Herbal Tea Market

Growing adoption of healthy consumables to boost the market growth

One of the most significant factors driving the market growth is the increasing consumer preference for safe, chemical-free, and healthy consumables. Moreover, tea farming is based on ecological processes, biodiversity, and cycles tailored to local conditions, keeping the soil rich and fertile and promoting plant biodiversity. This, along with growing initiatives by governing bodies in various countries to encourage the adoption of sustainable agricultural practices through various incentives and subsidies, contributes to market growth.

Further, an increasing working population, rising demand for ready-to-use products, and expanding retail markets are expected to drive market growth over the forecast period. The growing popularity of herbal tea as a natural ingredient in personal care products is anticipated to drive growth in the market. Rising disposable income levels and rising consumer awareness of healthy lifestyles are also expected to drive market growth.

Additionally, Consumer awareness regarding clean-label foods such as pesticide-free commodities primarily drives the growth of the market across the globe. In the past few years, production has considerably increased due to the perceived higher quality of organically grown herbal tea and the improvements for environmental and human wellbeing. Furthermore, organically grown tea sales are anticipated to have better price realization and uplift the socio-economic condition of tea producers. The increasing awareness regarding food safety and rising demand for herbal beverages in the market have enhanced the herbal tea market CAGR globally in recent years.

However, the rising popularity of herbal tea is anticipated to impact the market's growth positively. Manufacturers engage in R&D to improve the quality and taste of their products to attract more consumers. For instance, Green Hills introduced Rum and Honey Flavored Herbal Tea for consumers looking for low-sugar beverages. The product is free from alcohol and is rich with licorice, apple, cinnamon, and star anise that give it a taste similar to alcohol, driving the growth of the herbal tea market revenue.

The increasing awareness of health and wellness among consumers appears to be a primary driver of the Global Herbal Tea Market Industry. As individuals seek natural alternatives to traditional beverages, herbal teas, known for their potential health benefits, gain popularity. This trend is reflected in the projected market value of 4341.2 USD Billion in 2024, indicating a robust demand for herbal products. Consumers are increasingly turning to herbal teas for their perceived advantages, such as improved digestion and enhanced immunity. This shift towards healthier lifestyles suggests a sustained growth trajectory for the Global Herbal Tea Market Industry.

By Region, the study provides market insights into North America, Europe, Asia-Pacific and the Rest of the World. The Asia-Pacific herbal tea market accounted for USD 1.43 billion in 2023 and is expected to exhibit a significant CAGR growth during the study period. This is attributed to the growing popularity of green tea and herbal tea to improve beauty and health, primarily fuelling the region's market growth. This tea is perceived to be more beneficial as compared to conventional tea variants.

Moreover, China herbal tea market held the largest market share, and the India herbal tea market was the fastest-growing market in the Asia-Pacific region.

Further, the major countries studied in the market report are the U.S, Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2: HERBAL TEA MARKET SHARE BY REGION 2023 (%)

Source: Secondary Research, Primary Research, Market Research Future Database and Analyst Review

Europe herbal tea market accounts for the second-largest market share due to consumers' growing demand for specialty teas. Organically grown herbal tea is becoming mainstream in the European retail market. The emerging trend of sustainably grown and ethically traded teas in the region is expected to boost the tea market's growth further. Further, the Germany herbal tea market held the largest market share, and the UK herbal tea market was the fastest-growing market in the European region.

The North America herbal tea market is expected to grow at the fastest CAGR from 2024 to 2032. This is due to the growing prevalence of obesity and overweight issues in the region, the consumption and desire to have herbal tea are surging as it leads to weight loss. Moreover, US herbal tea market held the largest market share, and the Canada herbal tea market was the fastest-growing market in the North America region.

Recent Development

In 2023, VAHDAM India, a top worldwide wellness company famous for its premium, organic teas and spices from India, will launch. This new line of iced teas is made with just real tea and is offered in two practical formats: quick premix and pitcher tea bags.

