Green tea is an important segment within the $2.58billion specialty tea category, according to the Tea Association of the USA,representing about 15% of total consumption, although it skews much higher in Asianpopulations and is gaining popularity in the ready-to-drink segment.
Green tea is highly regarded and rapidly growingworldwide yet still finding its footing in American restaurants and homes.
Studies of past-day consumption reveal that about fourin five American consumers drink tea, but not daily and not hot and they are notnearly as likely to drink green tea as black. Suppliers report an increase inthe percentage total imports during the past five years, but year-on-year tea importsoverall are slightly lower, according to the Tea Association of the USA.
Green tea’s growing familiarity among American consumersis due in part to promotions in foodservice where it now appears on most menus,including some fast-food chains. Furthermore, tea is generally viewed as healthy,natural and non-alcoholic. It blends with an infinite number of ingredients andhas demonstrated itself to be a refreshing alternative to carbonated soda.
Green tea is more popular with young people thantheir elders. Millennials are the most likely to drink tea (87%) includinggreen tea. One example: Starbucks is currently inundated with orders for a StarWars themed “Baby Yoda” matcha Frappuccino with a caramel drizzle added to theinside and topped with whipped cream. Black tea rarely gets similar attention.
Global Growth
An October report from Global Industry Analysts (GIA) projects the green tea market will grow by $8.1 billion globallyby 2025. Green tea bags “display the potential to grow at more than 6.3%”within a category that will average 5.8% growth overall, according to GIA. TheU.S. will maintain a 4.9% growth momentum during the next five years, predicts GIA.Germany is expected to grow its share of European green tea sales by $286.6 millionwith the rest of Europe consuming an additional $246.5 million. Green tea bagsin Japan are part of a trend toward convenience and will reach a market size of$479.9 million by 2025, according to GIA.
GIA predicts China, the world’s largest green teaproducer, is likely to become the world’s largest consumer of green tea inbags. Package tea sales are expected to top $2.2 billion by 2025, a compoundgrowth rate of 8.5%.
Imports Penalized
There were no green tea imports to the U.S. fromChina during the 1950s through the 1970s. Imports were flat through the 1990saveraging about $25 million per year until 2004-05 when values quicklyincreased to more than $135 million per year, according to OECD (Organisationfor Economic Co-operation and Development) statistics. It was during this period that the U.S. became one of thetop three tea importers in the world, joining Pakistan and Russia andsurpassing the U.K. In 2018 the U.S. imported about 6.6% of global tea byvalue, totaling $487.3 million. Russia imported $497 million and Pakistan $571.3million, accounting for 7.7% of global tea imports.
China in 2019 was by far the largest supplier ofgreen tea to the U.S. followed by Japan and Canada, India and Germany. Chinashipped $94.2 million during 2018, Japan $64 million. The five-year trend (up1.1% since 2014) remains positive with value-addition apparent. Imports fromTaiwan (mainly oolongs) are up 78.6% in value since 2014, according to Worlds Top Exports, whichrelies on International Trade Centre and World Factbook statistics to make itscalculations. Organic green tea imports from China to the U.S. were $12.4million in 2016 and $9.3 million from Japan, due largely to the popularity ofmatcha. Imports from Japan are up 102.1% during the past five years, thebiggest gain of any U.S. trading partner, according to Worlds Top Exports.
The U.S. imposed significant tariffs on Chineseimports in 2019 and for the first time in two centuries these duties includedtea. It is unclear the full impact as many tea suppliers rushed to fillwarehouses prior to the imposition of the tax. Chinese tea importers thatmarket expensive varieties (many of which are not grown elsewhere) say they considertariffs up to 25% an inconvenience more than a barrier.
The trend suggests U.S. bulk purchases of green teawill shift to other countries. Chinese exports fell 12.5%overall during the first eight months of 2019. Exports to the U.S. were down1.1% in November, the 12th consecutive monthly decline of the17-month trade war. U.S. imports from China are down $43 billion year-on-year.
The Foreign Agricultural Services (FAS) GATS databaseshows tea imports from China were valued at $112 million through October, down4% compared to the same period in 2018. It seems unlikely imports will returnto the $150 million peak achieved in 2016. As to quantity, the GATS databaseshows the U.S. imported 19.1 million kilograms of tea from China during thefirst eight months of the year, up 7% compared to the same period during 2018reflecting efforts to stock up before tariffs were imposed.
