Tea Market Projected to Grow at 5.3% CAGR, Crossing USD 117.8 Billion by 2033, Reports Marketresearch.biz

Source: Yahoo! finance.

According to Marketresearch.biz, the tea market is witnessing significant growth driven by the rise in ready-to-drink (RTD) teas. The convenience offered by brands like Lipton and Snapple in this segment aligns with the fast-paced lifestyle of modern consumers.

New York, Feb. 20, 2024 (GLOBE NEWSWIRE) — The Global Tea Market, valued at USD 71.2 billion in 2023 and anticipated to reach USD 117.8 billion by 2033 with a 5.3% CAGR, experiences surging demand driven by evolving flavor preferences and changing customer choices.

Defined as a beverage infused with dried leaves from the Camellia sinensis plant, grown in various regions globally, tea has deep roots in traditional growing areas like China, India, Japan, and Sri Lanka. New players in tea production, including Bangladesh, Kenya, and Vietnam, have emerged.

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The flavor nuances are influenced by factors such as soil type, plant variety, altitude, and age of the tea plant, with specific regions gaining recognition for certain tea types—like Japan for green tea, China for white and pu-erh, and Sri Lanka for black tea. China leads as the largest global tea producer, followed by India and Kenya. In 2023, China alone produced 68% of the world’s tea, contributing significantly to Sri Lanka’s GDP and reinforcing its tea leadership.

Shifting customer preferences, driven by health consciousness, propels the market forward, with tea offering diverse health benefits such as cholesterol reduction, promoting peaceful sleep, reducing depression risks, enhancing focus, and lowering hyperglycemia risk. As consumers increasingly turn to tea as a daily beverage, its multifaceted health advantages will drive market expansion during the forecast period.

Key Takeaways

  • Green tea holds a strong position in this market segment due to its growing health-conscious consumer base, antioxidant properties, and health benefits.
  • Paperboards lead the packaging market segment due to their eco-friendly nature, recycling, and biodegradability.
  • Residential segment dominates the application market due to the widespread consumption of tea in households across the globe, driven by its role as a staple beverage in many cultures.
  • Supermarkets/ hypermarkets rule the distribution market segment due to their wide reach, variety of choices, and convenience, offering consumers a one-stop solution for their tea-purchasing needs.
  • Asia Pacific commands a substantial 37% share of the global tea market.

Driving Factors

Rise in ready to drinks augments the tea market growth.

The Ready-to-Drink (RTD) tea segment, marked by its convenience, caters to the fast-paced lifestyle of modern consumers. Brands like Lipton and Snapple have adeptly capitalized on this segment’s growth rate, illustrating the market’s adaptation to evolving consumer preferences. The RTD tea’s rise is indicative of a broader trend where convenience, without compromising on quality, is paramount.

Health and wellness drive market expansion.

This growing health consciousness has magnified the appeal of tea, particularly green tea, which is renowned for its high antioxidant content. A study revealed that individuals who consume three or more cups of tea daily have a 21% reduced stroke risk compared to those who drink less than one cup. The perception of tea as a healthful, natural beverage is central to its market expansion, resonating with consumers’ increasing pursuit of healthier lifestyles.

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Restraining Factors

A change in customer preference hinders the black tea market.

There has been an impressive decline in the market for black tea of the traditional variety, a category that has traditionally been the dominant segment of the market. Consumers are increasingly gravitating toward alternative tea varieties such as green tea and herbal infusions, driven by health consciousness and diverse taste preferences. This shift in consumer preference poses a significant challenge to producers and marketers of traditional black tea, necessitating adaptations in product offerings and marketing strategies to align with the evolving tastes and health trends of consumers.

Growth Opportunities

A new innovation related to tea-based culinary is the new face of cafes and restaurants.

