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Summary of our market study
The global tea market has been witnessing significant growth and diversification. In 2020, the United States saw a robust increase in tea imports, with black tea imports rising by over 9% from the previous year. American households continued to embrace tea, with 85 billion servings consumed, and ready-to-drink (RTD) teas maintaining a growth trend of 3-5%. Notably, Lipton Pure Leaf emerged as the top-selling RTD tea brand in the US, with sales surpassing $900 million. The pandemic spurred an uptick in health-consciousness, further elevating tea's desirability due to its immune-boosting capabilities. In 2021, the US tea industry was recovering swiftly from COVID-19, with an expected annual growth rate of 1-3%.
Despite a trade deficit in tea, the US exported tea worth $89.5 million, ranking among the top 15 global exporters. Global tea cultivation areas expanded as well, with countries like China, India, Sri Lanka, and Kenya leading production and experiencing growing demand for sustainably produced teas. The international tea trade faced challenges such as supply chain disruptions and political influences on pesticide regulation, but opportunities for harmonized standards and reduced tariffs presented avenues for market improvement. The tea offer remained varied, from traditional black teas to specialty varieties, reflecting consumers' evolving tastes and the shifting landscape of the tea industry.
U.S. Tea Market: Exploring Emerging Trends and Consumer Preferences
The tea market in the United States has shown remarkable resilience and growth, becoming an integral part of the beverage industry. With the increasing popularity of tea as a natural, healthy, and refreshing choice, the market is expected to burgeon with a projected value of around $16 to $17 billion by 2025. U.S. consumers are embracing a variety of teas, with black tea claiming a substantial portion of consumption, representing between 80% and 85% of tea intake, followed by green tea at around 10% to 20%. Recent dynamics in the tea industry highlight the rapid expansion of global tea cultivation areas, suggesting that tea's role in modern nutrition and global trade is becoming more pronounced. Traditional tea-producing countries such as China, India, and Kenya, alongside newer cultivators, have significantly increased their tea acreage, responding to a global upsurge in demand. This rise reflects not only an appetite for a refreshing beverage but also a greater consumer consciousness towards health benefits and sustainable, ethically-sourced products. The tea market in the U.S. spans various segments and product types, including Ready-to-Drink (RTD) teas, iced teas, and specialty teas.
Meanwhile, iced tea commands a striking majority of the market, with a share of approximately 70% to 80%, and the sector of tea bags, herbal, and loose teas continues to capture consumers' attention. Importantly, the consumption patterns in the U.S. reveal that nearly 80% of American households enjoy tea, which translates to over 159 million daily tea drinkers. Annually, Americans indulge in around 85 billion servings of tea. Diving into demographics, surveys indicate that millennial and older generations consume tea at nearly equal levels, with between 80% and 85% for millennials and close to 80% to 85% for older generations. These figures debunk the stereotype that tea is exclusively favored by a particular age group or gender — in fact, around 85% of women and nearly 80% of men have reported consuming tea. Moreover, the market has adapted to emerging trends, with a growth in demand for specialty flavors and higher quality products. Small family-owned businesses are increasingly valued for their emphasis on product excellence, while larger brands dominate the RTD tea segment, with Lipton Pure Leaf topping the sales charts.
Key Players Shaping the Global Tea Landscape
As the global tea market continues to flourish, several key players are at the forefront, defining the direction in which the industry moves and evolves. These influential entities span from household brands to premium tea purveyors, each carving out a unique niche through strategic innovation, market adaptation, and customer loyalty.
- Unilever and Lipton Partnership - The Mass Market Maestros: Unilever, through its partnership with PepsiCo in Pepsi Lipton International, has firmly planted Lipton as one of the most widely recognized tea brands across the globe. Lipton's extensive reach into the tea market can be attributed to its diverse offerings, from traditional tea bags to Ready-to-Drink (RTD) variants under the Lipton Pure Leaf line. The brand caters to everyday tea consumers, emphasizing its presence in supermarkets and convenience stores, ensuring availability and affordability.
- Nestea - The Refreshing Contender: As part of Nestlé and previously part of a joint venture with Coca-Cola, Nestea has a significant imprint on the iced tea segment. The brand is known for its crisp and cool flavor profiles, appealing to customers who desire a light and refreshing tea beverage. Nestea's RTD offerings compete head-on with Lipton in the iced tea market, each vying for consumer favor through taste innovation and marketing prowess.
- Sir Thomas Lipton Legacy - The Pioneer Spirit: The brand that traces its origins to the entrepreneurial spirit of Sir Thomas Lipton epitomizes the evolution of tea from a luxury commodity to an everyday essential. Present under the umbrella of Unilever, the Lipton brand has successfully transitioned through the ages while honoring its roots, by offering a vast selection of tea products that reflect traditional tastes and contemporary preferences.
