Description

Providing the most comprehensive and up-to-date information and analysis of the US Tea and RTD Tea Consumer market including the behaviors, preferences, and habits of the consumer.

The impact of the pandemic on the segments that make up the market was disproportionate and has already begun to recalibrate. For bagged, loose-leaf and single cup teas and the instant segment, the double digit sales growth of 2020 has begun to shrink back in 2021. On the other hand, the RTD and refrigerated segment found more tempered growth in 2020 that has begun to pick up steam as consumers return to a life and activities outside the home. Opportunities for brands in any segment are connected to forging or reinforcing stronger ties to wellbeing, versatility, value and function.

Changes in daily routines, disrupted shopping habits and the added stress of dealing with a global health crisis resulted in robust growth to the once sluggish tea market. Consumers have continued to focus on both their physical and emotional health in 2021 because of the lingering pandemic. Despite loosened restrictions, more consumers will be adopting hybrid approaches to work and school going forward that will contribute both to new occasions and subdued impulse occasions for tea consumption.

The pandemic and the quest for comfort, relaxation and immunity set tea up for success, but in an already very competitive nonalcoholic beverage market that was thriving. Prior to the pandemic, the tea category was being outpaced by strong growth rates in other non-alcoholic beverage categories where innovation has leaned into functionality.

Tea drinkers are thirsty for more options, especially ones that may contribute to wellbeing rituals, even after a year of or perhaps because of increased consumption. Nearly a third of tea drinkers cite increased consumption compared to a year ago and have plans to continue. Brands can continue to help consumers figuratively quench this thirst by helping to facilitate benefit education, product trial and tea time inspiration that makes tea time a BFY, diverse and habitual experience.

Read on to discover more about the US Tea and RTD Tea consumer market, read our Coffee and RTD Coffee – US – 2021 report, or take a look at our other Drinks research reports.

Quickly understand

  • The immediate and longer-term impact of COVID-19 on consumer behavior and the tea market.
  • Use of tea by format and type.
  • Importance of tea attributes, functional benefits and sustainability/ethics.
  • Consumer consumption of and attitudes about tea.
  • Tea industry statistics, and tea market trends.

Covered in this report

Brands include: East West Tea Company, Milo’s Tea, Pepsi Lipton Tea Partnership, The Coca-Cola Company, Millennium Prod’s, Hornell Brewing Co, Unilever, Dr. Pepper Snapple Group, Bigelow Tea Company, The Hain Celestial Group Inc, Twinings North America, Tazo, Pukka, Celestial Seasonings, Yogi, Traditional Medicinals, AriZona, Gold Peak, GT’s Enlightened Kombucha, GT’s Synergy, Crystal Light, Tiesta Tea, Ellis Isle, Wellness Teavana, Humm Zero, Spare Tonic, Keurig, Helps Functional Teas, Pharmadus Botanicals, .

Expert analysis from a specialist in the field

This report, written by Mimi Bonnett, a leading analyst in the Food and Drink sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

As Americans become increasingly engaged with a health and wellness mentality, the market will see greater diversity of users. This will necessitate that tea innovations capture a broader range of health and wellness benefits while placing flavor and refreshment at the forefront of messaging. The opportunity is to deliver added value through functional benefits – going beyond tea’s innate health properties to offer benefits that optimize wellness in other areas, such as self-care, brain, immunity, sleep, etc.

Mimi Bonnett, Senior Director, US Food and Drink
Mimi Bonnett
Senior Director – US Food and Drink

Table of Contents

  1. Overview

    • What you need to know
      • Key issues covered in this Report
        • Definition
          • Economic and other assumptions
            • COVID-19: US context
            • Executive Summary

                • Top takeaways
                  • Market overview
                    • Pandemic spurs shifts in market
                      • Figure 1: Total US retail sales and forecast of tea and RTD tea, at current prices, 2016-26
                    • Impact of COVID-19 on tea and RTD tea
                      • Figure 2: Short, medium and long term impact of COVID-19 on tea and RTD tea, 2021
                    • Challenges and opportunities
                      • Unbalanced segment performance tells a tale of two teas
                        • Figure 3: Total US retail sales of tea and RTD tea, by segment, at current prices, 2016-21
                        • Figure 4: Total US retail sales of tea and RTD tea, by segment, at current prices, 2016-21
                      • Focus on flavor first
                        • Figure 5: Select important tea attributes, 2021
                      • Help consumers build tea regimes
                        • Figure 6: Tea behaviors and attitudes, 2021
                      • Target functional benefits marketing
                        • Figure 7: Interest in functional benefits, by age, 2021
                    • The Market – Key Takeaways

