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- US Tea and RTD Tea Market Report 2023
This report covers the US tea market extensively. Deep analysis of market performance provides the backdrop for Mintel’s consumer data, enabling strategic opportunities to drive growth. Accelerate your insight strategy today with the foundations of this research.
Below, we provide the key topics covered and offer select insights from the report.
Key Topics Covered
- Market size, segmentation, and key trends driving growth in the Tea and RTD market.
- Tea and RTD tea consumption types and purchase formats.
- Important tea and RTD tea attributes.
- Attitudes and behaviours related to tea and RTD tea consumption and innovation.
- Indicators of quality for tea and RTD tea.
US Tea Market Outlook 2023-2028
The US tea market is experiencing modest growth, aligning with pre-pandemic trends. Volume sales struggled until 2023, but the instant mix segment performed exceptionally well. The majority of consumers stick to the same tea routines, indicating a need for disruption. By 2028, Gen Z and even Gen Alpha will represent 39% of the total US population, representing a growing opportunity for industry players. With tea’s inherent functional/better-for-you benefits, brands will want to lean into messaging around this as it already resonates with younger audiences.
US Tea Consumer: Fast Facts
- Most consumers drink bagged tea. For tea consumption, convenience may not be the primary consideration. Despite the popularity and availability of ready-to-drink (RTD) options, self-prepared teas, especially those in tea bags, maintain the largest audience.
- Less than half cite the functional benefits of tea consumed. Functionality has been flooding the drinks category. Yet, there is room to shed more light on the functional benefits of tea—the original functional drink.
- Different demographics require different approaches. While brand/flavour familiarity is more important for older generations, younger consumers are drawn to functional and innovative tea, indicating a need to position effectively for varied demographic preferences.
US Tea Industry Growth Opportunity
Versatility is seen as a value indicator to consumers. With this, there is an opportunity for brands to play into new uses and applications for tea. Speciality drinks like boba tea and matcha can make consumers consider tea differently, especially among younger, trend-driven audiences. Tea can also be an ingredient in baking and foods. Leveraging tea’s strengths in other food and drink categories beyond its traditional uses can bring tea into fresh and energising spaces that convert unengaged users into routine tea consumers.
Find a comprehensive analysis of data-backed opportunities in the full report. You can also browse our other tea market research.
Brands Discussed
Covering tea market share and a deep dive into the competitive landscape, this report references a number of key players and more niche brands. Brands discussed include Pepsi Lipton, Milo’s, Coca-Cola, Gardenika, Juni, SkinTe, Numi, and more.
Additional Features Included in Your Report
- Different Digital Formats: PDF for conveniently sharing with your team, PowerPoint for quickly including in your presentations, and an Excel databook.
- Mintel’s Clients Portal: Our portal provides instant access to actionable analysis, podcasts, and trend pieces relevant to your industry that are published almost daily, as well as our annual Global Consumer Trends. You can also browse our extensive library of market research reports.
Expert Analysis
Leading food and drink analyst Mimi Bonnett delivers expert industry insights with this report.
Tea is naturally among the “original” functional drinks, yet flies a bit under the radar in the broader beverage landscape that is teeming with functional offerings. Yet, younger adults seek many fundamental tea features: flavor variety, BFY benefits and versatility calling for brands to go on the offensive targeting energy, detoxification and metabolism that will lead teas of any kind into new occasions.
