Summary

Tea, often referred to as the "elixir of life," has held a special place in human culture for centuries. As one of the world's most popular beverages, it has played a significant role in both history and daily life. The tea industry is a global powerhouse, comprising a diverse range of tea varieties, production methods, and cultural significance. The origins of tea can be traced back to ancient China, where legend has it that Emperor Shen Nong discovered tea around 2737 BC when tea leaves blew into a pot of boiling water. Tea quickly gained popularity as a medicinal drink before evolving into a staple in Chinese culture. It later spread to Japan, and by the 8th century AD, it had become an integral part of Japanese culture, including the revered Japanese tea ceremony. In the early 17th century, the British began importing tea from Asia, marking the beginnings of the global tea trade. Tea was a luxury reserved for the upper classes and even became a status symbol in Europe. The British East India Company played a pivotal role in the global expansion of the tea industry, establishing plantations in India and Sri Lanka. Tea production involves a series of precise steps, from cultivation to brewing. Tea is primarily grown in regions with suitable climates and elevations. Factors like soil, temperature, and rainfall all influence the quality of the tea. The tea leaves are carefully hand-plucked to ensure the best quality. Different teas require specific leaf plucking standards, like two leaves and a bud for high-quality teas. After plucking, the leaves are spread out to wither, reducing their moisture content and making them pliable. For black and oolong teas, the leaves are rolled to break the cell walls and release enzymes that trigger oxidation. This step defines the type of tea produced. The leaves are dried to stop oxidation and preserve the desired characteristics. The dried leaves are sorted into various grades and then packaged for distribution. Tea is deeply woven into the cultural fabric of numerous societies. It plays a central role in rituals, ceremonies, and social gatherings, such as the Japanese tea ceremony and British afternoon tea. Also, it is celebrated for its potential health benefits, including antioxidants, polyphenols, and various medicinal properties. It has gained recognition as a beverage that can improve well-being.

According to the research report, “Global Tea Market Overview, 2023-28” published by Bonafide Research, the market is anticipated to cross USD 90 Billion by 2028, increasing from USD 61.50 Billion in 2022. The market is expected to grow with 6.88% CAGR by 2023-28. The tea market size is projected to be fuelled by health and wellness trends. In recent years, there has been a growing interest in health and wellness, and this has driven significant tea market growth. Tea is seen as a healthy beverage option, and many consumers are turning to it as a way to improve their overall health and well-being. Consumers are increasingly interested in teas that offer specific health benefits, such as reducing stress, improving digestion, boosting immunity, and aiding in weight loss. As a result, there has been a rise in functional teas that are formulated with specific ingredients to target these health concerns. Herbal teas have gained popularity due to their perceived health benefits. Many herbal teas are known to have anti-inflammatory and antioxidant properties, and some have been linked to improved sleep and digestion. As more people seek natural remedies for their health concerns, herbal teas have become a go-to option. Moreover, health-conscious consumers are also seeking out teas that are free of artificial additives and preservatives. Organic and natural teas are seen as healthier alternatives to conventional tea products, and this has driven the demand for these types of products. Consumers are willing to pay more for teas that are perceived as high-quality and premium. This includes teas that are organic, fair trade, and sourced from sustainable farms. Premium teas are often marketed as being healthier and more beneficial than cheaper, mass-produced tea products. Tea companies are also capitalizing on health and wellness trends by introducing specialty teas that cater to specific health concerns. For example, some companies offer teas that are specifically designed to boost energy, aid in relaxation, or support mental clarity. Overall, health and wellness trends are driving the market, as more consumers seek tea products that offer specific health benefits and are perceived as healthier as and more natural than other beverage options.

