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:

The statistics show that tea 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 ...

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 ...

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 ...

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 ...

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 ...

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 ...

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 ...

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: ...

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 ...

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 ...

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 ...

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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Companies quoted in this study

This study contains a complete overview of the companies in the market, with the latest figures and news for each company. :

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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