Tea Market Anticipated to Generate a Revenue of $67,920.8 Million, Growing at a CAGR of 6.6% from 2021 to 2028Download Sample Reports Overview
The global tea market is estimated to be valued at $67,920.8 million by 2028, surging from $54,322.1 million in 2020 at a noteworthy CAGR of 6.6%
Impact Analysis of COVID-19 on the Tea Market
The global market for tea is estimated to experience a negative impact amid the COVID-19 pandemic. The growth is declining amid the pandemic times due to supply chain disruptions, complete closure of manufacturing & production facilities due to lockdown restrictions, and shortage of labor. In addition, the import-export restrictions, availability of raw materials, and social distancing measures has negatively impacted the market growth during the pandemic. For instance, the Indian tea process has fallen significantly, as exports which is increasing the cost of production due to which the tea growers are facing huge losses. Iran, China, and Germany purchase tea from India. Due to the pandemic, many countries have banned the tea imports, and this has greatly affected the market demand and revenue. All these factors have greatly affected the tea market.
Various initiatives have been taken by the government, key vendors, and others to support the tea manufacturers amidst the pandemic. For instance, IDH Farmfit, the world’s largest private-public impact fund for smallholder farmers has introduced various initiatives during pandemic, such as in Malawi, a country in South East Africa, is supporting the smallholder farmers, by distributing PPE kits, sanitizers, making investments in kitchen gardens to provide food security to 4,000 smallholders farmers and their family. Furthermore, IDH is also working with Indian smallholder tea producers of Golaghat, Assam are subsidizing transport for small tea growers in Assam with suspected cases of COVID-19 so that the testing recommended by health practitioner can be done. These factors are estimated to create lucrative investment opportunities during the forecast period.
Global Tea Market Analysis
The enormous growth of the global tea market is mainly attributed to increase in health-conscious population and benefits associated with tea consumption. Tea is one of the widely consumed beverages across the world that refreshes your morning, boosts immune system, fights inflammation and can even ward off heart diseases and cancer. In addition, there are a variety of tea flavors available such as white tea, herbal tea, green tea, and others. For instance, green tea is extremely beneficial as it is high in flavonoids, that lowers the level of bad cholesterol, reduces blood clotting, lowers blood pressure. Moreover, its anti-inflammatory property keeps your skin clear and glowing. Black tea is the second most consumed beverage which is the source of antioxidants. The National Cancer Institute (NCI) states that the polyphenols present in black tea reduces the tumor growth thereby reducing the risk of breast, skin, lung, and other cancer types. In addition, black tea boost concentration and focus as it contains caffeine and amino acid L-theanine that improves focus and alertness. All these aspects are predicted to create a positive impact on the tea market growth during the forecast period.
The consumption of coffee which is a popular beverage can act as a substitute for tea. Coffee is also rich in caffeine and essential nutrients that helps in the fat burning process and boost the energy levels. It depends on the consumer preferences and choice which beverage they want to choose. This factor is estimated to hamper the market growth during the forecast period.
The launch of new tea flavors and decline in demand for carbonated drinks are estimated to generate huge opportunities for the global tea market in the upcoming years. For instance, The Republic of Tea, the California-based tea company offers a variety of tea flavors such as floral tea, berry tea, citrus tea, tropical tea, cinnamon tea, spicy tea, honey tea, ginger tea, and many others. Similarly, Tea Forté Inc., the American tea company offers wide variants of products under herbal tea, black tea, green tea, white tea, and others. For instance, the flavors included under herbal tea are Belgian mint tea, apricot amaretto, African solstice, and others. Various flavors under black tea are black cherry, black currant tea, blood orange tea, caramel nougat, and others. Different flavors under green tea are cucumber mint, green mango peach, and others. Furthermore, decline in demand for carbonated drinks that increase the risk of obesity, tooth decay, and others are estimated to drive huge growth opportunities in the global tea market.
Global Tea Market, Segmentation
The global tea market is segmented based on type, packaging, distribution channel, application, and region.
The type segment is further classified into green tea, black tea, oolong tea, fruit/herbal tea, and others. Among these, the black tea product type is anticipated to have the dominant market share and surpass $24,368.3 million by 2028, with an increase from $24,272.2 million in 2020. This is majorly owing to the benefits offered by the consumption of black tea as it is rich in antioxidants that removes free radicals and prevents cell damage. Also, they help in reducing the risk of chronic diseases such as heart ailments including high blood pressure, cholesterol, obesity, and others. For instance, as stated in May 2018, in Healthline, an online platform that provides health & wellness information, high blood pressure affects approximately 1 billion people globally that increases the risk of stroke, vision loss, heart failures, and others. Hence, the consumption of black tea would be beneficial in reducing the risk of heart ailments. All these factors are predicted to create positive impact on the black tea sub-segment throughout the forecast period.