Countries in South America, such as Brazil, Argentina, and others are exhibiting a healthy demand for hot tea. Consumers in the regions are becoming more health conscious and their preference for herbal tea, green tea, and organic tea is also increasing. The increasing prevalence of obesity is a major issue in the region. As consumer awareness is increasing, consumption of green tea is increasing as it helps in weight loss. The market players are launching new campaigns and advertisements to make people aware of the benefits of tea consumption. The prominence of health campaigns coupled with the steady demand for green tea is driving the demand for tea in this region. Demand for herbal tea is also increasing in the region owing to its health benefits and several old age populations in the region. According to World Bank data from 2021, 10% of Brazil's population is of age 65 or older. Additionally, owing to the millennial population in the region, the demand for iced tea is also increasing. New flavours of iced tea like peach, mango, strawberry, and many more are attracting young consumers in the region. Premiumization of tea products is gaining prominence among consumers owing to its functional properties, which in turn is expected to boost the growth of the market. The expansion of food service channels has also facilitated the growth of the tea market in South America. Over the medium term, the market is expected to grow owing to the rising disposable income, more working population, and product innovation. In Brazil, the consumption of tea is increasing owing to its herbal benefits, convenience, and variety. Consumers are willing to pay more for the variety of tea products that are available in the market. Consumers prefer black tea, green tea, herbal tea, and other tea types. The millennials in the country are attracted to the variety of flavors that are present in iced tea beverages. Market players have been innovating new products with different fruit flavors like peach, pear, and many more. Furthermore, a rise in disposable income, changes in taste preferences, and healthy ingredients added to the tea are other factors that fuel the market growth.

Growing acceptance of tea instead of aerated drinks, especially among health conscious consumers is a major factor encouraging the market growth. The low caffeine and high antioxidant content make tea a suitable beverage for consumers of all age. Rising demand for the product is projected to encourage innovation in the market. For instance, recently, Twinings launched its Superblends in seven blends, namely, Sleep, Energise, Glow, Defence, Detox, Matcha, and Turmeric. Tea has a particular place in the hearts of people all around the globe, adored for its affordability and delectable flavor. It is important in the worldwide beverage sector and is grown in certain areas owing to temperature and soil characteristics. Asia's China, India, and Sri Lanka, as well as African countries like Kenya, Malawi, Rwanda, Tanzania, and Uganda, are major tea producers. Other places, such as South America, the Middle East, and Russia, contribute to tea production as well, but in lower amounts. The wide range of teas available gives tremendous potential for growth. Organic tea, green tea, fruit tea, chamomile tea, white tea, and other distinctive mixes are becoming more popular among consumers. Chamomile tea, for example, is brewed from flowers and has a variety of health advantages, including increased sleep, digestive health, blood sugar management, and heart health. Another herbal favourite is peppermint tea, which has a pleasant flavour from dried peppermint leaves. Nestlé S.A. has made a noteworthy step toward sustainability by launching a zero-waste initiative to turn tea trash into beneficial fertilizer. This action helps to prevent resource waste, lowers energy emissions, and decreases total waste. Tea waste is a good fertilizer since it contains vital components such as potassium, nitrogen, and phosphorus. The tea industry has enormous development potential, thanks to exciting new kinds and environmental measures, making it a favourite among consumers worldwide.

Herbal tea's increasing popularity in the global tea market can be attributed to several key factors that reflect changing consumer preferences and a growing awareness of health and wellness. First and foremost, herbal tea is seen as a healthier alternative to traditional caffeinated teas like black or green tea and it's often caffeine-free. As people become more health-conscious, they seek out beverages that offer not only flavour but also potential health benefits. Herbal teas, often infused with a wide array of botanical ingredients, are perceived as natural and nourishing, promoting various wellness benefits such as relaxation, digestion, immune support, and stress reduction. Furthermore, the rise of herbal tea can be linked to the growing demand for a diverse and unique sensory experience. Herbal teas come in a vast array of flavours and aromas, encompassing herbs, spices, fruits, and flowers, allowing consumers to explore different taste profiles and indulge in customized tea experiences. This variety appeals to those seeking novel and enjoyable taste sensations, as well as to individuals looking for alternatives to sugary or artificially flavoured beverages. Additionally, the trend towards plant-based and organic products has propelled herbal tea's growth. Many consumers are increasingly drawn to herbal teas because they are often perceived as more environmentally friendly and sustainable, especially when sourced from organic and ethically cultivated ingredients. This resonates with the broader movement towards conscious consumerism and the desire to make environmentally responsible choices. Furthermore, the global tea market has been influenced by the shift in lifestyle choices. Many people today are looking for moments of tranquillity and relaxation in their busy lives. Herbal teas are often associated with calming and comforting qualities, making them a popular choice for winding down, meditation, or relaxation routines. This aligns with the holistic approach to wellness that many consumers now embrace, as they seek to address not only physical health but also emotional and mental well-being.

