ID: MRFR/F-B & N/1603-CR | 110 Pages | Author: Snehal Singh | February 2021
The Tea Market is projected to register a CAGR of 4.60% from 2020 to 2027.Tea is the most popular beverage in the globe, processed from the leaves of the Camellia sinensis plant. Rising awareness regarding benefits such as boosting the immune system, strengthening bones and teeth, reducing the risk for cardiovascular diseases, cancer, and kidney stones, and controlling blood cholesterol levels is anticipated to fuel the product demand. The Tea Market size is expected to reach approximately USD 28 billion by 2027. Moreover, the rising popularity of organic tea is anticipated to impact the market's growth positively. Manufacturers engage in R&D to enhance the quality and taste of their products to attract more customers. For instance, Green Hills launched Rum and Honey Flavored Herbal Tea for consumers looking for low-sugar beverages. The product is alcohol-free and is rich in apple, licorice, cinnamon, and star anise, giving it a taste equivalent to alcohol.
COVID-19 Impact Analysis
The COVID-19 pandemic has had a devastating effect on the market owing to complete lockdown situations and social distancing measures that have led to import-export restrictions, labor shortages, supply chain disruptions, and a decline in manufacturing processes. For instance, Kenya, the largest tea-exporting country in Africa, was greatly affected during the pandemic due to disruption in transportation. Furthermore, India, the second largest tea producer globally, was negatively impacted by the pandemic due to the shutdown of production facilities for months, affecting the tea producers' and smallholder livelihoods.
Growing consumer disposable income and willingness to spend more money on various products encourage manufacturers to introduce premium and exclusive blends. They have introduced various healthy ingredients in their tea blends to target common health conditions, including diabetes, obesity, and heart diseases. Rising application in beauty and cosmetics is expected to further fuel market growth. Moreover, the growing acceptance of tea instead of aerated drinks, especially among health-conscious consumers, is a major factor encouraging market growth. The low caffeine and high antioxidant content make tea a suitable beverage for consumers of all ages.
The growing trend of on-the-go nutrition and healthy hydration has significantly expanded consumers' demand for functional beverages. Green-type tea contains huge amounts of antioxidants that assist in reducing the aging of cells and tissues and enhance normal body functions. The increasing demand for nutrient-enriched beverages to decrease the risk of certain health conditions fuels the market's growth. Growing research and innovation activities to develop novel tea varieties, including naturally flavored, pure, organic, and environmentally friendly, also support market growth. Technological enhancements to develop novel packaging for tea are expected to boost market growth over the forecast period.
The shortage of knowledge regarding proper farming practices for producing this tea is a major restraint for the Tea Market growth. Tea growers generally need more expertise to convert their conventional farming systems to become more productive and sustainable. Moreover, the production cost of this tea is comparatively higher than that of the conventional one, which hampers the market's growth. The certification process included in organic tea production and sales in the international market is very costly. The access to certification cost implicated and the time lag of three years often hamper farmers from adopting organic farming.
The high cost of green-type tea is expected to be a key restraint for the market's growth. Green-type tea cost remains a major concern for the tea industry. The production of this tea variety is huge in the Asian countries of Japan, China, and India. The shortage of awareness regarding good farming practices and the safe use of agrochemicals among farmers generally limits production and increases the cost of the product.
Modern-day tea consumers actively seek high-value specialty teas due to the developing trend of natural, clean-label, organic and healthful products. Customers are also more aware of tea varieties and origins and seek an authentic tea experience. Millennials actively search for healthy teas, necessitating manufacturers of innovative tea blends, flavors, and ready-to-drink teas. The growing knowledge of the healthful characteristics of organically grown tea would significantly contribute to the enhanced demand for organically grown tea.
The Tea Market segmentation, based on type, is green tea, black tea, oolong tea, herbal tea, and others. The black tea category held a prominent market share in 2020 due to a huge range of advantages, such as antioxidant properties that remove free radicals and decrease cell damage. However, green tea was the fastest-growing category due to an increase in health and fitness-conscious people.
The Tea Market segment, based on the form, is loose leaf, tea bags, and others. In 2020, tea bags accounted for the largest share of the global market owing to the convenience it offers over loose or differently packaged tea, as brewing tea with tea bags is very easy and disposal of the used tea bag is even more convenient. However, the loose leaf was the fastest-growing category due to customers' growing demand for loose-leaf tea.
