US Tea and RTD Tea Market Report 2024
Tea should be performing better than it is. Despite its range of flavors, formats, and strong health positioning as compared to other drink categories, it's one of the smallest.
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Executive Summary
- What you need to know
- What consumers want & why
- Market size & forecast
- Market predictions
- Opportunities
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Market Dynamics
- Market context
- Market drivers
- Consumers need affordable ways to ease stress, boost energy
- While relaxation is key, consumers want an energy boost, among other benefits
- Graph 1: interest in better-for-you benefits, 2023
- Graph 2: interest in better-for-you ingredients, 2023
- Market size and forecast
- Inflation keeps tea market rising despite decline in consumption
- Retail sales and forecast of tea and RTD tea
- Market segmentation
- Benefit of convenience is seen in dominance/growth of RTD and refrigerated tea
- Graph 3: total retail sales and forecast of tea and RTD tea, by segment, at current prices, 2019-29
- Graph 4: total retail sales of tea and RTD tea, by segment share, at current prices, 2022 and 2024
- Retail sales and forecast of tea and RTD tea, by segment
- Channel distribution holds steady, growth in convenience channel tracks with growth in convenience options
- Graph 5: total retail sales of tea and RTD tea, by channel, at current prices, 2022 and 2024
- Market share/brand share
- Pepsi Lipton retains lead with 20% market share, Milo’s keeps climbing
- Graph 6: [no title]
- Sales of tea and RTD tea, by leading companies
- Growth of Milo’s and GT’s shows there’s room for both fun and functionality in the RTD tea segment
- RTD & refrigerated tea, by leading companies and brands
- Growth of Traditional Medicinals in bagged, loose leaf, and single cup tea segment points to interest in functionality
- Bagged, loose leaf, single cup tea, by leading companies/brands
- There’s a lot of room for movement in the tiny instant tea mixes segment
- 4C leans on portability and reduced sugar for instant success
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Consumer Insights
- Consumer fast facts
- Tea types consumed
- 83% of US adults drink tea
- Graph 7: tea types consumed, 2024
- Majority of tea drinkers stick to what they know
- Graph 8: repertoire tea types consumed, 2024
- Yogi Tea offers variations on a theme
- 25-44s are core tea drinking set
- Graph 9: tea types consumed, by age, 2024
- Women gravitate toward herbal tea; bolder options will resonate with men
- Graph 10: tea types consumed, by gender, 2024
- Liquid Death expands in the RTD tea space, could be a strong lead for welcoming more men into the category
- Tea formats consumed
- Bagged tea rules, but RTDs have a strong foothold
- Graph 11: tea formats consumed, 2024
- Tea drinkers are relatively experimental with tea formats
- Graph 12: repertoire tea formats consumed, 2024
- Men and younger tea drinkers gravitate toward convenience options
- Graph 13: tea formats consumed, by gender, 2024
- Graph 14: tea formats consumed, by age, 2024
- Habitual nature of tea extends to brands
- Graph 15: tea statements – habits, 2024
- Go big for younger drinkers
- Graph 16: tea statements – habits, by gender, 2024
- Graph 17: tea statements – habits, by age, 2024
- Perceptions of tea
- Tea has stronger associations with relaxation than energy; underperforms for taste
- Graph 18: tea perceptions, 2024
- Flavored tea scores highest for taste
- Tea has strong health ties. But don’t rest on those laurels
- Graph 19: tea statements – perceptions, 2024
- Drivers of tea choice
- Tea drinkers seek emotional support
- Graph 20: drivers of tea choice, 2024
- Republic of Tea x Calm collaboration puts focus on focus over frenetic
- Younger tea drinkers want a more dynamic tea experience
- Graph 21: drivers of tea choice – any rank, by age, 2024
- Motivations for increasing tea consumption
- Flavor variety encourages tea consumption
- Graph 22: tea statements – interest in tea innovation, 2024
- Graph 23: motivations for increasing tea consumption, 2024
- Blend the familiar with the up-and-coming to encourage trial
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Innovation and Marketing Trends
- Launch activity and innovation
- RTD and bagged/loose leaf launches lead with environmental claims. Functionality will be a stronger sell
- Graph 24: bagged, loose leaf, single cup tea launches, by leading claims, 2023-24
- Graph 25: RTD tea launches, by leading claims, 2023-24
- Instant tea mix launches wisely promote low/no claims
- Graph 26: concentrated (liquid) and instant/soluble tea mix launches, by leading claims, 2023-24
- Yogi Tea simplifies health messaging
- Clear communication will be needed to help consumers make informed decisions about how processed food and drink fit into their diets