- Artisanal and Specialty Tea Producers - The Craft and Heritage Stewards: This broad category consists of smaller family-run farms and specialty tea companies that distinguish themselves through handcrafted teas and attention to detail. These players, often less visible in conventional retail outlets, cater to connoisseurs and those consumers who seek out unique tea experiences, organic cultivation, and ethical sourcing practices.
- Tea-focused Retailers - The Experiential Curators: Specialty tea shops and online retailers fill an important niche in the tea market for those who wish to delve deeper into the world of tea.
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Summary and extracts
1 Market overview
1.1 Definition and presentation of the market
Three billion cups of tea are consumed every day, making it the second most consumed beverage in the world after water. Tea was born in China, introduced to Japan in the end of the 8th century, is an integral part of the British and other cultures, and also has a strong presence in the culture in the Middle Eastern.
Tea derives from the leaves of the tea plant (about 200 species) whereby it is infused in hot water. There are different types of teas (black, green, Oolong, yellow, white and post-fermented) which differ according to the treatment of the harvested leaves. Rooibos or "red tea" is actually an infusion obtained from the leaves of Aspalathus linearis, which is only found in South Africa, and not from the tea plant.
The global tea market is projected to be worth around $16.48 billion in 2025. The United States is the third largest importer of tea in the world. In 2018, 84% of all tea consumed in the US was black tea, 15% was green Tea, and the small remaining amount was oolong, white and dark tea. [teausa] Driven by the health trend, tea is expected to continue growing in the US. Moreover, factors such as continued innovation and the discovery of unique, flavorful and high-end specialty tea will also be crucial for growth.
The following study analyses the development of the market, as well as the typology of consumers. In the process, the market structure and the competitive situation are also examined in order to be able to provide informative information.
1.2 A rapidly growing world market
In recent years, global tea cultivation has developed rapidly, as shown by recent statistics. Globally, tea acreage has grown steadily, driven by increasing demand and consumption of tea in many parts of the world.
Anbaufläche von Tee Weltweit, ****, In **** Hektar Quelle: fao.org
The statistics show that tea cultivation areas have significantly increased in traditional tea-producing countries such as China, India, Sri Lanka, and Kenya. There is also a growth of cultivation areas in other countries that were not previously considered significant tea producers. This is a clear indication that global tea cultivation and consumption are continuing to rise.
One reason for the increase in cultivation areas is the growing popularity of tea as a healthy and refreshing beverage. More and more people are recognizing the health benefits of tea, which is rich in antioxidants, vitamins, and minerals. Additionally, tea is available in many different flavors, making it popular among consumers of different ages and cultures. Another factor that is driving the growth of tea cultivation areas is the increasing demand for sustainably and environmentally friendly produced teas. More consumers value organic farming and fair working conditions for tea pickers. This is leading to the creation of new cultivation areas ...
1.3 Growing market in the U.S. tea industry
The pandemic had both positive and negative effects on the tea market. In ****, the market saw growth, with tea imports rising by over *% through September. Black tea, in particular, saw an increase of over *% compared to the previous year. According to a study sponsored by the tea industry, consumers sought refuge in tea during these challenging times.
This trend continued in **** as well. Tea is seen as a natural stress reliever, offering people a sense of centeredness during these uncertain times. In addition, tea is valued as a plant-based, healthy beverage that offers numerous health benefits due to its high content of flavonoids.
In **** and ****, several new research studies were published confirming tea's impressive ability to boost the human immune system. Thus, the pandemic has in some ways contributed to raising awareness of the health benefits of tea and increasing its popularity.
Umsatzprognose für den US-Teemarkt United States, ****, in billion USD Quelle: Tea Association of the USA
It is expected that the industry will quickly recover from the Covid-** impact, continuesly growing at an annual growth rate (***) of *-*%. This is attributed to the increasing consumption of tea at home, which is also expected to boost out-of-home consumption as the ...
1.4 Foreign trade
In ****, the United States exported tea worth $**.* million and was among the top ** tea exporters in the world. Tea was ranked ***th among the most exported products of the United States in the same year. The main destinations of tea exports from the United States were Canada (***).
The fastest-growing export markets for tea of the United States between **** and **** were Canada (***).