Based on category, the global market is divided into organic and conventional. The organic category dominated the market for tea in 2020 due to the growing popularity of organic tea among consumers. Conventional was the fastest-growing category due to the increased usage of conventional tea in Asia-Pacific countries.
By distribution channel, the global market has been segmented into store-based and non-store-based. In 2020 the non-store-based category had a major share in the market due to the rise of online apps coupled with the availability of discounts and easy product delivery. However, the store-based category fuels the market as it is one-stop access to various products from various brands.
Tea Market Share, by Region, 2020 (%)
Tea Market Overview by Region
By region, the Tea Market has been divided into North America, Europe, Asia-Pacific, and the Rest of the World. North America accounted for the most extensive market share. Asia-Pacific will exhibit the highest CAGR during the forecast period.
North America dominated the market share in 2020 due to emerging trends such as consuming natural, safe, clean-label products. Consumers in the region are becoming more aware of the safety and ethnicity of the healthy food they choose to consume. The trend of functional organic beverages in the US and Canada drives market growth in North America. The growing focus on developing and launching innovative organic tea variants in novel packaging is expected to boost the regional market growth during the forecast period.
Asia-Pacific accounted for the second-largest market share in the global market in 2020, owing to the increasing discretionary incomes among consumers in the region. Consumers in countries such as China, India, Japan, and Indonesia have now started spending more on healthful products. The growing popularity of green tea and herbal tea to improve beauty and health is primarily fueling the market growth in the region. This tea is perceived to be healthier as compared to conventional tea variants. The rapid expansion of the food and beverage industry in the region has also significantly contributed to the market growth in Asia-Pacific.
The market includes tier-1, tier-2, and local players. The tier-1 and tier-2 players have global reach with diverse product portfolios. Companies such as Tata Global Beverages, Unilever, Associated British Foods Plc., TAE, Nestlé S.A., Barry's Tea, and Apeejay Surrendra Group dominate the global market owing to product differentiation, strategic developments, financial stability, and diversified regional presence. The major players are concentrating on supporting research and development. Furthermore, they embrace strategic growth initiatives, such as development, joint ventures, product introduction, and partnerships, to strengthen their market position and capture an extensive customer base.
Prominent players in the Tea Market research include Bettys & Taylors Group Ltd., McLeod Russel, Mighty Leaf Tea Company, ITO EN Inc., The Republic of Tea, Tazo Tea Company, Numi Organic Tea, Teavana, Celestial Seasonings, Inc., and Fukujuen, among others.
Rest of the World
Objectives of the Study
The objectives of the study are summarized in 5 stages. They are as mentioned below:
To identify and estimate the market size for the Tea Market report segmented by type, form, category, and distribution channel by value (in US dollars). Also, to understand the consumption/ demand created by consumers of Tea Market forecast between 2020 and 2027
To identify the Tea Market growth and infer the drivers, opportunities, restraints, and challenges.
To find out the factors which are impacting the Tea Market size
To identify and understand the several factors involved in the market affected by the pandemic
To provide a detailed insight into the prominent companies operating in the market. The profiling will include the financial health of the company in the past 2-3 years with segmental and regional revenue breakup, recent developments, product offerings, SWOT analysis, and key strategies.
|Market Size||USD 28 Billion|
|Forecast Units||Value (USD Billion)|
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, and Trends|
|Segments Covered||Type, Form, Category, and Distribution Channel|
|Geographies Covered||North America, Europe, Asia-Pacific, and Rest of the World (RoW)|
|Key Vendors||Unilever, Tata Global Beverages, Associated British Foods Plc., TAE, Nestlé S.A., Barry's Tea, and Apeejay Surrendra Group|
|Key Market Opportunities||Increasing demand for specialty teas|
|Key Market Drivers||Growing demand for functional beverages|
The Tea Market forecast period is 2020 - 2027
The market is expected to register a CAGR of 4.60% over the next 10 years, according to Tea Market research.
Asia-Pacific is expected to register the highest CAGR during 2020 - 2027
North America held the largest share in 2020
The market size is expected to be USD 28 billion by 2027.
Tata Global Beverages, Associated British Foods Plc., Unilever, Nestlé S.A., Barry's Tea, and Apeejay Surrendra Group are the major companies operating in the global market
Key Questions Answered
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