- Emerging ingredients impart both flavor and function
- Marketing and advertising
- Lipton leans into self-care
- Tea-totalling is all the rage
- Opportunities
- Put the focus on focus over frenetic
- Talk about tea as a tonic
- Allow consumers to explore the world through tea
- Tea for toddlers and teens
- Look beyond the leaf
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Appendix
- Market definition
- Market size methodology
- Consumer research methodology
- Generations
- Abbreviations and terms
- Forecast methodology
- Forecast fan chart methodology
- Total retail sales and forecast of tea and RTD tea, at inflation-adjusted prices, 2019-29
- Total retail sales and forecast of RTD & refrigerated tea, at inflation-adjusted prices, 2019-29
- Value, average price and volume of multi-outlet RTD & refrigerated tea sales, 2019-23
- Total retail sales and forecast of bagged, loose-leaf and single cup tea, at inflation-adjusted prices, 2019-29
- Value, average price and volume of multi-outlet bagged, loose-leaf, single cup tea sales, 2019-13
- Total retail sales and forecast of instant tea mixes, at inflation-adjusted prices, 2019-29
- Value, average price and volume of multi-outlet instant tea mixes sales, 2019-23
- Sales of tea and RTD tea through other retail channels, at current prices, 2019-24
- Supermarket sales of tea and RTD tea, at current prices, 2019-24
- Convenience store sales of tea and RTD tea, at current prices, 2019-24
This report offers readers a complete review of the tea market in the US, covering all tea types sold at the retail level. With room to appeal better to tea consumer preferences, the data-backed analysis provided here can arm your unique insight strategy with the foundations to drive growth.
US Tea and RTD Tea Market – Current Landscape
Tea should be performing better than it is. Despite its range of flavors, formats, and strong health positioning as compared to other drink categories, it’s one of the smallest. The Achilles heel of the category is flavor, with fewer than 40% of tea drinkers saying the most common types of tea are a taste they enjoy. Boosting taste perception will be key in growing sales, given the leading role taste plays in food/drink choice. This can come from the addition of flavors to tea, as well as strengthening flavor cues on pack.
In addition to flavor, ease of use/convenience will be the way forward. While brewed tea rules formats consumed, more than half of tea drinkers turn to RTDs. In a world of single-cup coffee, brewing a cup of tea will become a harder sell. Brewed tea brands should consider either speeding up the process via convenience options, such as RTDs, quick-brews, and tea concentrates, or more clearly promoting the value/benefit of carving out time for a slow tea ritual.
Brands are not maximizing the advantage of functionality. Consumers want measurable benefits from their food/drink, and brands that clearly communicate the benefits of their products/ingredients will win out. At present, claims activity centers around environmental claims which, while important to some consumers, lacks the power of “what’s in it for me.”
US Tea and RTD Tea Market Report – What’s Inside?
Key Topics Analyzed in the Report
- Types and formats of tea consumed
- Perceptions of tea
- Factors influencing tea choice
- Attitudes toward tea
- Motivations for increasing tea consumption
- Interest in tea innovation
Report Scope
For the purposes of this Report, Mintel has used the following definitions:
- RTD and refrigerated tea – shelf-stable and refrigerated tea in single-serve and multiserve sizes. Refrigerated teas are primarily fresh-brewed teas requiring refrigeration; kombucha is included in this category.
- Bagged, loose leaf, and single-cup teas, including black, white, green, and fruit/herbal teas – bagged may be single-cup or multicup sizes
- Instant tea mixes
Teas sold through foodservice outlets are not included in the Report. Foodservice tea is covered in Mintel’s Foodservice Coffee and Tea – US, 2024 Report.
This Report builds on the analysis presented in Mintel’s Tea and RTD Tea – US, 2023 Report, as well as the 2022, 2021, and 2020 Reports of the same name.
Mintel also offers a look at the future of the global tea market.
Meet the Expert Behind the Analysis
This report was written by Paige Leyden. Paige is an Associate Director at Mintel and focuses on consumer attitudes, behaviors and trends in the US foodservice industry. She has over 7 years of experience leveraging syndicated and consumer data to deliver insights to CPG, retail and foodservice clients. She holds a Bachelor’s Degree in Consumer Economics from the University of Illinois.
Despite a wide range of flavors, formats and functionality, tea underperforms its potential. Brands must make stronger claims of convenient, affordable benefits.
Paige Leyden
Research Manager – Foodservice, US
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