Welcome to part 2 of our two-part series, The Evolution of Iced Tea. In this installment, we'll take a look at the current state of today's iced tea market.
Did you miss part 1? Read it here!
According to a recent report from Mordor Intelligence, in North America, the RTD tea market is expected to grow at a Compound Annual Growth Rate (CAGR) of 4.65% per year between 2025 and 2030, reaching $18.96 billion, with online channels being a key driver of growth. Online sales are projected to experience an annual growth of approximately 7%, annually, from 2024 to 2029.
The RTD space is so attractive that Pepsi has also gotten into the act with a brand called Pure Leaf Tea – a partnership with Lipton – which boasts a range of flavors including unsweetened, sweet, and even extra sweet tea – all in their black variety (perhaps trying to cover the entire taste spectrum). They also have, uniquely, an unsweetened Darjeeling flavor.
In 2022, Pure Leaf introduced a sweet tea that boasted no sugar and zero calories. Made from fresh black tea, creating a woody aroma, Pure Leaf contends it carries the "perfect level of sweetness."
"Bringing our first-ever Zero Sugar Sweet Tea product to market has been a long time coming," says Julie Raheja-Perera, general manager, North America, Pepsi-Lipton Partnership. " We wanted to make the delicious taste of sweet tea happen without sugar, while keeping Pure Leaf's standards of real, freshly brewed tea that consumers have come to know and love.”
What is not emphasized, however, is that the sweetness in the zero-sugar tea comes from sucralose, which is not a natural product. The sweetener is often retailed under the brand name Splenda (although Splenda contains only a small amount of sucralose due to concerns over toxicity, the rest being maladextrin, a form of corn sugar). Once thought to have no effect on glycemic index, a study published in the journal Diabetes Care discovered people who consume sucralose are 36% more likely to develop metabolic syndrome (a cluster of diseases including heart disease, stroke, and high blood sugar). Their risk of developing Type 2 diabetes is 67% greater. So, the health claims associated with Pure Leaf’s Zero Sugar Sweet Tea are contestable.
There is a compelling reason for making such claims: According to Innova Market Insights, one fourth of consumers opt for reduced sugar claims when purchasing iced tea. Similarly, 25% indicate that the innovation of products is of utmost importance to them. More than half of consumers view transparency and honesty as paramount to their diets.
Moreover, The Kerry Group, an Ireland-based food and ingredients company, commissioned a study in 2022 on summer beverages, and found that while internationally the choice of drink may vary, health and sustainability ranked very prominently among factors influencing brand choice.
Despite concerns over sucralose, perhaps with the aid of PepsiCo’s well-oiled marketing machine, Pure Leaf Tea has successfully positioned itself as a healthy tea-based beverage: Its market share comes in just behind AriZona, which tops the list, according to a report by Evidnt released in September 2024.
The FDA-Certified Healthy Iced Tea
As far as health and sustainability are concerned, Tejava goes further than any other product. Produced by Japanese company, Crystal Geyser Water Company, a subsidiary of Otsuka Holdings, a healthcare company with an emphasis on functional foods and beverages that support people's well-being, Tejava contains no sweeteners or preservatives. Indeed, the company calls Tejava – The Unsweetened Tea Beverage.
Otsuka Foods, under the same corporate umbrella as Crystal Geyser Company, were in the nascent stages of developing a non-alcoholic beverage that might complement a meal when its president, while visiting a pharmaceutical research institute in California, attended a reception where he was served unsweetened iced tea with his meal. Struck by how well it accompanied the food, the idea of creating an unsweetened ready-to-drink (RTD) black tea beverage took root in his mind.
After the trip, significant research was conducted to bring the concept to market during which the research team became exposed to tea leaves from the island of Java, Indonesia (known more for coffee cultivation). They found the leaf variety on the island to carry a bold and naturally sweet flavor; hence, they decided to make the farms of Java the sources of their leaves. The drink, which emerged from this process was called “Java Tea” in honor the key ingredient. While the original beverage was launched in Japan in 1989, its American counterpart called Tejava first hit became available in 1991.