The growth of commercial applications in the global tea market can be attributed to several key factors that reflect changing consumer preferences and evolving market dynamics. One of the primary drivers of this growth is the increasing demand for convenience and ready-to-drink tea products. In today's fast-paced world, consumers are often seeking convenient and time-saving solutions for their beverage consumption. Commercially packaged and prepared tea products, such as bottled iced teas and tea concentrates, cater to this need by offering a quick and easily accessible way to enjoy tea on the go. This convenience factor has resonated particularly well with urban populations and individuals with busy lifestyles. Moreover, the expansion of commercial applications is closely linked to the rise of tea as a functional and healthy beverage. Tea, especially herbal and specialty varieties, is known for its potential health benefits, including antioxidants, polyphenols, and other bioactive compounds. As consumers become more health-conscious, they are increasingly drawn to tea for its natural properties that can support well-being. This has led to the development of commercial products that capitalize on the health and wellness trend, such as herbal teas marketed for their specific health benefits or the inclusion of super food ingredients. The global tea market has also seen the integration of innovative technology and packaging solutions, further fuelling commercial growth. Cold brewing technology, for instance, has enabled the production of smoother and less bitter iced teas, appealing to a broader consumer base. Additionally, the use of sustainable and eco-friendly packaging materials and designs has become a crucial selling point, as environmental concerns gain prominence. Brands that emphasize their commitment to sustainability often find favour among eco-conscious consumers. Furthermore, the growing globalization of tea culture and the fusion of traditional and modern elements have played a role in expanding commercial applications. Tea is no longer confined to its country of origin; it has become a global phenomenon with cross-cultural appeal. Tea cafes, specialty tea shops, and unique tea blends that cater to diverse tastes are proliferating. These establishments often serve as platforms for experimentation and innovation in tea preparation and presentation, fostering a commercial environment that is open to new and exciting tea experiences.

Based on the distribution channel, the online distribution channel's rapid growth in the global tea market can be attributed to a combination of technological advancements, changing consumer preferences, and the evolving landscape of the retail industry. One of the primary drivers behind this growth is the increasing prominence of e-commerce and the digitalization of retail. Consumers today are more tech-savvy and comfortable with online shopping, and this trend has been further accelerated by the COVID-19 pandemic, which pushed many consumers to explore online options for their daily needs. The convenience, accessibility, and variety that online platforms offer make them an ideal choice for tea enthusiasts looking for a wide range of tea products from the comfort of their homes. Additionally, the global tea market's shift towards specialty and premium teas has been well-supported by online platforms. E-commerce allows tea connoisseurs to access a vast selection of high-quality teas, including rare and unique blends, from various parts of the world. This ease of access to specialty teas is a major driver of online tea sales, as it caters to the growing demand for unique and authentic tea experiences that may not be readily available in traditional brick-and-mortar stores. Furthermore, online distribution channels have proven to be highly efficient for direct-to-consumer (DTC) brands and small tea producers. These businesses can effectively reach a global customer base without the need for extensive physical storefronts or middlemen. This democratization of the market enables artisanal and niche tea brands to thrive, as they can showcase their products, tell their brand stories, and connect with a global audience through online platforms, which might be cost-prohibitive in a traditional retail setting. Personalization and convenience are other factors contributing to the growth of online tea sales. E-commerce platforms often use algorithms and data analytics to recommend tea products tailored to individual preferences, which enhances the overall shopping experience. Customers can also benefit from subscription services, ensuring a regular supply of their favourite teas, all of which can be easily managed online. The flexibility of online shopping, including the ability to browse reviews, compare prices, and access a wealth of information about different teas, empowers consumers to make informed decisions and discover new tea varieties.