However, there is a trade deficit, as can be seen from the following chart:
Außenhandelsbilanz der Vereinigten Staaten mit Tee Vereinigte Staaten, ****, in Million USD Quelle: oec.world
2 Demand Analysis
2.1 Tea consumption in the U.S.A.
Tea, the second most popular beverage in the world after water, is present in nearly **% of American households. This unique beverage can be enjoyed hot or cold, at any time, any place, and for any occasion. On a typical day, more than *** million people in the United States consume tea. In ****, US Americans consumed nearly ** billion servings of tea, which is equivalent to over *.* billion gallons.
Jährlicher Konsum von Tee nach Art United States, ****, in % Quelle: Tea Association of the U.S.A
Black tea has enjoyed great popularity for centuries and is a firm favourite with many tea drinkers.
Gründe für den Konsum von Schwarzem Tee United States, ****, in % Quelle: Silver Tips A survey has found that **% of respondents drink black tea primarily when feeling tired. This is due to the natural caffeine in tea, which serves as a gentle stimulant and has a milder effect than caffeine in coffee. Therefore, it is the preferred alternative to coffee for many people to get an energy boost. **% of respondents stated that they drink black tea when thirsty. This is an interesting finding, as tea in general is often seen as a thirst quencher. The warm drink refreshes ...
2.2 Tea consumption by age and gender
The tea industry is an ever-growing market that appeals to a wide range of consumers worldwide. Tea is considered one of the most consumed beverages in the world, and its popularity spans across different age groups and cultures.
Teekonsum betrifft nicht nur ältere Generationen USA, ****, in % Quelle: Silver Tips
In terms of consumption behavior, the analysis shows that there is no clear age limit for tea drinkers. Both millennials and older generations show a high affinity for tea consumption. According to a study, **% of millennials drink tea, while **% of older generations also consume tea. This shows that tea is a beverage that appeals to people of all ages and thus offers enormous market potential.
Contrary to popular belief that tea is mainly consumed by women, a recent study shows that the gender distribution in tea consumption is largely balanced. **% of Americans surveyed believe that tea is mostly consumed by women. However, **% of women surveyed reported drinking tea, compared to **% of men. These numbers show that tea is increasingly gaining popularity among both men and women.
Teekonsum nach Geschlecht United States, ****, in %
2.3 Growing demand for iced tea and ready-to-drink (RTD)
Tea is a popular beverage enjoyed in various forms and flavors worldwide. In the following, we will focus on the three main categories of tea, based on the tea Association of the U.S.A:
Ready-to-Drink (***) tea iced tea and tea bags herbal & loose tea, growing popularity of specialty teas.
The first category, Ready-to-Drink (***) tea, has seen a remarkable growth of about *-*% in recent years. Despite competition from other beverages and the impact of COVID-**, this category has continued its growth trend. RTD teas are practical and easily accessible, which makes them particularly popular among consumers.
The second category, iced tea, represents an impressive share of **-**% of the entire tea market. Iced tea is a refreshing alternative to hot tea and is often offered in various flavors. Its popularity is particularly undeniable in warmer months and in regions with hot climates.
The third category includes tea bags, herbal & loose tea. Although sales in traditional distribution channels have declined slightly, this sector has overall maintained exceptional growth in **** as consumers rediscovered tea as a source of comfort during the pandemic. Tea bags and loose tea offer a wide variety of flavors and allow consumers to satisfy their own individual preferences ...
3 Market structure
3.1 Value Chain for tea
The following diagram shows a simplified value chain of the tea industry, with a focus on sustainable and socially just value creation.
Source: ****
In the past, tea products were primarily sold to end customers through supermarkets, drugstores, and wholesalers. However, in recent years, a declining trend in the distribution of tea through these channels has been observed.
This decline could indicate a change in consumer preferences. More and more people value high-quality products produced by small manufacturers. These often offer a wider range of exclusive tea varieties, which are produced with great care and attention to detail. Quality, sustainability, and support for local producers are the main focus.
Another factor that could contribute to this development is the increasing online trade. Digitalization has changed shopping behavior and allows customers to conveniently access a wide range of tea products from home. Online shops also often provide detailed information about the origin, processing, and preparation of the teas, which helps buyers in their selection and decision-making process.
Overall, it is evident that the tea market is changing. Consumers are increasingly looking for high-quality products and appreciate the advantages of online trading. To succeed in this changed environment, both established and new providers need ...
3.2 A competitive market dominated by big brands in particular
The tea market is a diverse and multifaceted business area that ranges from small family-owned factories to large globally operating companies. The industry is highly fragmented, meaning that there are a variety of players operating in different areas and market segments.
On one hand, there are small family-owned factories that specialize in producing handmade tea and traditional blends. These businesses place a great emphasis on the quality and authenticity of their products and are often regionally or locally oriented. They offer a wide range of tea varieties that cater to the tastes and preferences of their customers.