“In recent years, we've noticed an increase in the number of people who want to incorporate unsweetened tea into their daily lives,” says CEO Masamitsu Kitada. “We believe that this is a result of growing health consciousness.”
Compared to the rest of the iced tea market, Tejava would likely be considered a specialty drink, outside the mainstream. Their market mainly covers the West Coast of the USA, and the product was re-launched in 2017 from glass bottles to a BPA-free plastic PET bottles for ease of portability, and this may have helped sales.
“Currently, our primary geographic area of distribution is in the West with a focus on California,” Kitada says, noting they plan to stay focused on the American market, slowly moving Eastward. “Considering the evolving perceptions of health among U.S. consumers and the demand for high-quality unsweetened black tea beverages, we want to bring the unique benefits of Tejava to consumers across the United States.”
Tejava’s unique selling point is their commitment to authenticity and simplicity. The beverage has two basic ingredients: water and tea leaves. For their fruit-flavored teas, they use natural flavorings. “Our ready-to-drink teas stand apart from the competition from a quality standpoint due to our proprietary manufacturing process, which allows for a shelf-stable product without use of added preservatives. We are a one-of-a-kind, unsweetened ready-to-drink black tea. We don’t use or need to use unnecessary or hard to pronounce ingredients,” Kitada explains.
The company does not consider Tejava to be a niche product despite others (mainly competitors) characterizing it as such. Rather, from the company’s perspective, their reach will extend as a gradual lifestyle shift towards healthier beverages manifests, nationwide. The Kerry Report mentioned above seems to support their vision.
“In a market saturated with sugary beverages, Tejava offers a refreshing alternative for health-conscious consumers who value simplicity and authenticity,” Kitada says, adding: “While, sweetened tea holds a significant share of the U.S. market, when you consider our vision of being a beverage that complements any meal and supports a healthy lifestyle, the value of being unsweetened becomes clear. We expect that Tejava, as an unsweetened tea, can play a role in supporting a healthy daily diet, just like water and other beverages.”
Unlike other ‘healthier’ tea product lines, which use green tea and other teas, Tejava’s focus on using only black tea has to do with customer preferences. Despite green tea’s growing popularity as a health beverage, black tea still accounts for 84% of the tea consumed in the Unites States. Globally, the figure is around 78%.
With the US Food & Drug Administration (FDA) having revised its definition of what can be labeled as a 'healthy' food or beverage this past February to include tea if it contains 5 calories or less per serving without added caffeine, Tejava looks forward promoting its product as an FDA certified healthy beverage. This is something to which the management of the company feels Tejava has a stronger claim than any other R-t-D beverage.
One of the key challenges of producing a product that is so natural that it uses just leaves and water is that adverse weather conditions and other environmental factors, can impact the taste of the product by affecting the size of the leaf harvested or tea chop quality as the company puts it.
“Leaf size can have a significant impact on taste based on how it interacts with hot water during extraction,” says Kitada. “We always consider the complexity of the human palette, which laboratory equipments [sic.] cannot match, by weighing in the feedback of our multi-faceted tasting team.”
Moreover, the company is deeply concerned about climate change. “In the medium-to-long term, climate change could make it difficult to maintain the quality of our natural product, our tea leaves, and this could affect the taste, which might be a threat. Therefore, we believe that continuous quality management is crucial,” Kitada says.
Tejava sources their tea leaves from Rainforest Alliance Certified farms, which aims to promote more sustainable farm management by incorporating a range of environmental, social, and economic standards, including water and soil conservation, wildlife protection, housing and healthcare for farm workers, protections of workers from exploitative practices, and access to education for their children.
From a taste perspective, the company has earned recognition, winning prizes nine times at World Tea Expo's Global Tea Championship, including earning a gold medal in 2017 in the category of Straight Black Ready-to-Drink (RTD) iced tea. (The competition is held each year at the World Tea Expo and managed by the parent company of World Tea News.)
Bubbles and Foam
For those, beginning with Brits, who imagine what it’s like to drink cold tea with bubbles, they won’t have to do so for long: carbonated iced tea will soon be available to experience. In April 2025, the venerable British company, Twinings, founded in 1706, announced that it will be launching a sparkling iced tea beverage to complement their iced tea coolers, launched in March – a bold innovation for an age-old company.
