Market researchers at the onset of the year publish forecasts on various segments of the tea industry. Companies that produce these reports include Euromonitor, Mintel International, Nielsen, IRI (Information Resources, Inc.), and Packaged Facts, as well as specialized ventures: Statista, Fact.MR, and Technavio. World Tea News reviewed market reports, executive summaries, press releases, and email correspondence submitted by several market researchers to compile the following overview for 2019. Forecast periods are generally five years. The review excludes reports on tea extracts, tea essence, teaware, solubles, and green tea supplements. Global Hot Drinks Euromonitor predicts cautious optimism with more than half of the beverage professionals in its Industry Insights panel indicating that the sales value in their category in 2022 will be at least 5 percent higher than 2018. Bullet points include:
- E-commerce and internet retailing, sustainable packaging and ethical/fair trade sourcing are expected to be the most influential trends impacting sales in the coming year.
- On average 42 percent of industry professionals cite coffee pods/capsules, single-origin/single-region products, and green tea/matcha as the most successful product launches in the past year.
- There is a growing awareness for innovative health beverages beyond coffee and tea – organic, natural and healthy drinks are very much in trend these days (matcha, turmeric, moringa).
Global Tea MarketThe global tea market is estimated to increase incrementally by $12.62 billion during the period 2019-2023, accelerating at a nearly 5 percent compound annual growth rate, according to Technavio research. Bullet points include:
- Year-over-year growth for 2019 is estimated at 4.48 percent
- Most of the growth (58 percent) will be in the Asia-Pacific region
- Consumption and production are strongly correlated. During the period 2007-2016 production grew 4.4 percent according to the United Nation’s FAO. Consumption also rose by 4.4 percent during the same period. Tea producing countries are now among the largest consumers of tea.
- The global market for tea at retail is expected to grow by $7.9 billion between 2017 and 2022, with an average rate of expansion of 4 percent annually in real terms (better than either coffee or other hot drinks).
- Global consumption of tea is forecast to reach 3.3 million metric tons in 2021 with well over half of this growth in Asia
- The top three markets for tea by per capita consumption are: Turkey, Ireland and UAE but China, India and Pakistan consume the most tea. More than half of global tea consumption is in Asia.
- The top three cold tea markets by total RTD volume are China, Japan, and the U.S.
- The top three hot tea markets by total brewed volume are China, India, and Russia.
Bottled TeaIn the U.S. ready-to-drink (RTD) tea accounts for about 80 percent of the tea category by value, up by 4 percent since 2015. RTD was the top beverage category in dollar growth, showing a 18.9 percent dollar increase in 2017, according to Nielsen market research. It is was the second year in a row that iced tea gained share. RTD now holds a 5.9 percent share of dollar sales in the U.S. convenience channel, up 3.5 percent in value and 3.1 percent in unit sales compared to declining unit sales of soda, bottled water, sports drinks and juice, according to Nielsen. Carbonated soda’s dollar share of sales declined 5.7 percent during the same period. The hospitality industry (HORECA) has gained significant momentum in the past decade given the increasing propensity for consumers to purchase food offerings prepared outside the home. Tea can be the perfect to-go beverage for consumers as the hospitality segment experiments with pop up restaurants, fast casual dining experiences, here-to-stay café and all-day breakfast. A growing interest in this segment by the Consumer Packaged Goods industry seeking to boost revenue has, in turn, increased sales of bottled tea. Fact.MR identified these trends and assessed their impact by region. Bullet points include:
- Attacking Snacking – Increased consumption with snacks is a key growth area for tea industry
- Tapping Teetotalers – Tea-based mocktails are popular with those abstaining from alcohol
- Café chains – Re-evaluating their tea offering to meet consumer desire for specialty beverages
- Green tea – Interest in green tea with fruit and herbal blends are growing
- Teatox – Celebrity endorsements and social media advertising is attracting millennials.
Oolong TeaThe global oolong tea market is fragmented and, as the market is in a growth phase, competition among companies is intense. This is why the oolong tea market is expected to post a compound annual growth rate of more than 3 percent through 2023, according to Technavio. Oolong is popular in Asia and Pacific Rim countries which consume the greatest quantity by far. Domestic markets in the Middle East and Americas trail at 2 percent or lower penetration. Traditional loose leaf, in a range that extends from lightly fermented green to roasted dark, retains the largest share of the segment at 70 percent. But convenient bottles and cans and wider distribution are largely responsible for accelerating sales. “A key driver for the global oolong tea market is the increasing accessibility and availability through organized retailing. Convenience products such as ready-to-drink oolong tea, oolong tea blends, and mixes are mainly sold by large and organized retailers and the vendors in the global oolong tea market distribute their products mostly through such retailers,” writes Technavio. Bullet points include:
- Incremental growth of $316.3 million in sales of oolong through 2023.
- Majority of the convenience products such as oolong tea blends, ready-to-drink (RTD) oolong tea, and oolong tea mixes are sold through large and organized retailers
- Asia and the Pacific region remain the dominate market for oolong