The packaging segment is further divided into plastic containers, loose tea, paperboards, aluminum tins, and tea bags. The paperboards sub-segment is anticipated to have a dominating share in the global market and register a revenue of $26,199.5 million during the analysis timeframe. Paperboard’s packaging is widely used as it provides convenient storage option, it can be manufactured in different shapes & sizes, as well as it has minimum environmental impact compared to plastic and other container types. Also, paperboard is a biodegradable material and it can be recycled. It is engineered to make it sturdy material and also it is light weight packaging solution. All these factors are anticipated to generate lucrative revenue throughout the forecast period for the gender segment.
The distribution channel segment is further classified into hypermarket/supermarket, specialty stores, pharmacies, convenience stores, online stores, and others. Among these, the hypermarket/supermarket distribution channel is anticipated to have the dominant market share and surpass $27,286.1 million by 2028, with an increase from $21,462.6 million in 2020. Hypermarket/supermarket are large retail stores that offers variety of products from different brand under single roof with attractive discounts. Also, customers have the option of self-service and they can choose from various products that are kept in a sorted manner on the shelves. Furthermore, they offer ample amount of parking space and these stores operate under convenient timings. Hence, they save the shopping time of the customers by offering all the necessary goods under single roof. All these factors are predicted to create a positive impact on the hypermarket/supermarket sub-segment of the tea market throughout the forecast period.
The application is further classified into residential and commercial. Among these, the residential sub-segment is anticipated to have the dominant market share and surpass $60,344.5 million by 2028, with an increase from $49,387.9 million in 2020. This growth is majorly attributed to popularity of tea consumption at home that refreshes your mood in morning or after long working hours in office. Also, the benefits associated with tea consumption and availability of various flavors such as green tea, black, tea, white tea, oolong tea, and others are estimated to create a positive impact on the application sub-segment of the tea market throughout the forecast period.
The tea market for the Asia-Pacific region is projected to witness rapid growth. This region generated a revenue of $39,173.3 million in 2020 and is further projected to reach up to $51,650.0 million by 2028. This region is anticipated to grow rapidly owing to the presence of countries such as India, Japan, China that are the largest tea consumers in the world. In addition, increase in number of health-conscious population has attracted large number of people towards consumption of green tea, black tea, and other products. In addition, availability of different flavors and innovative packaging is anticipated to boost the demand for Asia-Pacific tea market during the analysis timeframe.
Key Players in the Global Tea Market
- Associated British Foods Plc.
- Barry's Tea Limited
- Hain Celestial Group, Inc.
- ITO EN, Ltd.
- McLeod Russel
- Nestlé S.A.
- Taetea Group
- Unilever Group
- Tata Global beverages
- The Republic of Tea, Inc.
Along with the company profiles of the key players in the market, the report includes the Porter’s five forces model that gives deep insights into the competitive environment of the market.
Porter’s Five Forces Analysis for the Global Tea Market
- Bargaining Power of Suppliers: The suppliers in tea market usually supply tea leaves as a primary raw material for manufacturing different types of tea. The product differentiation is less but there are small number of domestic and international raw material suppliers.
Thus, the bargaining power of the suppliers is high.
- Bargaining Power of Buyers: Buyers have low bargaining power, as the buyers are high in number that comprises of direct consumers who purchase tea for residential or commercial purpose. Also, the significant capital investment, climatic conditions are required for tea production that reduces the bargaining power of buyers.
Hence, the bargaining power of buyers is low.
- Threat of New Entrants: Startups entering this market have less legal barriers and government norms as tea production has less environmental impact. Also, the demand is high due to various benefits associated with the consumption of tea.
As a result, the threat of the new entrants is moderate.
- Threat of Substitutes: The availability of substitute product which is also popular beverage that offers various health benefits, increase the threat from substitution.
Therefore, the threat of substitutes is moderate.
- Competitive Rivalry in the Market: The ventures operating in the global tea market are focusing on strategies such as product launch, partnerships to meet the increasing demand for tea from various countries.
Therefore, competitive rivalry in the market is high.