Tea Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

Global Tea Market Trends and Insights

Heightened health awareness is driving up the demand for green and herbal teas

Growing health awareness is driving demand for green and herbal teas in the global tea market. Rising cases of non-communicable diseases, like diabetes and heart conditions, have increased the focus on healthier diets. In 2024, the International Diabetes Federation reports 589 million adults aged 20-79 living with diabetes, projected to reach 853 million by 2050 ^{[1]Source: International Diabetes Federation, "Diabetes around the world in 2024", www.idf.org}. Green and herbal teas, valued for their antioxidants and health benefits, have gained popularity. The Tea Association of the USA has observed a steady rise in specialty tea consumption over the past decade, reflecting a shift toward functional beverages. Governments and health organizations globally promote these teas as part of healthier lifestyle initiatives. For example, the European Food Safety Authority highlights green tea polyphenols' cardiovascular benefits, encouraging adoption. These factors are expected to drive the green and herbal tea segment's growth during the forecast period.

Market growth is bolstered by a rising demand for sustainable and ethically sourced products

In the tea market, the increasing preference for sustainable and ethically sourced products is a significant driver. According to the Food and Agriculture Organization (FAO), global tea production has been aligning with sustainable practices to meet consumer demand. Additionally, Governments in key tea-producing countries, such as India and Sri Lanka, have also introduced policies to promote organic and fair-trade certifications, further boosting the market's growth trajectory. For instance, the Indian government launched the "Mission Organic Value Chain Development for North Eastern Region" (MOVCDNER) to encourage organic farming practices, including tea cultivation ^{[2]Source: National Institute of Agricultural Extension Management, "Impact Evaluation Study of Mission Organic Value Chain Development for North Eastern Region (MOVCDNER)", www.manage.gov.in}. Similarly, Sri Lanka has implemented the "National Organic Agriculture Policy" to support sustainable agricultural practices ^{[3]Source: Ministry of Agriculture, Srilanka, "Organic Agriculture as a Tool for Rural Development in Sri Lanka", www.renasl.org}. These efforts reflect the growing consumer inclination toward products that align with ethical and sustainable values, thereby driving the market forward.

Urban cities witness a boom with the expansion of specialty tea café chains

The rapid expansion of specialty tea café chains is emerging as a significant driver in the tea market. Urban cities are witnessing a surge in demand for premium and diverse tea offerings, driven by changing consumer preferences and increasing disposable incomes. For instance, global brands like Teavana (acquired by Starbucks) and niche players such as DAVIDsTEA have successfully established their presence in metropolitan areas, catering to a growing audience seeking unique tea experiences. These cafés not only offer a wide variety of specialty teas, including matcha, oolong, and herbal blends, but also create a lifestyle appeal by providing aesthetically pleasing spaces for socializing and relaxation. Additionally, the rise of health-conscious consumers has further propelled the demand for specialty teas, as they are often marketed for their health benefits, such as antioxidant properties and stress relief. This trend is expected to continue driving growth in the tea market, particularly in urban regions, during the forecast period.

Gen-Z shows a growing preference for decaffeinated and low-caffeine wellness teas

The growing preference of Gen-Z for decaffeinated and low-caffeine wellness teas is emerging as a significant driver in the tea market. This demographic increasingly prioritizes health and wellness, seeking beverages that align with their lifestyle choices. For instance, many Gen-Z consumers opt for teas infused with natural ingredients like chamomile, peppermint, and hibiscus, which are known for their calming and health-boosting properties. Additionally, the demand for functional teas, such as those promoting relaxation or aiding digestion, has surged among this group. Brands are responding by introducing innovative products, such as herbal blends and adaptogenic teas, to cater to this trend. The shift is also evident in the growing popularity of ready-to-drink (RTD) low-caffeine tea options, which offer convenience without compromising on health benefits. This trend highlights the evolving preferences of Gen-Z, making it a crucial factor driving growth in the tea market.

Strong competition from coffee and other beverages limits market share

The tea market is facing significant challenges in expanding its market share due to the strong competition from coffee and other beverages. Coffee, in particular, has become a widely preferred alternative, offering a variety of flavors, brewing techniques, and caffeine levels that appeal to a broad spectrum of consumers. The global popularity of coffee chains and the increasing availability of premium coffee products have further strengthened its position in the beverage market. Additionally, other beverages, such as ready-to-drink options, energy drinks, carbonated soft drinks, and flavored water, are gaining popularity among consumers who prioritize convenience, taste, and variety. These alternatives often cater to changing consumer lifestyles and preferences, making it harder for tea to compete effectively. Furthermore, aggressive marketing strategies and product innovations by competitors in the beverage industry have intensified the competition, drawing consumer attention away from tea. As a result, the global tea market continues to face significant restraints in its growth due to the rising demand for coffee and other competing beverages.

