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Report
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While tea is a staple in most US households, there are areas where it underperforms and opportunities to push it further into the spotlight. Valued at $10.3 billion, the tea…
"Tea has everything it needs to thrive, yet is often overlooked in the competitive BFY market. Highlight tea's flavor range, health perks and unmatched convenience and value."
Julia Mills - Food & Drink Analyst
US Tea Market – Trends and Insights
Tea remains a staple in most US households. The US Tea market is valued at $10.3 billion, with market growth projected over the next five years. However, much of this growth is expected to stem from price increases rather than a significant rise in demand.
A key challenge for tea is overcoming consumers’ limited perceptions of its potential. While often seen as a comforting drink, tea has untapped opportunities as a remedy for physical and mental health, a flavor enhancer in creative beverages, and a versatile ingredient in cooking.
To expand tea’s appeal, brands must inspire consumers to think beyond traditional uses and explore its broader possibilities, breaking free from narrow associations.
Younger generations are entering the tea market with curiosity and a willingness to experiment, offering brands a chance to innovate and align their messaging and promotions with these fresh perspectives.
With the right strategies, tea has the potential to evolve beyond its traditional roots, capturing the interest of a broader audience and solidifying its place as a dynamic and versatile product.
Key Topics Analyzed in the Report
Types of tea consumed
Formats of tea consumed
Changes in behaviors with tea
Motivations for tea purchase
Occasions associated with different kinds of tea
Factors of importance when choosing a healthy tea
Attitudes toward tea
Trends in launch activity for tea, and opportunities for further innovation
Report Attributes
Details
Published Date
August 2025
Data Range
2019 – 2030
Measurement Metrics
Revenue in US $
Country Focus
United States of America (USA)
Consumer Data
1,695 internet users aged 18+, May 2025
Number of Pages
110
Market Segmentation
Bagged Tea, Loose Leaf Tea, Single Cup Tea, Ready-to-Drink (RTD) Tea, Refrigerated Tea, Instant Tea Mixes, Kombucha, and Powdered Tea Mixes
Leading Companies in the US Tea Market
Pepsi Lipton, Hornell Brewing Co Inc, Milo’s Tea Company, The Coca-Cola Company, Millennium Products Inc, CVC Capital Partners, Bigelow Tea Company, Keurig Dr Pepper, The Hain Celestial Group Inc, Health-Ade LLC, Private Label, AriZona, Yogi Tea, Traditional Medicinals, and Tazo
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EXECUTIVE SUMMARY
What you need to know
Market size & forecast tea and RTD tea
Market predictions
What consumers want & why
Opportunities
It’s easier to connect health, rather than sustainability, to concrete benefits
Market launches of health teas lag behind consumer demand
Liber-tea and justice for all
Brands look closer to home for tea production
Encourage consumers to color outside the lines in tea use
Add a little creativi-tea to ideas for different occasions
Demystify tea with practical education and guidance
MARKET DYNAMICS
Market context
Market drivers
Tariff impact on tea
Modern tea market to face further hurdles in proving value
Consumers enjoy financial cushion, yet face persistent uncertainty
Graph 1: change in financial situation over the past 12 months, 2023-25
Graph 2: financial situation, 2025
Steep challenges are ahead for tea production
Could health teas help fill the gap left by Medicaid cuts?
