US Tea and RTD Tea Market Report 2022
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Description
This report provides comprehensive and current information and analysis of the tea and RTD tea market including tea and RTD tea market size, anticipated market forecast, relevant market segmentation, and industry trends for the tea and RTD tea market in the US.
Current market landscape
Consumer interest in targeted functionality within the tea and RTD tea space has taken a backseat to affordability and general health concerns as consumers continue to ride out supply chain and inflationary disruptions to their purchase habits. As interest in functional benefits remained more or less stagnant from 2021- 22, prioritization of price in RTD teas rose from 40% to 50% while prioritization of affordability in brewed teas rose from 38% to 46%. Similarly, sweetener type rose from 32% to 40% in RTD teas, far ahead of 26% interest in functional benefits.
Inflation’s looming presence over consumers’ shoulders in grocery purchase decisions is distracting even if tea itself represents a relatively economical, high-demand choice stable against pricing volatility. While tempting to dismiss as white noise, inflation does represent a symptom of a larger complex issue – the global supply chain chaos that has the potential to poison tea at its largely global production roots.
Market share and key industry trends
Tea category sales are settling back into familiar tepid growth, with 2022-27 sales more closely resembling pre-pandemic patterns. Inflation is behind much of the category’s projected sustained momentum in 2022 (4.3%) and 2023 (2.2%). Consumers spent nearly 7% more on tea in 2020 in line with the emergence of COVID-19 followed by a 1.7% decrease in 2021, and are expected to spend an additional 3.2% in 2022 due to inflation. Tea’s relative affordability, along with strong connections to routine, suggest the category and its brands are well positioned to maintain steady engagement in category users despite ongoing financial volatility. However, tea’s correlation with age means that brands will need to appeal to younger consumers as demographic distributions change in order to sustain sales volume through 2027 and beyond.
Future market trends in tea and RTD tea
One of the biggest opportunities within the tea and RTD tea market is to lean into consumer’s primary motivation for drinking tea – flavor. Innovation or added ingredients that deliver new flavor experiences will expand tea repertoires and frequency, whether by attracting interest of seasoned tea drinkers through sophisticated new flavor layerings or by decreasing intimidation among less engaged users through hybrid crossovers. Offering affordable, tasty teas is the recipe for securing a coveted role in consumers’ tea drinking routines; secondary motivators, like added functionality, only sweeten the deal.
Read on to discover more about the tea and RTD tea consumer market, read our US Coffee and RTD Coffee Market Report 2022, or take a look at our other Drinks research reports.
Quickly understand
- Market factors influencing the tea and RTD tea market.
- Successful tea and RTD tea brands, marketing strategies and innovation opportunity areas.
- Tea and RTD tea consumption types and purchase formats.
- Motivations for tea and RTD tea consumption.
- Important tea and RTD tea attributes and barriers to drinking.
- Interest in functional benefits.
- Attitudes toward tea.
Covered in this US tea and RTD tea market report
Brands include: Pepsi Lipton, Coca-Cola, Dr. Pepper Snapple, Hornell Brewing Co, Milo’s Tea Company, Unilever, Millennium Products, Bigelow Tea Company, The Hain Celestial Group, Twinings, Tazo, Pukka, Yogi, Traditional Medicinals, Pure Leaf, Brisk, AriZona, Gold Peak, Milo’s, Snapple, GT’s, Kraft Heinz, Crystal Light, 4C, ZOA, Chillogy, Sparkling Botanicals, Joyba Bubble Tea, Teakoe Fizzy Tea, CULT Botanical, Harney & Sons, Par Avion, Rishi Tea.
Expert analysis from a specialist in the US tea and RTD tea market
This report, written by Adriana Chychula, a leading analyst in the Food, Drink, and Nutrition sector, delivers in-depth commentary and analysis of US tea and RTD tea market research to highlight current trends and add expert context to the numbers.