                      • Tea and RTD tea thrive
                        • Future growth fueled by function
                          • Healthy reputation fuels brewed tea segment
                          • Market Size and Forecast

                            • Pandemic elevated sales slow but linger
                              • Figure 8: Total US retail sales and forecast of tea and RTD tea, at current prices, 2016-26
                              • Figure 9: Total US retail sales and forecast of tea and RTD tea, at current prices, 2016-26
                          • Segment Performance

                            • Bagged, loose-leaf and single cup chip away at RTD share
                              • Figure 10: Total US retail sales of tea and RTD tea, by segment, at current prices, 2016-21
                            • Pandemic renews the influence of traditional grocery stores
                              • Figure 11: Total US market share of tea and RTD tea, by channel, 2019 and 2021
                              • Figure 12: Total US retail sales and forecast of tea and RTD tea, by channel, at current prices, 2016-21
                          • Market Factors

                            • Tea weathers economic uncertainty
                              • Figure 13: Consumer confidence and unemployment, 2000-21
                            • It’s time to recruit the next generation of tea drinkers
                              • Figure 14: Population aged 18 or older, by age, 2016-26
                            • Competitive non-alcoholic beverage space invades tea territory
                            • Companies and Brands – Key Takeaways

                              • Leading RTD tea brands demonstrate superior performance
                                • Small RTD brand leverages family-centric identity
                                  • Brewed tea players target refreshment
                                    • Functions make tea part of self-care
                                    • Market Share

                                      • Performance in RTD brands helps companies outpace category
                                        • Figure 15: Multi-outlet sales of tea and RTD tea, by leading companies, rolling 52 weeks 2020 and 2021
                                      • Brewed tea brands deliver mixed results
                                        • Figure 16: Multi-outlet sales of bagged, loose-leaf, single cup tea, by leading companies, rolling 52 weeks 2020 and 2021
                                      • Milo’s Tea continues impressive growth momentum
                                        • Figure 17: Multi-outlet sales of RTD and refrigerated tea, by leading companies, rolling 52 weeks 2020 and 2021
                                      • Private label instant tea finds success
                                        • Figure 18: Multi-outlet sales of instant tea mixes, by leading companies, rolling 52 weeks 2020 and 2021
                                    • Competitive Strategies

                                      • Immune health FTW
                                        • figure 19: Immune boosting RTD Tea, 2021
                                      • Milo’s plays to its strengths: shared values
                                        • figure 20: Milo’s social media campaigns, 2021
                                      • Lean into versatility
                                        • figure 21: East West Tea social media campaigns, 2021
                                        • figure 22: east west tea social media campaigns, 2021
                                      • Taking the guess work out of self-care
                                        • figure 23: twinings tea, 2021
                                    • Market Opportunities

                                      • Build connections and perceptions of wellness across formats
                                        • Figure 24: Tea as part of wellness routine, by tea format, 2021
                                      • Gut health is the new immunity
                                        • figure 25: digestive health RTDs, 2021
                                      • Hit both ends of the age spectrum with brain and eye health
                                        • figure 26: Functional teas, eye and brain health, 2021
                                    • The Consumer – Key Takeaways

                                      • Brewed tea tops consumption
                                        • Hot brewed, flavored green tea and herbal teas have broadest appeal
                                          • Consumers are thirsty for new teas to support health goals
                                            • Tea drinkers use a flavor first purchase strategy
                                              • Interest in function doesn’t stop at immunity
                                                • Reach younger adults with sustainable/ethical efforts
                                                • Formats of Tea Consumed