Mental health conditions skew younger
Graph 3: mental health conditions experienced in the past 12 months, 2024
Young consumers focus on health now to age well later
Graph 4: attitudes toward long-term impact of health decisions, by generation, 2025
Graph 5: areas of their long term health that they are very concerned about, by generation, 2025
Trouble is brewing for matcha
Market size and forecast
Inflation and potential tariff-driven price increases will sustain sales
US tea market projected to hit $11 billion by 2030
Growth is stable, but volume sales may paint a different picture
Market segmentation
RTD teas outpace growth in other segments, bringing instant gratification to the category
Graph 6: total retail sales and forecast of tea and RTD tea, by segment, at current prices, 2019-30
Retail sales of tea and RTD tea, by segment
Convenience keeps demand hot for RTDs and refrigerated teas…
Graph 7: market share of tea, by segments, 2025
Graph 8: volume sale % change, by segment, 2021-24
…but convenience can come at a cost
Graph 9: price per unit of teas in MULO, 2021-25
Market share/brand share
Premium and value brands may better fill in the gap for consumers
Graph 10: market share of tea, by company, 2025
Graph 11: MULO sales of tea and RTD tea, by leading companies, rolling 52 weeks 2024 and 2025
Milo’s tea company surpasses competition with top sales growth
Ingredients targeting physical and mental health drive brands forward in the category
Traditional Medicinals drives 14% sales growth through health-focused solutions
Growth of brands like AriZona and Health-Ade show diverging strategies can succeed
Milo’s focus on simplicity and affordability drives sales growth at a significantly higher rate than the category
Instant teas offer the trifecta of convenience, affordability and quality…
…But, there’s certainly room for growth still
CONSUMER INSIGHTS
Consumer fast facts
User profiles
Tea drinkers engage with the brew in different ways
Overview of consumer groups
Tea drinkers interact with the category in different ways
Graph 12: attitudes by target segments, 2025
Using cluster analysis to segment tea consumers based on attitudes
Graph 14: cluster analysis of attitudes towards tea – casual sippers, 2025
Graph 15: “casual sippers,” by select demographics, 2025
Keep innovation and messaging grounded in the familiar for “casual sippers”
Wellness enthusiasts
Graph 16: “wellness enthusiasts,” by select demographics, 2025
Graph 17: cluster analysis of attitudes towards tea – wellness enthusiasts, 2025
Link ingredients to health solutions for “wellness enthusiasts”
Mindful connoisseurs
Graph 18: cluster analysis of attitudes towards tea – mindful connoisseurs, 2025
Graph 19: “mindful connoisseurs” by select demographics, 2025
Captivate “mindful connoisseurs” with innovation and stories behind tea production
Varieties of tea drinks consumed
What you need to know
Handhold consumers on an exploration beyond classic varieties
Tea consumption has steeped slightly lower than past years
Graph 20: types of tea consumed, 2023-25
18-44 year olds display the highest affinity for tea
Graph 21: types of tea consumed, by age groups, 2025
Younger consumers are still in the process of building their tea routines
Graph 22: repertoire of tea consumption, by age groups, 2025
Tea time is for the girls
Graph 23: types of tea consumed, by gender, 2025
Challenge the stereotype that tea is effeminate
Graph 24: repertoire of tea consumption, by gender, 2025
Types of tea drinks consumed
What you need to know
Traditional tea formats dominate as niche options struggle to gain ground
Graph 25: formats of tea consumed, 2024-25
Blend classic tea flavors in diverse formats to inspire new consumption habits
Graph 26: formats of tea consumed, by repertoire of tea consumption, 2025
RTDs become the new gateway to tea
Graph 27: formats of tea consumed, by generation, 2025
Different formats can be an affordable way to mix up drink experiences
Graph 28: formats of tea consumed, by financial situation, 2025
Shifts in tea consumption behavior
What you need to know
Tea ingrains itself deeper into at-home rituals
Graph 29: changes in tea behavior compared to a year ago, 2025
Tea drinkers elevate their experience through customization and health
Graph 30: changes in tea behavior compared to a year ago, 2025
Tea-lovers are core targets for innovation and creative use ideas
Graph 31: changes in tea behavior compared to a year ago, by repertoire of tea consumption, 2025
Brands face competition from foodservice to attract young consumers
Graph 32: changes in tea behavior compared to a year ago, by generation, 2025
Women’s connection with tea is strong and growing
Graph 33: changes in tea behavior compared to a year ago, by gender, 2025
Motivations for new tea trial
What you need to know
Consumers ground tea trial in familiarity