Health Concerns Over Sugar Content in Flavored Teas Hinder Demand

One of the key restraints in the market is the growing health concerns associated with the sugar content in flavored teas. Consumers are becoming increasingly aware of the adverse health effects linked to high sugar consumption, such as obesity, diabetes, and other chronic health conditions. This awareness has led to a shift in consumer preferences, with many opting for healthier alternatives, including unsweetened or naturally flavored teas. The rising demand for low-sugar or sugar-free beverages has put pressure on manufacturers to reformulate their products to meet these changing preferences. However, this transition poses challenges in maintaining the taste and appeal of flavored teas, which are often popular due to their sweetened profiles. As a result, the demand for traditional flavored teas with high sugar content has been negatively impacted, influencing the overall growth of the flavored tea segment within the global tea market.

Segment Analysis

By Form: CTC Dominance Faces Leaf Tea Renaissance

In 2024, CTC tea captured a significant 60.12% share of the tea market, primarily due to its cost efficiency and the convenience it offers for quick brewing, making it highly suitable for mass consumption. This dominance is further reinforced by its widespread adoption among bulk buyers, who value its consistent quality and reliability, particularly in teabags and foodservice applications. CTC's affordability and ease of preparation have made it a staple choice for institutional trade, catering to large-scale demand efficiently. However, the leaf tea segment is emerging as a notable growth area, with a CAGR of 6.50%. This segment appeals to tea connoisseurs who seek a more refined experience, characterized by complex flavors and a reduced risk of microplastic exposure. 

Higher-income urban consumers increasingly associate whole-leaf tea grades with attributes such as freshness, authenticity, and traceability. These consumers are drawn to the transparency offered by premium teas, which often highlight their origins and production methods. Artisan blenders are capitalizing on this trend by crafting compelling narratives around factors like the elevation of tea estates, the specific seasons during which the leaves are plucked, and the meticulous hand-rolling techniques used in production. While CTC remains the backbone of institutional trade due to its volume-driven appeal, the increasing demand for premium teas indicates a potential rebalancing of the market. This trend underscores the growing importance of catering to diverse consumer needs, ranging from affordability and convenience to quality and exclusivity.

By Product Type: Black Tea Leads While Herbal Infusions Surge

In 2024, black tea accounted for 39.54% of total revenue, bolstered by its deep-rooted cultural significance in Asia, the UK, and parts of Africa. The enduring popularity of black tea is further supported by the introduction of brand extensions, featuring popular variants like masala-chai and Earl Grey. These extensions have played a pivotal role in ensuring black tea's continued relevance in the market. By addressing evolving consumer tastes while preserving its traditional appeal, black tea remains a staple beverage choice across diverse demographics. Additionally, the versatility of black tea, which allows it to be consumed both as a standalone beverage and as a base for innovative recipes, has further strengthened its position in the market.

Conversely, herbal and fruit infusions are surging ahead, boasting an impressive CAGR of 7.51%. Their rapid ascent is largely attributed to their caffeine-free nature and wellness-centric marketing, which resonate strongly with health-conscious consumers. Botanicals like ginger, hibiscus, and turmeric, celebrated for their immune-boosting properties, are driving this growth. These infusions are particularly gaining traction in e-commerce channels, where they are often bundled into curated packages and marketed by lifestyle influencers. This strategy not only enhances visibility but also encourages repeat purchases, solidifying their position in the market. Furthermore, the growing consumer inclination toward natural and functional ingredients has amplified the demand for these products, making them a preferred choice for individuals seeking healthier beverage alternatives.

By Category: Organic Segment Disrupts Conventional Dominance

In 2024, conventional tea maintained its dominance in the tea market, accounting for a substantial 87.34% share of the market volume. This highlights its enduring popularity among consumers, driven by factors such as affordability, widespread availability, and a long-standing cultural preference for traditional tea varieties. Conventional tea continues to be a staple in households globally, supported by its extensive distribution networks and the presence of well-established brands. Despite the growing interest in alternative tea options, conventional tea remains the preferred choice for a majority of consumers due to its familiarity and cost-effectiveness.

On the other hand, organic tea labels are steadily gaining traction, reflecting a shift in consumer preferences toward healthier and more sustainable options. With a strong projected CAGR of 9.50% during the forecast period, organic tea is emerging as a key growth segment in the market. This growth is fueled by increasing awareness of the health benefits associated with organic products, as well as a rising demand for environmentally friendly and ethically sourced goods. Organic tea brands are leveraging these trends by offering a diverse range of flavors and premium-quality products, appealing to health-conscious and eco-aware consumers. As a result, organic tea is carving out a significant niche within the broader tea market.

By Flavoring: Innovation Drives Flavored Tea Growth

In 2024, unflavored teas maintained their dominant position in the tea market, accounting for 76.12% of the total revenue. This significant share underscores the strong consumer preference for traditional tea options, driven by their natural taste and perceived health benefits. Unflavored teas continue to appeal to a broad demographic, including health-conscious consumers and those seeking authentic tea experiences. Their established presence in both developed and emerging markets further solidifies their role as a staple in the global tea industry. Additionally, the simplicity and versatility of unflavored teas make them a preferred choice for consumers who enjoy customizing their beverages with milk, sugar, or other additives. 