According to Twinings, the new beverage will come in three fruit flavors, each with “unique properties to encourage positive wellbeing.”
This latest evolution in beverage development responds to consumer demand for a “fresh, new way” to enjoy tea. “Consumer testing of the Sparkling Tea found that 9 out of 10 who sampled said they would recommend the product to a friend after trying, commenting that it far exceeded their expectations,” the company said in a press release.
“Our new ready-to-drink product means [consumers] can enjoy the feel-good taste of Twinings wherever they are," says Gill Close, marketing director for Twinings UK & Ireland.
It, therefore, seems that portability is key to Twinings’ new strategy in the RTD segment, coming out with cans, which will be sold for £1.89 (approximately $2.00 US). They are also selling the cans in cases of six for £5.99 – offering a significant discount per can.
Although Twinings has positioned their new RTD carbonated beverage in the healthy beverage segment as indicated by stocking it on Holland & Barret UK, the drinks do contain artificial preservatives and are sweetened the same way fruit juices are – with concentrated juice. That’s still better than adding sugar and its substitutes, especially high-fructose corn syrup.
Cold brew innovation, however, doesn’t stop at bubbles: In Australia, a relatively new and nimble company called East Forged Pty. Ltd., co-founded by two veterans of the Australian tea industry, Tania Stacey and Kym Cooper, is taking the bar scene by storm by not stopping at mere carbonation.
While the pair had been tea retailers and specialists in Australia, Stacey demonstrated a particular knack for creating tea-based beverages, winning tea brewing competitions both locally and in Shanghai, China – a result of her long experience in studying Taiwanese tea and its culture. Her prized drink in Australia was a yellow tea paired with a Taiwanese red oolong with a Greek sour cherry in the presentation; in China it was an aged Baozhong tea with elements of beetroot and citrus – preparations that one might come across at high-end restaurants, which are leveraging tea in their menu offerings.
Stacey recounts the genesis of East Forged taking place at the Melbourne International Coffee convention where she had met Kym through the parochial tea community in Australia, with both lamenting that the same kind of event hadn’t been organized for tea. (They each live in different cities with Tania residing in Victoria and Kym living in Queensland – a distance by air of around 1,150 miles!)
Although they were very different as people, their approach to tea was “likeminded” as Stacey puts it – and their professional relationship blossomed, despite the physical distance between them. Increasingly, their interactions landed on creating something new and revolutionary in tea. They determined that this had to be in the cold beverage category – but not necessarily in the already saturated iced tea space.
“Where coffee had created this perfect on-the-go cup in Australia everyone grabs – that flat white… there's no perfect on-the-go tea beverage to our mind – that isn’t full of sugar or tastes like fruit juice,” she recalls them concluding.
Their reticence in merely becoming another inhabitant of the iced tea space represented a desire to reflect the diversity of Australia in the drink. “The iced tea on offer, in the world, we felt, didn’t reflect the diversity and the opportunities we have over here with some of the fruits that are out there – and especially here in Australia,” Stacey asserts. “We have Yuzu [a type of citrus fruit] here; we grow Calamansi [generally thought of as a hybrid of cumquat and mandarin fruit]; and we’ve actually been growing red dragon fruit for a long time as well. So, we really thought it was a great way of reflecting Australia in the beverage instead of simply black tea and lemon.”
Having developed a range of flavors featuring Australian fruits to combine with tea, they felt the drink needed something more profound to differentiate it from other beverages.
“First and foremost, we wanted to do cold brew because we wanted to show people that through cold brewing tea, it reduces the need for sugar or sweetness,” Stacey emphasizes.
Other companies had done this, so the pair felt another innovation was needed. “Cold tea is a very thin beverage; we need to add texture and body to it,” Stacey explains. “And that’s when we started to look to the gasses to become an ingredient as part of the beverage.”
They had considered full carbonation, but with carbon dioxide having a carbonic taste, it usually requires enhancing sweetness levels to compensate. So, they turned to nitrogen gas, which is odorless and tasteless but adds a unique structure to the drink. Also, when the bottles are uncapped and poured into a glass, the nitrogen tries to escape, mounting a nice head of foam on the top surface of the liquid, making it look like beer.