Graph 34: motivation for tea trial, 2025
Balance innovation and trust to draw in cautious tea drinkers
Graph 35: motivation for tea trial, by repertoire of tea consumption, 2025
Winning over younger consumers requires a multi-faceted approach
Graph 36: motivation for tea trial, by generation, 2025
Thrifty shoppers are still active in new tea trial
Graph 37: motivation for tea trial, by financial situation, 2025
Teas associated with occasions
What you need to know
Tea has strong connections with rest and relaxation
Graph 38: occasions associated with tea, 2025
RTDs, matcha and chai are carving out their space alongside classic flavors and formats
Graph 39: occasions associated with tea, 2025
Hot tea holds a lukewarm place in the lives of younger generations
Graph 40: occasions associated with hot brewed tea, by generation, 2025
RTDs vie for space in younger consumers’ days among a saturated, competitive market
Graph 41: occasions associated with iced RTD tea, by generation, 2025
Teas can fill the gap in morning occasions
Graph 42: teas associated with a “morning energy boost,” by generation, 2025
Women rely on herbal tea for their rest and care needs
Graph 43: occasions associated with herbal tea, by gender, 2025
Factors that make a tea healthy
What you need to know
Mental health benefits take precedence in tea choice
Graph 44: factors of importance in healthy tea choice, 2025
Tea formulations don’t have to be complex to be considered “healthy”
Young consumers prioritize health without sacrificing fun
Graph 45: factors of importance in healthy tea choice, by generation, 2025
Teas for women’s health empower personal wellness
Graph 46: factors of importance in healthy tea choice, by gender, 2025
There is a large gap in the market for brands to play in with women-focused teas
Graph 47: percent of tea and RTD tea launches, by select claims, 2020-24
Attitudes toward tea
What you need to know
Help consumers build off their already strong tea rituals
Graph 48: attitudes toward tea and RTD tea, 2025
Premium tea brands can stand out in a price-sensitive market
Graph 49: attitudes toward tea and RTD tea, 2025
Engagement with tea declines with age
Graph 50: attitudes toward tea and RTD tea – any agree, by generation, 2025
INNOVATION AND MARKETING STRATEGIES
Launch activity and innovation
Cafe-quality teas, now ready for home brewing
Premium tea drinks are made more affordable and easy with ready-to-make kits
Gut-health RTD teas venture into enemy territory
Graph 51: percent of CSD launches with select claims, 2020-25
Health claims make up only a small percentage of launches, but have a big influence on purchase
Brands link ingredients to health benefits for inside-out wellness…
…and mental wellbeing
Tea launches go cold
Global teas redefine convenience beyond traditional formats
Ethical claims help brands build trust, but this may not be enough for consumers
Connect sustainability with personal benefits
Graph 52: [no title]
Marketing and advertising
Pure Leaf invites consumers to enjoy a “tea break”
Brands slide tea into traditional alcohol moments
We have that at home…
Celestial sells a lifestyle and an aesthetic, not just tea
Sprite tea blends tradition and trend to redefine “tea time”
APPENDIX
Market definition
Consumer research questions
Market size methodology
Consumer research methodology
Generations
Abbreviations and terms
Forecast methodology
Forecast fan chart methodology
Data
Total retail sales and forecast of tea and RTD tea, at inflation-adjusted prices, 2019-30
Average annual household spending on tea and RTD tea, 2019-25
Total retail sales of tea and RTD tea, by segment, at current prices, 2023 and 2025
Total retail sales and forecast of bagged, loose leaf, single cup tea, at current prices, 2019-30
Total retail sales and forecast of bagged, loose leaf, single cup tea, at inflation-adjusted prices, 2019-30
Value, average price and volume of MULO bagged, loose leaf, single cup tea sales, 2020-24
Total retail sales and forecast of RTD and refrigerated tea, at current prices, 2019-30
Total retail sales and forecast of RTD and refrigerated tea, at inflation-adjusted prices, 2019-30
Value, average price and volume of MULO RTD & refrigerated tea sales, 2020-24
Total retail sales and forecast of instant tea mixes, at current prices, 2019-30
Total retail sales and forecast of instant tea mixes, at inflation-adjusted prices, 2019-30
Value, average price and volume of MULO instant tea mixes sales, 2020-24
Total retail sales of tea and RTD tea, by channel, at current prices, 2019-25
Total retail sales of tea and RTD tea, by channel, at current prices, 2023 and 2025
Supermarket sales of tea and RTD tea, at current prices, 2019-25
Convenience store sales of tea and RTD tea, at current prices, 2019-25
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