Innovation
Green tea lattes, green iced teas and sparklinggreen teas attest to the versatility of this style of tea. Green tea lendsitself to florals like jasmine and to tropical flavors including coconut,mango, papaya and citrus.
Matcha is an ingredient used in baking, ice cream,desserts, smoothies and is dusted on many foods to add a natural caffeine kick.
Every major tea company includes green teas in theirlineup. In the past year Bigelow Tea introduced a matcha green with turmericand Stash Tea brought an Asian pear green tea blend as well as a green tea andhoneydew. Two Leaves and a Bud introduced a combination ground matcha, greentea and peppermint blend with a hint of goji berry and described as “packedwith antioxidants, chlorophyll and vitamins.”
Pique Tea Crystals offers an organic mint senchaand Colo.-based CUSA Tea offers an organic instant green tea. Each brand relieson new technology to brew at low temperature and under pressure over longperiods, extracting the essence of tea without boiling off the aromatics. Theteas are then dehydrated into powder and crystals that dissolve instantly inwater hot or cold. These next-generation instant teas sell in single-usepackets for about $1 per serving.
Tama Sparkling Teas include a mango made withorganic green tea, as well as a peach pear and lemon lavender flavored greentea. Sparkling teas did well in 2019, propelled in part by major promotions byPellegrino, PepsiCo and Coke.
In December Coca-Cola announced “Aha” a new line ofsparkling drinks with no calories or sodium. The line includes a citrus greentea and black cherry coffee, each containing 30mg of caffeine. The tea will beavailable in 16oz cans and single-flavor eight packs of 12oz cans.
Health Advantages
Green tea, which is lightly processed and retainsmuch of tea’s chlorophyll based goodness, is marketed as a healthfulalternative to juice and soda, and it islow- or no-calorie and tasty. Monthly, like clockwork, scientific papers attestto the wholesome goodness of plant-based foods. Tea is often mentioned as aremedy for a wide range of health issues.
This is why green tea is often the base chosen forfunctional and condition-specific teas.
Green tea is also used extensively in researchstudies on heart health, diabetes, cancer, stroke and dementia. A recent studyused tea as a natural remote-control to trigger cell-based therapies inanimals. Researchers at Shenzhen University used protocatechuic acid, acomponent of green tea, to activate lab-made cells for treating diabetes. Intests insulin levels rose in mice given concentrated doses of green tea andblood sugar levels fell. Subsequent tests in monkeys show promise of humanrelief from diabetes.
Green tea is so commonly consumed in Asia that itshealth benefits are underappreciated, according to Fortune Business Insights. “Thelack of awareness about the benefits of green tea consumption, especially indeveloping nations, may hamper the global market in future,” according to themarket researchers.
“Consumersare shifting their focus toward a more holistic approach to health care, brandsand companies need to ensure that they are looking at their products andservices with the same view,” Amrutha Shridhar, a research consultant atEuromonitor told Food Business News.
Shridhar describes a new Euromonitor study that reveals when it comes to healthconsumers have shifted their focus away from physical ailments and toward amore holistic approach that includes mental and emotional well-being.
Euromonitor surveyed 20,000 consumers in 20 coremarkets around the world to find the top criteria for being healthy is nolonger fitness.
Asreported by Food Business News: “Respondents identified stress andanxiety as the biggest threat to mental and emotional health. Thirty percent ofU.S. consumers said they are taking active measures to treat the issue. Ratherthan seeking treatment through over-the-counter medicines, however, manyconsumers have started to find relief through dietary changes and a more activelifestyle. Products that feature perceived calming ingredients, like green teaextract used for relaxation, are likely to do well with consumers seeking toimprove their mental health, the study found.”
While the green tea market globally is highlyfragmented, Euromonitor International notes that “the potential for growth ishuge, thanks to green tea’s health benefits.”
Source: Worlds TopExports, Tea MarketAnalysis, EuromonitorInternational, Food BusinessNews, TeaAssociation of the USA, US Census Bureau