The business will concentrate on obtaining organic tea from Bhutan utilising sustainable farming practises in 2023, avoiding the use of synthetic chemicals. Customers of From Bhutan can choose from a variety of teas that can be consumed for recreational, nutritional, or therapeutic reasons. Soothing Sleep, the Cordyceps (Caterpillar) Tea, Hippy Happy, the Sea Berry (Sea Buckthorn) Tea, and Gut Goodness Tea are the brand's newest additions to the beverage menu.

Herbal iced tea company Hrbvor recently introduced a line of still and sparkling teas in 2022 after giving consumers a sneak peek at the new items during an industry gathering. Hrbvor targets wellness-conscious families looking for healthier beverage options with their assortment of 'artfully infused' organic herbs in unique blends with useful properties.

Bigelow Tea is pleased to announce the addition of three new flavours to its enduringly popular Bigelow Signature Line of teas in 2023. With Peak EnergyTM Black Tea with extra L-Theanine and Caffeine, Whispering WildflowersTM Herbal Tea with L-Theanine, and Ginger Honey Herbal Tea with Zinc, Bigelow Tea, the market leader in the country and producer of over two billion tea bags each year, continues to revolutionise the tea business. Each blend offers exceptional flavour while containing ingredients and nutrients.

In April 2022 Unilever bought Pukka Herbs Ltd., which is a famous detoxifying green tea company. This would allow Unilever to increase their range of organic and natural products.

In March 2022, Tata Global beverages launched a new brand of herbal Teas called “Teavana Wellness Teas,” which is a move towards globalizing the world of herbal tea.

In July 2021, a private equity firm Zetland Capital purchased Typhoo Tea Ltd.

Major market players are investing a lot of money in R&D to increase their product lines, which will help the market grow even more. Market participants are also taking various strategic initiatives to expand their worldwide footprint, with key market developments such as new product launches, mergers and acquisitions, contractual agreements, increased investments, and collaboration with other enterprises. Competitors in the herbal tea industry must offer cost-effective items to enhance and survive in an increasingly competitive and growing market environment.

One of the primary business strategies manufacturers adopt in the market to benefit clients and expand the market sector is manufacturing locally to reduce operating costs. The herbal tea industry has provided medicine with some of the most significant benefits in recent years. The herbal tea market major player such as Tata Consumer Product Limited (India), Unilever (UK), Associated British Foods plc (UK), Vahdam (India) and others are working on expanding the market demand by investing in research and development activities.

Typhoo, a major British tea brand, is investing in researching and developing innovative tea variants that fit modern consumer demands for natural, herbal, and clean-label products. For instance, in March 2020, the company expanded its organic herbal tea portfolio by adding three new variants, purifying super green, digestive power seeds, and immunity-boosting three teas.

Also, Hybrid Green Tea came into existence in 2020, intending to ensure the spread of 'The Habit of Good Health.' The word ‘Hybrid’ signifies that the company has arrived at a composition of herbs that offers maximum benefits to the body while creating a tasty drink at the same time. In October 2023, Hybrid Green Tea introduced A- Grade herbal tea to improve lifestyle. They've devised tea mixes that assist in staying in shape at all times, ensuring that all products are dependable, hygienic, and secure.

For instance, in June 2022, Clipper Tea Company based in the United Kingdom, expanded its product range in the United States with some new packaging as well as flavors. Amongst the newly added flavors are organic Earl Grey black tea, organic orange & turmeric herbal tea, organic green tea & lemon, organic winter apple and cinnamon herbal tea, as well as organic winter berries herbal teas.

In May 2022, Organic India introduced new types of herbal tea, such as Tulsi Detox Kahwa, along with infusions like Peppermint Refresh, Moringa hibiscus, and Simply Chamomile to adapt to changing consumer preferences towards healthy alternatives post-COVID-19 pandemic.