Mimi Bonnett
Senior Director – US Food and Drink
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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
- Consumer trends
- It’s time to narrow the gap between hot and iced
- Figure 1: Tea formats consumed– any drink, 2023
- Young adults want more than just a cup of tea
- Figure 2: Functional Benefit experience, by generation, 2023
- Balance of new and familiar
- Figure 3: Important attributes – any rank, 2023
- Competitive strategies
- Extending tea time into happy hour, and beyond
- Figure 4: Tazo Tea recipes, 2023
- Market predictions
- Return to sluggish growth following wild ride
- Figure 5: Total US sales and fan chart forecast of tea and RTD tea market, at current prices, 2018-28
- Figure 6: Total US retail sales and forecast of tea and RTD tea, at current prices, 2018-28
- Figure 7: Tea and RTD tea category outlook, 2023-28
- Opportunities
- Take back the functional market though street cred
- Embrace the power of routines
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Market Size and Forecast
- Tea maintains 2020 bump, returns to slower growth through 2028
- Figure 8: Total US sales and fan chart forecast of tea and RTD tea market, at current prices, 2018-28
- Figure 9: Total US retail sales and forecast of tea and RTD tea, at current prices, 2018-28
- Tea maintains 2020 bump, returns to slower growth through 2028
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Segment Performance
- Instant teas having their moment
- Figure 10: Total US retail sales and forecast of tea and RTD tea, by segment, at current prices, 2018 and 2023
- Instant teas having their moment
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Market Drivers
- Next generation tea drinkers are thirsty for function, flavor
- Figure 11: US Population by generation, 2018-28
- Global trade, climate change make tea market vulnerable
- Economic rollercoaster reshapes tea behaviors
- Figure 12: U.S. Consumer Confidence, January 2007–June 2023
- Next generation tea drinkers are thirsty for function, flavor
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Key Players
- Sales of Tea and RTD tea by company
- Figure 13: Multi-outlet sales of tea and RTD tea, by leading companies, rolling 52 weeks 2022 and 2023
- Private label brewed teas outpace leading brands
- Figure 14: Multi-outlet sales of bagged, loose leaf, single cup tea, by leading companies and brands, rolling 52 weeks 2022 and 2023
- RTD teas can step up the innovation
- Figure 15: Multi-outlet sales of RTD & refrigerated tea, by leading companies and brands, rolling 52 weeks 2022 and 2023
- More than affordability bolsters instant tea mixes
- Figure 16: Multi-outlet sales of instant tea mixes, by leading companies and brands, rolling 52 weeks 2022 and 2023
- Sales of Tea and RTD tea by company
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Competitive Strategies and Market Opportunities
- Brands lean deeper into selfcare routines
- Figure 17: Tea with added functional benefits, 2022-23
- Brands focus on sustainability
- Figure 18: Numi Organic Chamomile Lemon Herbal Tea
- Shake up tea routines and convention
- Bringing tea into social and lifestyle activities: the adult beverage experience
- It’s DIY time for teas
- Brands lean deeper into selfcare routines
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The Tea and RTD Tea Consumer – Fast Facts
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Tea Formats and Variety Consumed
- Create throughlines on the tea spectrum with function, flavor
- Figure 19: Tea formats consumed, 2023
- Contemporary drinkers want more than grandmother’s cup of tea
- Figure 20: Tea formats consumed– net, any drink, by generation, 2023
- Why should coffee have all the fun with specialty bevs and flavor?
- Figure 21: Tea Variety consumed, 2023
- Create throughlines on the tea spectrum with function, flavor
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Functional Benefit Experience
- Take to social to win function seekers
- Figure 22: Functional Benefit experience, 2023
- Make functional believers out of Gen X +
- Figure 23: Functional Benefit experience, by generation, 2023
- Take to social to win function seekers
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Important Attributes
- Flavor, taste are gateways to trial
- Figure 24: Important attributes – any rank, 2023
- It’s about more than the tea for young adults
- Figure 25: Important attributes – any rank, 2023
- Flavor, taste are gateways to trial
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Quality Indicators
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- Figure 26: Quality indicators: brewed tea, 2023
- Sweetness can or break RTD quality perceptions
- Figure 27: Quality indicators: RTD, 2023
- Figure 28: Quality indicators: RTD Tea, by Generation, 2023
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Attitudes toward Tea and RTD Tea
- The joy of routine: teas wellness links provide springboard for innovation
- Figure 29: Attitudes toward tea and RTD tea, 2023
- Facilitate experimental aspirations for younger adults
- Figure 30: Select attitudes toward tea and RTD tea – Any agree, by age, 2023
- The joy of routine: teas wellness links provide springboard for innovation
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Appendix – Data Sources and Abbreviations
- Data sources
- Sales data
- Forecast
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
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Appendix – The Market
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- Figure 31: Total US retail sales and forecast of tea and RTD tea, at inflation-adjusted prices, 2018-28
- Figure 32: Total US retail sales and forecast of tea and RTD tea, by segment, at current prices, 2018-23
- Figure 33: Total US retail sales of bagged, loose leaf, single cup tea, at current prices, 2018-23
- Figure 34: Value, average price and volume of multi-outlet bagged, loose leaf, single cup tea sales, 2018-22
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- Figure 35: Total US retail sales and forecast of RTD & refrigerated tea, at current prices, 2018-23
- Figure 36: Value, average price and volume of multi-outlet RTD & refrigerated tea sales, 2018-22
- Figure 37: Total US retail sales and forecast of instant tea mixes, at current prices, 2018-23
- Figure 38: Value, average price and volume of multi-outlet instant tea mixes sales, 2018-22
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- Figure 39: Total US retail sales of tea and RTD tea, by channel, at current prices, 2018-23
- Figure 40: Total US retail sales of tea and RTD tea, by channel, at current prices, 2021 and 2023
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Appendix – Companies and Brands
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- Figure 41: Multi-outlet sales of instant tea mixes, by leading companies and brands, rolling 52 weeks 2022 and 2023
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Appendix – The Consumer
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- Figure 42: Tea formats consumed– most often drink – trended, 2021-23
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- Figure 43: Tea formats consumed – also drink – trended, 2021-23
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