“The foam creates a silky-smooth drinking experience in terms of the mouth feeling,” says Stacey, adding: “It also captures the aroma of the tea, so you’re smelling as well as tasting as you drink it. Some people call it a sweetness but it’s not – it’s just a silky-smooth creaminess that you feel in your mouth.”
Iced Tea as an Alcohol Replacement
The beverage was launched in 2020 just as Covid-19 was causing lockdowns to be implemented, preventing people from going to restaurants and bars – the very locations where Stacey and Cooper expected their drinks to premier. So, they ramped up their online presence and conducted a lot of focus groups by sending out samples to people in the mail. Fortunately, prior to their launch, large-scale sampling in the tea community had already taken place at major tea festivals in Australia, so as their online visibility increased, a buzz had already been created.
East Forged hasn’t relied on social media the way other products have. As a new beverage with no comparable alternative, the customer really needs to appreciate the distinct nature of drink to form a bond of familiarity with it. It’s difficult to promote that sensory experience through words, pictures, or videos, though seeing the beverage being poured into a glass may well elicit a Pavlovian response among beer drinkers!
“Liquid on lips was more important to us,” Stacey claims. So, direct interaction with the public became paramount for market penetration. “Once Australia started to open-up [post-Covid] and the big designer maker-markets started, things started moving – because when you offer someone a drink at say a trade show, the reaction they have within the first five seconds of trying it is priceless. The sounds they make, the words they say – this helps to build a data bank that can be used for promotion in copy and ads.”
Stacey differentiates East Forged from iced tea by characterizing it as a social drink that’s “clean and crisp” whereas iced tea, she says is “more sweet and fruity.”
“And, probably, iced tea isn’t something you would have at a pub somewhere,” she quips.
With a new beverage, how retailers position it significantly influences public perception of the product – and this became a concern for the East Forged co-founders – where would they be placed on shelves? It worked out, in the end. “In supermarkets, we’re quite happy to be placed next to Boss Coffee, which is a premium Japanese coffee in a can – so we’re not considered a part of the retail iced tea segment, which is regarded as downmarket,” Stacey says.
East Forged uses high-quality tea leaves and other ingredients to create three flavors using three different teas, two of which are locally sourced – Australian Black, Australian Green, and Chinese White tea.
It takes three days to make a batch of East Forged. First, the tea leaves are steeped in cool water for 12 hours and then filtered. With the leaves removed, juice and light carbonation is added. Another layer of filtration for the liquid mix takes place as the cans are filled and dosed with nitrogen.
Conscious of sustainability, Stacey and Cooper ensure that the spent leaves are given to a local vegetable garden to be used as compost.
East Forged has won many accolades; notably, it stood as a finalist in the Innovation Category at the World Tea Expo Global Tea Championship in 2021.
What Stacey and Cooper find especially satisfying is that they’ve created something that appeals to people who want to moderate or stop their alcohol consumption, not only in a way that is unique and involves tea, but also fits well with the milieu of going out for a drink.
“I was at a Royal Easter Show in Sydney [mainly an agricultural event celebrating Australian culture, held during Easter], and I came across a number of younger people and some older people saying they wanted to moderate on alcohol, and they had tried the non-alcoholic beer – and it just wasn’t doing it for them,” Stacey recounts, continuing: “So, they said to me, ‘but we love this [East Forged] because you’re not trying to be a beer, and it’s such a social drink, anyway.’ That’s what we were trying to achieve. So, it was really satisfying to get that feedback.”
It's an experience, they hope will spread far and wide across the continent.
While tea-based brews have come a long way since the World’s Fair of 1904, recent innovation in the RTD sector, like that of East Forged, pay some homage to Commissioner Blechynden's original innovation. After all, it was the feeding of hot tea through iced metal pipes that got the whole thing started on a mass scale.
Today’s RTD offerings are a result of a natural evolution of thinking about how tea can be the basis of a variety of refreshing, often healthy, cold beverages that a consumer can enjoy at a venue or take with them virtually anywhere.
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