The global tea market is estimated to grow at a CAGR of 4.95%, from a market size of US$56.095 billion in 2020 to a market size of US$78.688 billion by 2027.
Tea is one of the most commonly consumed non-alcoholic beverages across the globe. The market is projected to grow significantly due to the prevalent tea culture in some parts of the world, including China and India. Tea is known to originate from China and has gained popularity in the last 2000 years. It is still an important beverage in Chinese society. At present more than 1000 varieties of tea are available in the market, and more than 25 countries in the world are involved in tea cultivation.
According to the Tea Association of the U.S.A Inc., tea is the most widely consumed beverage globally after water. Around 80% of households in the United States of America consume tea. About 159 million Americans are estimated to drink tea every day.
In 2019, it was noticed that more than 3.8 billion gallons of tea were consumed by Americans. Black tea accounted to hold a share of 84%, green tea accounted for 15%, and the remaining 1% share was distributed among oolong, white, and dark tea consumption. The United States continued to be the third-largest tea importer globally, followed by Russia and Pakistan. It is the only western country to grow in tea import and consumption.
Additionally, with the growing change in dietary consumption, the demand for ready-to-drink products has surged the market demand for ready-to-drink teas, including the consumption of iced teas as well, which is a quite refreshing drink, it is enjoyed by most millennials. Thus, the facts mentioned above fuel the market growth in the forecast period. The increasing disposable income in the developing regions of the world is further promoting tea consumption. The demand for tea is predicted to experience continued growth owing to a constant demand from the Asia Pacific region. Furthermore, with the growing awareness regarding the health benefits of tea, the market is estimated to grow, showing high growth prospects. The expanding product portfolio of teas, including herbal tea, green tea, black tea, white tea, and other tea varieties, is creating interest among tea lovers, further burgeoning the market growth in the forecast period. The booming concept of sustainable tea is augmenting the market demand in the forecast period, providing an opportunity for the global tea market to thrive. The utilization of tea extracts for various end-use applications, such as cosmetics and nutraceuticals, is further driving the market demand in the forecast period. However, the growing coffee consumption at the international level is predicted to hamper the market growth in the forecast period. On the basis of Geography, the Asia Pacific region is estimated to hold a significant share in the global tea market owing to the maximum tea consumption as tea drinking is prevalent in their culture.
The surging demand for sustainably produced tea is anticipated to augment the market growth in the projected period.
The growing demand for sustainable production of tea amid the increasing environmental awareness has led to increased adoption of Voluntary Sustainability Standards (VSS) in order to address certain issues in the tea market and propagate market growth over the upcoming few years. These standards provide tea consumers with more sustainable options. The production of VSS-compliant tea is focused on meeting consumer preferences and aiming to maintain the tea sector’s sustainability through the requirement of agricultural practices that enable climate resilience, help in the prevention of soil erosion, lower the use of pesticides, help in increasing the profitability for smallholders, in addition to improving the worker’s conditions, which include the provision of rights to collective bargaining and access to sanitation and clean drinking water. The aim of VSS is the creation of a virtuous cycle where demand for sustainable tea gives rise to better conditions for the tea producers, and the environment supporting the production would eventually lead to greater investments. Hence, this would prove to be a more sustainable and profitable sector for the producers. At first, the demand for sustainable tea arose from the regions of North America and Europe. This was utilized by the tea producers with resources to become VSS-compliant as an opportunity to gain access to these potentially attractive export markets and fulfil the increasing domestic demand.
The increasing consumption of instant beverage premixes is propelling market growth in the forecast period.
The growing preference for convenience food and beverages has given rise to augmenting the market demand for instant beverages like instant tea, propagating the market growth in the forecast period. This is because there are changes in the consumer lifestyle with the growing adoption of modern living conditions and moving away from the traditional style of cooking food and beverages. The change has been observed especially in the developing regions of the world and those parts of the world where home cooking was prevalent in their culture. The growing urbanization, increasing personal disposable income, and increasing family income have surged the market demand for these types of beverage products. The women in the families have started working and earning equivalent to their male counterparts. Hence, they find it easier and more convenient to use a beverage premix rather than preparing tea from scratch due to a busy schedule. In the developed regions of the world, people are moving towards the adoption of an individual lifestyle. The high disposable income in these regions, like the North American region, has further resulted in the consumer’s non-willingness to spend time on food preparation and are rather showing a preference for recreational activities, thus encouraging the utilization of ready-to-made food and beverages, fueling the market demand in the forecast period. Furthermore, the presence of varieties of instant tea premixes, which include instant masala tea, instant eliachi tea, instant ginger tea, and instant lemon tea, is offering strong growth prospects for the market to proliferate in the forecast period and satiate a range of customers at the international level.
Key Developments in the market:
COVID-19 had a significant impact on the global tea market. The growing health awareness among consumers amid the pandemic led to an unprecedented surge in domestic demand. Herbal tea and green tea are well-known for their health benefits. According to the UN Food and Agriculture Organisation, global tea production increased by 3.5 percent annually in 2020. The rapid growth of the e-commerce segment further fuelled the growth.
| Report Metric | Details |
| Market size value in 2020 | US$56.095 billion |
| Market size value in 2027 | US$78.688 billion |
| Growth Rate | CAGR of 4.95% from 2020 to 2027 |
| Base year | 2020 |
| Forecast period | 2022–2027 |
| Forecast Unit (Value) | USD Billion |
| Segments covered | Type, Distribution Channel, End-Use Application, Beverage Application, And Geography |
| Regions covered | North America, South America, Europe, Middle East and Africa, Asia Pacific |
| Companies covered | Tata Consumer Products Ltd, Associated British Foods plc, Nestlé, ITO EN, LTD., Barry’s Tea, Dilmah Ceylon Tea Company PLC, Celestial Seasonings, Inc., Harney & Sons Fine Teas, Full Leaf Tea Company, Ohio Tea Company |
| Customization scope | Free report customization with purchase |
Segmentation:
Frequently Asked Questions (FAQs)
Q1. What will be the tea market size by 2027?
A1. The global tea market is estimated to reach a market size of US$78.688 billion by 2027.
Q2. What is the size of the global tea market?
A2. Global Tea Market was valued at US$56.095 billion in 2020.
Q3. What are the growth prospects for the global tea market?
A3. The tea market is estimated to grow at a CAGR of 4.95% over the forecast period.
Q4. Which region holds the maximum market share of the tea market?
A4. The Asia Pacific region is estimated to hold a significant share in the global tea market owing to the maximum tea consumption as tea drinking is prevalent in their culture.
Q5. What factors are anticipated to drive the global tea market growth?
A5. The tea market is projected to grow at a significant rate due to the prevalent tea culture in some parts of the world, including China and India.
Tata Consumer Products Ltd
Associated British Foods plc
Nestlé
ITO EN, LTD.
Barry’s Tea
Dilmah Ceylon Tea Company PLC
Celestial Seasonings, Inc.
Harney & Sons Fine Teas
Full Leaf Tea Company
Ohio Tea Company
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