The growth of tea bag packaging in the global tea market can be attributed to several factors that reflect evolving consumer preferences, convenience, and the competitive dynamics of the industry. One of the primary drivers behind this growth is the increasing demand for convenience and ease of use. Tea bags are a practical and mess-free way to enjoy tea, as they eliminate the need for loose tea leaves and additional accessories such as tea infusers. This convenience appeals to a wide range of consumers, including those with busy lifestyles and on-the-go habits, as well as those who may be new to tea consumption and find tea bags a user-friendly introduction to the world of tea. Moreover, tea bags offer consistent portion control, ensuring that each cup of tea is brewed to perfection without the guesswork. This consistency is highly valued by consumers who seek a dependable and repeatable tea-drinking experience, and it's especially important for commercial establishments such as cafes and restaurants where consistency is essential in delivering a quality product to customers. Additionally, the growth of tea bag packaging can be linked to the extensive variety of tea blends and flavours available in this format. Tea bag manufacturers and tea producers have responded to changing consumer preferences by offering an array of options, from traditional black and green teas to herbal and specialty blend. This wide selection allows consumers to explore diverse taste profiles and find teas that suit their individual preferences, whether they are looking for a classic cup of Earl Grey or a unique herbal infusion. The convenience and versatility of tea bags have also made them a popular choice for the burgeoning ready-to-drink (RTD) tea market. Many RTD tea products, such as iced teas and cold brews, are based on the convenience and familiarity of tea bags. These products cater to the fast-paced and on-the-go lifestyle of modern consumers, making them a lucrative segment of the tea market. The growth of tea bag packaging can also be attributed to environmental considerations. Many tea bag manufacturers have responded to consumer demand for eco-friendly options by adopting sustainable and biodegradable materials for their tea bags and packaging. This eco-conscious approach addresses the concerns about single-use plastics and waste, which aligns with the increasing focus on sustainability and responsible consumer choices.

Market Drivers

• Growth in E-Commerce and Online Retail: The rise of e-commerce and online retail has emerged as a significant driver for the global tea market. Consumers are increasingly turning to online platforms to purchase tea products, as it offers convenience, a wide selection of choices, and the ability to compare prices and read reviews. This shift has expanded the reach of tea companies, enabling them to reach a global customer base without the limitations of physical storefronts. Additionally, the direct-to-consumer model and online subscription services have gained traction, allowing tea brands to establish direct relationships with their customers. The ability to provide information, educational content and personalized recommendations online has also enhanced the consumer's tea-buying experience. As more consumers embrace e-commerce, this trend is expected to continue driving the growth of the global tea market, presenting new opportunities for market expansion and customer engagement.

• Health and Wellness Innovations: Health and wellness has been a longstanding driver for the tea market, and this trend continues to evolve as tea companies innovate to meet consumer demands. Beyond traditional health benefits, tea producers are now focusing on creating functional and wellness-oriented tea products. This includes the development of teas fortified with vitamins, minerals, adaptogens, and other natural ingredients with specific health benefits. Furthermore, tea blends designed for relaxation, stress reduction, and improved sleep have gained popularity as consumers seek holistic approaches to well-being. The use of clean labels, organic certifications, and reduced sugar content aligns with health-conscious consumers' preferences. As the pursuit of physical and mental well-being becomes more central in people's lives, the global tea market is poised to benefit from these innovations that cater to a health-conscious consumer base.

Market Challenges

• Regulatory Complexities and Compliance: Different countries and regions have varying rules governing tea quality, safety, and labelling, making it challenging for tea producers to navigate the regulatory environment effectively. Compliance with these regulations is crucial for market access and consumer trust, but it often requires significant resources and expertise. Additionally, as consumer preferences evolve and new tea products are introduced, regulations may need to adapt to address emerging trends. Keeping up with these changes and ensuring that products meet the latest standards can be a demanding task, particularly for smaller tea producers who may lack the resources to invest in compliance.

• Sustainability and Supply Chain Resilience: While sustainability is a trend in the tea market, it also poses a significant challenge, particularly in terms of supply chain resilience. The tea industry relies on sourcing tea leaves from various regions, many of which are vulnerable to climate change and environmental challenges. Ensuring a sustainable supply chain in the face of these threats is a complex task. Climate change, natural disasters, and shifting weather patterns can impact the availability and quality of tea crops. The need to adopt sustainable farming practices and reduce the industry's environmental footprint while maintaining a consistent supply of tea creates a delicate balance. Moreover, supply chain disruptions, as seen during the COVID-19 pandemic, highlight the need for supply chain resilience and adaptability. Tea companies must develop strategies to address these sustainability challenges and build robust supply chains to withstand various environmental and economic pressures.