                                                  • Self-brewed beat out RTDs as go-to teas
                                                    • Figure 27: Formats of Tea consumed, Net most often, 2021
                                                  • Adults aged 25-44 demonstrate highest adoption for both formats
                                                    • Figure 28: Formats of Tea consumed, most often and also drink, by age, 2021
                                                  • RTDs are “also drinks”
                                                    • Figure 29: Formats of tea consumed, 2021
                                                  • Hybrid teas are the gateway to category use
                                                    • Figure 30: Formats of tea consumed, by age, 2021
                                                • Types of Tea Consumed

                                                  • Hot, flavored green and herbal teas lead consumption
                                                    • Figure 31: Varieties of tea consumed, 2021
                                                  • Herbal teas popular among women
                                                    • Figure 32: functional teas, herbal and chai, 2021
                                                    • Figure 33: varieties of tea consumed, by gender, 2021
                                                  • Young tea drinkers’ tea choice points to changing palates
                                                    • Figure 34: Varieties of tea consumed, by age, 2021
                                                • Tea Behaviors and Attitudes

                                                  • Health provides platform for tea innovation
                                                    • Figure 35: Tea behaviors and attitudes, 2021
                                                  • Adults 25-44 have aspirations of tea regimens
                                                    • Figure 36: Tea behaviors and attitudes, by age, 2021
                                                  • Variety appeals to parents
                                                    • Figure 37: Tea behaviors and attitudes, by parental status, 2021
                                                  • Loose-leaf tea drinkers seek new teas to accommodate growing repertoire
                                                    • Figure 38: Tea behaviors and attitudes, by format of tea consumed, 2021
                                                • Important RTD Tea Attributes

                                                  • Flavor dominates; price and thirst-quenching also top consideration
                                                    • Figure 39: Important RTD tea attributes, 2021
                                                  • Young adults seek energizing; older adults value flavor and refreshment
                                                    • Figure 40: Important RTD tea attributes, by age, 2021
                                                • Important Brewed Tea Attributes

                                                  • Quality and health go hand in hand
                                                    • Figure 41: Important brewed tea attributes, 2021
                                                  • Lure women with nuanced benefits
                                                    • Figure 42: Important brewed tea attributes, by gender, 2021
                                                  • Young adults looking for health + natural, organic
                                                    • Figure 43: Important brewed tea attributes, by age, 2021
                                                • Interest in Functional Benefits

                                                  • Pandemic shuffles wellbeing priorities
                                                    • Figure 44: Interest in functional benefits, 2021
                                                  • Women demonstrate greater interest in a variety of functional benefits
                                                    • Figure 45: Interest in functional benefits, by gender, 2021
                                                  • Interest in functional benefits shifts with age
                                                    • Figure 46: Interest in functional benefits, by age, 2021
                                                • Attitudes toward Sustainability and Ethics

                                                  • Sustainable efforts don’t go unnoticed
                                                    • Figure 47: Attitudes toward sustainability and ethics, 2021
                                                  • Younger generations want coffee/tea brands to prioritize donations
                                                    • Figure 48: Attitudes toward sustainability and ethics, by generation, 2021
                                                • Appendix – Data Sources and Abbreviations

                                                  • Data sources
                                                    • Sales data
                                                      • Forecast
                                                        • Consumer survey data
                                                          • Abbreviations and terms
                                                            • Abbreviations
                                                              • Terms
                                                              • Appendix – The Market

                                                                  • Figure 49: Total US retail sales and forecast of tea and RTD tea, at inflation-adjusted prices, 2016-21
                                                                  • Figure 50: Total US retail sales of tea and RTD tea, by segment, at current prices, 2019 and 2021
                                                                  • Figure 51: Total US retail sales and forecast of RTD and refrigerated tea, at current prices, 2016-26
                                                                  • Figure 52: Total US retail sales and forecast of bagged, loose-leaf, single cup tea, at current prices, 2016-26
                                                                  • Figure 53: Total US retail sales and forecast of instant tea mixes, at current prices, 2016-26
                                                                  • Figure 54: Total US retail sales of tea and RTD tea, by channel, at current prices, 2019 and 2021
                                                                  • Figure 55: US supermarket sales of tea and RTD tea, at current prices, 2016-21
                                                                  • Figure 56: US sales of tea and RTD tea through other retail channels, at current prices, 2016-21
                                                                  • Figure 57: Total US retail sales and forecast of RTD and refrigerated tea, at current prices, 2016-26

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