Tea remains a perennial favourite drink around the world, with numerous varieties and variations for consumers to choose from. While traditional staples like pure black and green teas continue to appeal, trends in flavor and format come and go. Some of these trends endure for years, such as the popularity of matcha in North America, but others can develop and evolve more quickly. Innovative flavors and packaging can capture new consumers and keep current ones interested. And with so many large and small tea manufacturers in the market, keeping up with trends and customer demand can be key to standing out and staying competitive.
The global tea market is a large and diverse one, estimated to increase by over $13 billion in the next 5 years. Despite the challenges created by the COVID-19 pandemic such as diminished workforces, developing safe production practices, and shipping delays, the market is expected to grow at a rate of more than 4% during 2020, with APAC accounting for more than half of that growth. Trends new and old help to drive the global tea market, and both small independent tea manufacturers and famous tea brands are adapting and introducing new products in order to stay relevant.
Microplastics are out
Sustainability and environmentalism have been growing in importance across numerous markets. Consumers are becoming more focused on the impact that the products they consume have on the environment, and are changing their purchasing habits based on this.
It recently came to light that many teabags contain microplastics, which are harmful to the environment. This has caused vendors in the tea market to develop alternative tea bags that are free of plastic in order to become more sustainable and to hold on to consumers concerned with making ethical purchases. Many tea manufacturers now advertise plastic-free tea bags, and companies will continue to innovate for some time to perfect new, fully degradable products.
The effort to reduce or eliminate plastic waste in products will also help drive loose leaf tea sales. While loose leaf teas may be less convenient for users, they eliminate the need for tea manufacturers to buy or make tea bags and allow consumers to be more environmentally conscious. This may also bring growth and creativity in tea strainers and related products used for tea brewing.
Botanicals are in
While traditional camellia sinensis-based teas remain a staple, they’ve begun to lose market share to herbal teas. Fruit infusions are becoming increasingly popular, with consumers looking for more sophisticated flavor profiles along with health benefits.
Teas featuring ingredients used in Chinese medicine and Indian Ayurveda are in high demand, and will continue to grow in popularity. Consumers are adopting these teas as treatments for health problems such as stress, anxiety, weight gain, and high blood pressure, as well as to provide general health benefits and nutrients. Turmeric, for example, was a rising star in 2019 and will continue to be a big ingredient in teas this year. Tulsi, ashwagandha, and rhodiola are also growing in popularity with consumers who are looking for functional teas.
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Herbal and floral teas are performing well too, starring ingredients such as lavender, rose, basil, and mint. Consumers choose these teas both for their perceived health benefits as well as their flavors, which provide variety and subtlety over other types of tea and alternative beverages. No longer just the purview of niche and specialty tea manufacturers, teas with these ingredients are now being offered by major tea brands such as Tetley, Twinings, and Nestle.
CBD moves into the tea market
CBD is touted as a treatment for a wide range of ailments, from anxiety and insomnia to inflammation, acne, and more. While research into its benefits is still fairly limited and inconclusive, CBD continues to be highly popular in health products and foods. It may come as little surprise, then, that the ingredient has found its way into teas as well. While legal restrictions in many countries limit where CBD teas can be sold, they will continue to surge in popularity in countries such as the US, Canada, and the UK in 2020.
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Tariffs and trade relations disrupt key players
One country’s roadblock can become another’s opportunity. Trade disagreements and tariffs between the US and China over the past two years have led to higher prices on Chinese teas and lower imports from the region. While China is still a key player in the global tea market, it has lost ground to other tea growers such as Sri Lanka, India and Africa, which have all seen increases in tea imports over the past year. The US lowered its tariffs on Chinese tea earlier this year, but trade relations between the two countries remain uncertain, and global tea manufacturers will likely continue to feel their effects over the course of 2020.
Learn more about the global tea market, including insights such as:
- CAGR of the market during the forecast period 2020-2024
- Detailed information on factors that will tea market growth during the next five years
- Precise estimation of the tea market size and its contribution to the parent market
- Accurate predictions on upcoming trends and changes in consumer behavior
- The growth of the tea market industry across APAC, Europe, MEA, North America, and South America
- A thorough analysis of the market’s competitive landscape and detailed information on vendors
- Comprehensive details of factors that will challenge the growth of tea manufacturers
Discover opportunities, challenges, and trends in the global tea industry with Technavio’s market research report. Try a free sample today!