Market Trends

• Personalized Tea Experiences: Consumers are seeking teas tailored to their individual tastes, preferences, and health goals. This trend is facilitated by the use of technology and data analytics to offer customized recommendations. Tea brands are creating online platforms and apps that allow customers to explore personalized blends based on their flavour preferences and health requirements. Whether it's customizing the level of caffeine, choosing specific ingredients, or even designing unique packaging, the personalization of tea is enhancing customer engagement and loyalty. This trend aligns with the broader trend of customization in the food and beverage industry and is likely to continue evolving as consumers seek unique and tailored tea options.

• Innovation in Tea Packaging: Packaging is no longer just functional; it has become a key element in the marketing and differentiation of tea products. Unique and eco-friendly packaging materials, such as biodegradable and compostable options, are gaining traction as consumers prioritize sustainability. Moreover, packaging designs that tell a story, evoke emotions, or create a memorable experience are increasingly being used to capture consumers' attention. Innovative packaging techniques, like single-serve tea pods and pyramid tea bags for loose-leaf quality, are changing the way consumers interact with tea. The packaging trend goes hand-in-hand with the premium and specialty tea trend, as it emphasizes the value of presentation and aesthetics in the overall tea experience. As consumers continue to seek memorable and sustainable tea moments, packaging innovations will remain a critical aspect of the industry.

Covid-19 Impacts

The COVID-19 pandemic has had a significant impact on the global tea market. While tea is generally considered a staple and a source of comfort for many, the pandemic introduced both challenges and opportunities. At the outset of the crisis, lockdowns, and restrictions disrupted the supply chain, affecting the transportation of tea leaves and causing delays in production. This resulted in short-term supply chain challenges and increased prices for some varieties of tea. However, as consumers adapted to new lifestyles and heightened health concerns, there was a surge in demand for tea, particularly in the form of at-home consumption. People turned to tea as a comforting and immune-boosting beverage, leading to increased sales of packaged tea products. The pandemic also accelerated the already-existing trend of e-commerce and online retail, allowing tea companies to reach consumers directly and mitigate the impact of physical store closures. Health and wellness-focused teas, like those with immune-boosting ingredients, became particularly popular. As the pandemic continues to evolve, the global tea market is likely to remain influenced by changing consumer behaviours and preferences, with health-consciousness and online channels playing an increasingly significant role in shaping the industry's future.

Competitive Landscape

The tea market is highly competitive, with strong competitors and a diversified product portfolio, which leads to intense competition among the existing players. The leading players in the tea market include Tata Consumer Products, Associated British Foods plc, The Hain Celestial Group, Inc., Starbucks Corporation, McLeod Russel India Ltd, Dilmah Ceylon Tea Company PLC, Lipton Teas and Infusions, Gujarat Tea Processors and Packers Limited, Ito En, Ltd., Barry's Tea, Apeejay Surrendra Group, Tim Hortons Inc.,, Wissotzky Tea, Harney & Sons, Organic India Limited, The Republic of Tea, Duncans Industries Ltd, Typhoo Tea Limited, DavidsTea and R.C. Bigelow, Inc. Consumers in the market are craving new and innovative products to accommodate their personal life. Companies are constantly trying to offer consumers new and innovative launches that meet their demands to capitalize on this trend. Key players have intensely embarked on the industry consolidation by leveraging their distribution network, entering partnerships with local distributors, especially in emerging economies, and developing new products. Most companies operating in the market engage in product innovation and R&D. They also focus on innovative advertising and social media campaigns to attract more target consumers. Tata Global Beverages entered into Ready-to-Drink segment with the introduction of green tea based drink, led by Tata Tea in India and Tetley in Canada.

Considered in this report:

• Geography: Global
• Historic year: 2017
• Base year: 2022
• Estimated year: 2023
• Forecast year: 2028

Aspects covered in this report:

• Global Tea market Outlook with its value and forecast along with its segments
• Region-wise Tea market analysis
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

Regions covered in the report

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

By Tea Type:

• Green Tea
• Black Tea
• Oolong Tea
• Herbal Tea
• White Tea
• Others

By Application:

• Residential
• Commercial

By Distribution Channel:

• Supermarkets/ Hypermarkets
• Speciality Stores
• Convenience Stores
• Online

By Packaging Type:

• Paper Boards
• Plastic
• Loose Tea
• Aluminium Tin
• Tea Bags

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience:

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organisations related to the Tea industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.






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