On the other hand, there are large factories that participate in the global market and in many cases belong to global brands such as Nestea and Lipton Iced Tea. These companies typically rely on mass production and efficient distribution channels to sell their products worldwide. They offer a variety of tea varieties and flavors to appeal to a broad customer base, often relying on advertising and marketing strategies to expand their market presence.
The tea market is also divided into different segments that cater to the different needs and preferences of consumers. One of these segments is iced tea, which is particularly popular in ...
3.3 the most popular brands for ready-to-drink tea
In ****, Lipton Pure Leaf was the top-selling ready-to-drink (***) tea brand in the United States, with sales exceeding *** million dollars. The brand, which originated from Sir Thomas Lipton in ****, is now owned by Unilever and sold by Pepsi Lipton International.
Meist Konsumierte Teemarken im Bereich Ready-to-drink Tee United States, ****, in Million USD Quelle: Beverage Industry Magazine
The overall RTD tea market in the United States reached *.** billion dollars in ****, with a modest growth of *.* percent compared to the previous year:
Sales for Ready-to-drink tea in the US United States, ****, in USD Source: Beverage Digest Fact Book **th Edition Datasheets
4 Analysis of the offer
4.1 A varied offer based on several types of tea
All types of tea, including black, green, oolong, white, pu-erh, and purple, come from the same plant, known as Camellia sinensis. However, the distinct taste, aroma, and appearance of each tea are a result of various factors such as the specific varietal of the plant, the region where it's grown, and the processing techniques used. These methods involve diverse stages of withering, oxidation, rolling, and drying, which ultimately contribute to the unique characteristics of each tea. Thus, despite sharing a common origin, these teas offer a wide range of flavors and experiences for tea enthusiasts to explore and enjoy [***]. the following table shows the description and health benefits of the respective teas.
Black tea:
Black tea is made from two varieties of the tea plant, camellia sinensis sinensis and camellia sinensis assamica. The production process involves harvesting, wilting, and crushing the leaves, followed by full oxidation and drying. Some black teas undergo the crush-tear-curl method for a finer texture. Finally, the tea is sorted and packaged. Black tea is mainly produced in China and India, with other countries like Sri Lanka, Nepal, Vietnam, and Kenya also exporting it. Chinese black teas are lighter and milder, while Indian black teas have a ...
4.2 development of tea prices
The tea market has experienced various price fluctuations over the years, which can be attributed to different factors such as supply and demand, weather conditions, and global economic trends. From **** to ****, daily price updates were made to reflect the market's dynamics. The prices are given in US dollars (***).
The current price for tea stands at *.** USD per kilogram, representing an increase compared to the previous price of *.** USD per kilogram. This price development shows that the market is constantly changing and adapting to current circumstances.
The highest price for tea ever reached is *.** USD per kilogram in ****. This record price indicates that there were times when the demand for tea was very high or the supply was scarce, leading to a sharp increase in prices.
On the other hand, the lowest price for tea was *.** USD per kilogram. This historical low suggests that there were also times when the supply of tea was greater than the demand, or external factors such as favorable weather conditions led to increased production, which in turn pushed down prices.
Preisindex von Tee United States, **** - ****, in USD pro Kg Quelle: Tradingeconomics
5 Regulations
5.1 Regulation and challenges
Challenges in the international tea trade
The current situation in international trade is characterised by various challenges that also affect the tea trade. These include:
Disruptions in the global supply chain: delays and bottlenecks in the movement of goods, especially due to the current COVID ** pandemic, lead to increased transport costs and longer delivery times. Lack of harmonisation in plant protection products: Different standards and approval procedures for plant protection products complicate international trade and can lead to trade barriers. Political decisions versus scientific findings: The assessment of plant protection products such as glyphosate is not always based on scientific evidence, but is often driven by political interests. Designations of origin: Different rules on country of origin labelling complicate trade and can lead to consumer confusion. Tariffs and trade barriers: Protectionist measures such as tariffs and quotas make free trade more difficult and can lead to market distortions
Regulation of the tea trade: opportunities and measures
In order to promote the tea trade and overcome the challenges mentioned above, various regulatory measures are conceivable:
Harmonisation of pesticide standards: International cooperation in setting standards and approval procedures for pesticides can reduce trade barriers and promote free trade. Science-based decision-making: The evaluation of ...
6 Positioning of the players
6.1 Segmentation
- Bigelow Tea Company
- Red Rose Tea
- Salada Tea
- Harney & Sons
- Red Diamond Inc.
- Royal Cup
- Argo Tea Inc.
- Harris Tea Co
- Capital Teas
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