leaf-Peppermint and Peach-Vervain-Lemon are some of the new flavors that are gaining traction in the market.
Organic tea is gaining popularity around the globe due to the growing trend of go natural and organic. Also, the growing demand for low-calorie tea is gaining importance due to increasing health-conscious consumers and they prefer a product that contains health benefits this is supporting the overall market growth of the green tea. Moreover, the growing demand for ice-tea especially across Eastern Europe due to people seeking sugar-rich carbonated beverages is again expected to propel the market growth of the tea over the forecast period.
Global Tea Market - Impact of Coronavirus (Covid-19) Pandemic
The global tea market has experienced some transportation disruptions from the tea producing areas, as well as some consequential disruptions of cash flow. The impact on tea production itself is so far seems limited, however social distancing measures are triggering emergency response from tea producers in the country.
The strict lockdown measures in India, world’s second tea producer, had shut down production of all agricultural industries for a number of weeks in March and April. Recently, tea gardens and small tea growers have been picking up tea production and export again, but the lockdown has impacted tea producers and smallholder livelihoods significantly.
Few Recent Developments
In July 2019, Wissotzky Tea Launched Nana Mint Tea. It has an exotic mint flavor.
Tea is an aromatic beverage derived from Camellia Sinensis plant. It is one of the most consumed beverage in the world. Black tea and green tea are the most popular tea while herbal tea is gaining popularity. Tea is considered a healthy beverage owing to presence of a number of potent antioxidants, and minerals such as potassium, manganese, magnesium, & calcium. Regular consumption of tea helps reduce cell damage caused due to free radicals as well as lowers cholesterol levels and facilitates healthy weight loss.
Tea has been very popular in the emerging market, owing to prevalence of tea culture. Furthermore, rising health consciousness and disposable income has aided the tea market's expansion. Other factors driving the market's growth include the introduction of additional beneficial components in tea by various industry competitors.
The primary restraints for this market are a rise in the trend of coffee consumption and changing raw material prices induced by unexpected weather circumstances. On the contrary, the tea market is expected to grow as demand for herbal tea increases and new flavors and varieties of tea are introduced.
Asia pacific region is anticipated to grow enormously in the market on account of increasing tea culture and rising demand of tea from millennial. The robust economic growth in the country has also created a large consumer base among middle-class groups with a preference for premium tea blends. The consumers are frequently enhancing their purchases from unpackaged tea to packed and bagged specialty varieties. India is expected to grow with the highest CAGR throughout the forecast period, owing to the prevalence of tea culture.
Key features of the study:
“*” marked represents similar segmentation in other categories in the respective section.