This trend involves the creative incorporation of tea into various culinary formats, such as tea pairings, tea-infused cocktails and mocktails, tea-flavored dishes, and tea smoothies. This approach allows tea’s diverse flavors to be explored in innovative and appealing ways, enhancing its appeal beyond traditional consumption. For instance, Starbucks’ inclusion of tea lattes and tea-based refreshers showcases the potential of tea-based menu items. The challenge for the industry lies in broadening tea’s appeal and availability beyond specialist tea shops to mainstream dining and café environments.

Report Attribute Details
Market Value (2023) US$ 71.2 Billion
Market Size (2033) US$ 117.8 Billion
CAGR (from 2024 to 2033) 5.3% from 2024 to 2033
Asia Pacific Region Revenue Share 37%
Historic Period 2016 to 2023
Base Year 2023
Forecast Year 2024 to 2033

Regional Analysis

Asia Pacific commands a substantial 37% share of the global tea market, led by tea-rich countries like China, India, and Sri Lanka. Favorable climatic conditions, a deep-rooted tea culture, and a rising trend of premiumization and health consciousness contribute to the region’s dominance. Europe’s market, though smaller, emphasizes specialty and premium teas, driven by health awareness and the popularity of organic products. In North America, a shift from traditional coffee to tea is underway, fueled by health benefits, with a notable rise in iced and ready-to-drink tea products reflecting changing consumption habits and diversification in the market.

Segment Analysis

By type analysis, green tea holds a strong position in the market segment due to its growing health-conscious consumer base, antioxidant properties, and health benefits, including weight loss support and a reduced risk of heart disease. Black tea remains popular for its robust flavor and cultural significance in many regions, while oolong tea is appreciated by tea connoisseurs for its unique taste. Fruit and herbal teas have gained popularity due to their variety of flavors and perceived health benefits.

By packaging analysis, paperboards lead the market segment due to their eco-friendly nature, recyclable nature, and biodegradability. Moreover, paperboards offer versatility in design, aiding brands in marketing and distinguishing their products on retail shelves. Tea bags, which are convenient and easy to use, have a significant market presence, particularly in Western countries. However, the environmental concerns associated with plastic and the move towards sustainable packaging underscore the leading position of paperboard packaging in the tea market.

By application analysis, the residential segment dominates the market due to its widespread consumption of tea in households across the globe, driven by its role as a staple beverage in many cultures. The commercial sector, which includes cafes, restaurants, and hotels, also significantly consumes tea, often offering specialized selections to cater to diverse consumer preferences. Despite this, the ingrained habit of tea consumption in residential settings, coupled with its role in daily life, underscores the dominance of the residential application segment.

By distribution analysis, supermarkets, and hypermarkets rule the market segment due to their wide reach, variety of choices, and convenience, offering consumers a one-stop solution for their tea purchasing needs. These retail giants cater to a broad consumer base, providing an extensive range of tea products, from premium to budget-friendly options. The comprehensive range and accessibility provided by supermarkets and hypermarkets solidify their status as the most significant distribution channel in the tea market.

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Segments covered in this report

By Type

  • Green Tea
  • Black Tea
  • Oolong Tea
  • Fruit/Herbal Tea
  • Others

By Packaging

  • Paperboards
  • Plastic Containers
  • Loose Tea
  • Aluminium Tins
  • Tea Bags

By Application

  • Residential
  • Commercial

By Distribution Channel

  • Supermarkets/ Hypermarkets
  • Specialty Stores
  • Convenience Stores
  • Online Stores
  • Others

By Geography

  • North America
  • Europe
  • Asia-Pacific
  • Latin America
  • Middle East & Africa

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Competitive Landscape Analysis

In the dynamic tea market, major players contribute distinct strengths and strategies. Twinings, with a rich British heritage, excels in classic and flavored teas, epitomizing quality and tradition on a global scale. Tetley, part of Tata Global Beverages, stands out for innovation, introducing round tea bags and drawstring variants, solidifying its dominant global presence. Harney & Sons in the USA caters to a premium niche with high-quality loose teas and unique blends, emphasizing craftsmanship and luxury packaging, setting them apart in the upscale tea segment. Each company’s approach adds diversity and value to the evolving tea industry.

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