Tea’s time-honored roles in both the wellness space and many consumer routines secures demand in the face of pricing volatility, though inflation’s blanket presence over grocery purchase decisions may amplify – and redirect – consumers’ value appraisals. A category comfortably basking in its health halo, tea and tea drink brands are reminded to zoom out from function-specific promises and lean into the broader experience of enjoying a cup of tea, deepening engagement by focusing on flavor innovations that turn curious trial into established routines.
Adriana ChychulaFood, Drink, and Nutrition Analyst
Table of Contents
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Overview
- What you need to know
- This Report looks at the following areas
- Definition
- Market context
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Executive Summary
- Top takeaways
- Market overview
- Figure 1: Total US sales and fan chart forecast of tea and RTD tea, at current prices, 2017-27
- Figure 2: Category outlook, 2022-27
- Opportunities and challenges
- Tea’s flavor: a blessing and a curse
- Figure 3: Barriers to tea drinking, 2022
- Expand tea beyond its time-tested image
- Figure 4: Tea attitudes, 2022
- Create a multisensory experience that encourages mindful sipping
- Figure 5: Tea consumption motivations, 2022
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Market Size and Forecast
- Inflation to keep tea and RTD tea sales from completely cooling off
- Figure 6: Total US sales and fan chart forecast of tea and RTD tea, at current prices, 2017-27
- Figure 7: Total US sales and forecast of tea and RTD tea, at current prices, 2017-27
- Inflation to keep tea and RTD tea sales from completely cooling off
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Segment Performance
- RTD teas carrying lion’s share of market
- Figure 8: Total US retail sales and forecast of tea and RTD tea, by segment, at current prices, 2017-27
- Sustained grocery 2020 gains point to new habits, opportunities
- Figure 9: Total US retail sales of tea and RTD tea, by channel, at current prices, 2017-22
- RTD teas carrying lion’s share of market
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Market Factors
- Conflict in Ukraine attacks global tea production at its roots
- Figure 10: Major global fertilizer suppliers, potassium
- Tea brands challenged to show true ethical colors
- Tea sits high on holistic health pedestal
- Figure 11: Tea attitudes, 2022
- Conflict in Ukraine attacks global tea production at its roots
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Market Share/Key Players
- Major name brands maintaining tea and RTD tea category dominance
- Sales of tea and RTD tea by company
- Figure 12: Multi-Outlet sales of tea and RTD tea, by leading companies, rolling 52 weeks 2021 and 2022
- Brewed tea brands: communicate value beyond health halo
- Figure 13: Multi-Outlet sales of bagged, loose leaf, single cup tea, by leading companies and brands, rolling 52 weeks 2021 and 2022
- Wholesome sweet flavor wins in RTD tea space
- Figure 14: Multi-Outlet sales of RTD & refrigerated tea, by leading companies and brands, rolling 52 weeks 2021 and 2022
- Figure 15: Milo’s Facebook post, 2022
- Emerging brands in instant tea prove market share is up for grabs
- Figure 16: Multi-Outlet sales of instant tea mixes, by leading companies and brands, rolling 52 weeks 2021 and 2022
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Competitive Strategies and Market Opportunities
- Meet contemporary needs through complex flavors, functions
- Category crossovers shake up tea routines
- Figure 17: ZOA Energy Facebook post, 2022
- Brands venture into NFTea space
- Figure 18: Snapple Facebook post, 2022
- Figure 19: Glassface Instagram post
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The Tea and Tea Drink Consumer: Fast Facts
- Convenience is not a major differentiator for all tea drinkers
- High-level health targets cast a wide net
- Routine reigns as major influencer of tea consumer base
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Tea Format Consumption
- Self-brewed teas remain go-to teas
- Figure 20: Tea consumption, 2022
- Figure 21: Tea drink consumption, 2022
- Younger consumers have broader tea format ranges
- Figure 22: Tea drink consumption, by age, 2022
- Figure 23: Tea drink releases, 2022
- Reconnect bagged teas to healthy aging
- Figure 24: Bagged tea consumption, by age, 2021-22
- Figure 25: Lipton T+Probiotic
- Self-brewed teas remain go-to teas
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Tea Types Consumed