On the other hand, flavored teas are projected to grow at a faster CAGR of 7.23% during the forecast period. This growth is fueled by increasing consumer interest in innovative and diverse flavor profiles, ranging from fruity and floral to spicy and herbal blends. Flavored teas are gaining traction among younger consumers and those looking for unique beverage options that cater to evolving taste preferences. Additionally, the rising trend of premiumization and the introduction of functional flavored teas with added health benefits are expected to drive their demand further in the coming years. The growing popularity of ready-to-drink flavored tea products and the expansion of e-commerce platforms have also made these teas more accessible to a wider audience. 

By Packaging Type: Boxes Dominate as Pouches Innovate

 In 2024, boxes commanded a significant 70.04% share of the market value in the tea packaging segment. Their robust structure not only guarantees the safe storage and transportation of tea products but also makes them a favored choice for gifting tea. Boxes are particularly valued for preserving the quality and freshness of tea while offering an attractive presentation. This reliability and the enhanced visual appeal they provide have solidified their popularity across various tea-related industries, catering to both consumer and commercial demands. Additionally, boxes are versatile and can accommodate various tea formats, including loose-leaf tea, tea bags, and specialty blends, making them suitable for a wide range of consumer preferences.

Conversely, flexible pouches are emerging as a rapidly growing segment, with a projected CAGR of 7.04%. This growth is driven by their lightweight design, which offers multiple advantages. Lightweight packaging reduces transportation costs and minimizes logistics-related emissions, making it an environmentally friendly option. Additionally, flexible pouches align with global sustainability goals, particularly those focused on reducing plastic usage and promoting eco-friendly packaging solutions. Their convenience, versatility, and ability to cater to a wide range of products further contribute to their increasing adoption. 

Note: Segment shares of all individual segments available upon report purchase

By Distribution Channel: On-Trade Growth Reshapes Retail Dynamics

In 2024, off-trade channels continued to dominate with a 70.24% revenue share, primarily driven by the convenience and accessibility offered by supermarket shelves and the rapid growth of pure-play e-commerce platforms. These channels have become integral to meeting the increasing demand for at-home tea consumption, as consumers prioritize ease of access and a wide variety of options. Supermarkets provide a familiar and convenient shopping experience, while e-commerce platforms cater to the growing preference for online shopping, offering doorstep delivery and exclusive product ranges. On the other hand, the on-trade segment is projected to grow at an impressive 9.50% CAGR, supported by the rising popularity of specialty cafés. These cafés are revolutionizing the tea industry by creating immersive and innovative tea-drinking experiences.

Bar-style tea menus have emerged as a key trend, featuring unique offerings such as cold-brew flights, nitrogen-infused teas, and carefully curated food pairings. These innovations are reshaping consumer perceptions of tea, elevating it from a traditional pantry staple to a modern lifestyle choice. The integration of tea with creative food pairings and experimental brewing techniques has positioned it as a centerpiece of social gatherings and premium experiences. Specialty cafés are not only attracting tea enthusiasts but also appealing to a broader audience seeking novel and engaging beverage options. This shift highlights the evolving role of tea in the market, as it transitions from a basic household item to a symbol of sophistication and a means of self-expression.

Geography Analysis

In 2024, Asia-Pacific, led by the influential roles of China and India, secures a commanding 35.21% share of the tea market. The region's tea dominance, deeply embedded in its cultural traditions, boasts a robust production infrastructure that meets both local and export demands. China's premium tea segment is experiencing a notable uptick, driven by the middle class's rising incomes and a renewed enthusiasm for traditional tea customs among the younger generation. Data from ITC Trade Map reveals that China's tea leaf imports surged from a value of USD 146.03 million in 2022 to USD 157.61 million in 2024, further highlighting the growing demand for tea in the country ^{[4]Source: ITC Trade Map, Import Value of Tea Leaf (HS Code: 0902), www.trademap.org}. Concurrently, India is transforming, with a burgeoning domestic demand for specialty teas that were once predominantly earmarked for export. Meanwhile, Japan is charting new territories, pioneering innovations in the ready-to-drink tea arena.

Europe, while a seasoned player in the tea arena, is undergoing its own transformations. The UK, a long-standing bastion of tea tradition, finds itself in a tussle with the rising coffee wave. Meanwhile, countries like Germany and France, along with other parts of continental Europe, are gravitating towards specialty and herbal teas, with a pronounced emphasis on sustainability in their purchasing decisions. North America, historically a coffee stronghold, is undergoing a tea transformation. With health and wellness trends gaining traction, functional and herbal teas are carving out a notable niche in the market. The region is witnessing a growing consumer preference for teas with perceived health benefits, such as green tea, matcha, and herbal infusions.

The Middle East and Africa are on the brink of a tea renaissance, eyeing an impressive CAGR of 8.50% from 2025 to 2030. This growth is fueled by urbanization, rising incomes, and shifting consumer tastes. While traditional tea remains a staple, there's a burgeoning interest in premium and specialty varieties, especially in the Gulf Cooperation Council nations. Saudi Arabia's Vision 2030 is steering the nation towards economic diversification, with the food and beverage sector, including tea, poised for significant expansion.