- Consumers most engaged with mainstream, flavored teas
- Figure 26: Tea type consumption, 2022
- Diverse tea type repertoires associated with deeper category engagement
- Figure 27: Tea format repertoire, 2022
- Consumers most engaged with mainstream, flavored teas
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Motivations for Tea Consumption
- Tea drinking is about experience first, function second
- Figure 28: Top tea and gut health hashtags, 2020-22
- Figure 29: Tea consumption motivations, 2020-2022
- Men motivated by energy balance
- Figure 30: Tea consumption motivations, male, by age, 2022
- Functionality appeals to younger women
- Figure 31: Tea drinking motivations, female, by age, 2022
- Tea drinking is about experience first, function second
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Important RTD Tea Attributes
- Price, broader health concepts gain power as differentiating RTD factors
- Figure 32: Important RTD tea attributes, 2021-22
- Affordable satisfaction wins consumers in RTD tea space
- Figure 33: TURF analysis – Important tea choice factors: RTD, 2022
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- Figure 34: Table – TURF analysis – Important tea choice factors: RTD, 2022
- Figure 35: Flavored tea examples, 2022
- Price, broader health concepts gain power as differentiating RTD factors
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Important Brewed Tea Attributes
- Brand names carry less significance with brewed teas
- Figure 36: Important brewed tea attributes, 2021-22
- Flavor, high quality perceptions lead brewed tea selections
- Figure 37: TURF analysis – Important tea choice factors: brewed tea, 2022
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- Figure 38: Table – TURF analysis – Important tea choice factors: brewed tea, 2022
- Figure 39: Brewed tea introductions, 2022
- Brand names carry less significance with brewed teas
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Barriers to Tea Drinking
- Tea has a steep barrier to engagement in noncategory users
- Figure 40: Barriers to tea drinking, 2022
- Tea has a steep barrier to engagement in noncategory users
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Interest in Functional Benefits
- Position brewed teas as plant-based medicine
- Figure 41: Brewed tea introductions, 2022
- RTD teas can lean into energy drink parallels
- Figure 42: Interest in functional benefits by tea format, 2022
- Position brewed teas as plant-based medicine
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Tea Attitudes
- Intentional wellness endeavors carve permanent space for tea
- Figure 43: Tea attitudes, 2022
- Reach timid consumers through hybrid introductions
- Figure 44: Tea attitudes, by tea format consumption, 2022
- Intentional wellness endeavors carve permanent space for tea
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Appendix – Data Sources and Abbreviations
- Data sources
- Sales data
- Forecast
- Consumer survey data
- Social media analysis
- Abbreviations and terms
- Abbreviations
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Appendix – The Market
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- Figure 45: Total US retail sales and forecast of tea and RTD tea, at inflation-adjusted prices, 2017-27
- Figure 46: Total US retail sales of tea and RTD tea, by segment, at current prices, 2020 and 2022
- Figure 47: Average annual household spending on tea and RTD tea, 2017-22
- Figure 48: Total US retail sales and forecast of bagged, loose leaf, single cup tea, at current prices, 2017-27
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- Figure 49: Total US retail sales and forecast of bagged, loose leaf, single cup tea, at inflation-adjusted prices, 2017-27
- Figure 50: Total US retail sales and forecast of RTD & refrigerated tea, at current prices, 2017-27
- Figure 51: Total US retail sales and forecast of RTD & refrigerated tea, at inflation-adjusted prices, 2017-27
- Figure 52: Total US retail sales and forecast of instant tea mixes, at current prices, 2017-27
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- Figure 53: Total US retail sales and forecast of instant tea mixes, at inflation-adjusted prices, 2017-27
- Figure 54: US supermarket sales of tea and RTD tea, at current prices, 2017-22
- Figure 55: US sales of tea and RTD tea through other retail channels, at current prices, 2017-22
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Appendix – TURF Methodology
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