Ready-To-Drink (RTD)Tea Market

Market Overview

The global ready-to-drink (RTD) tea market size was valued at USD 29,734.9 million in 2022. It is expected to reach USD 48,555.87 million by 2031, growing at a CAGR of 5.6% during the forecast period (2023–2031).

Ready-to-drink (RTD) tea is pre-prepared and packed tea. Black tea, which is popular in western countries, and green tea, which is popular in Asian nations, are the two main tea varieties. Tea care and husbandry management involve careful site selection, as well as some steps that must be carefully followed, such as providing a reliable source of water, adequate shelter, free-draining soil with a pH range of 5 to 5.8, and strict regulations regarding the number of pesticides sprayed on plantations. 

The expansion of the global ready-to-drink tea industry can be mainly attributed to the fact that more people are learning about the positive effects of RTD tea on their health. In addition to helping with weight loss, RTD helps lower cholesterol and the risk of heart disease and other ailments. With more people becoming aware of the need to adopt a healthy lifestyle, the global market is predicted to expand rapidly over the next several years. Growth in the global ready-to-drink tea market is expected to be driven by several factors, including rising disposable income, the availability of ready-to-drink tea in convenient and attractive packaging, and the proliferation of cafes, online and offline retailers, and restaurants.

Highlights

• The black tea segment is the highest contributor to the market by type.
• The conventional segment is the highest contributor to the market by category.
• The supermarket/hypermarket segment is the highest contributor by distribution channel.
• North America is the most significant revenue contributor by region.

Market Dynamics

Global Ready-To-Drink (RTD) Tea Market Drivers

Increase in the Middle Class's Per Capita Income

Consumer preference for drinking tea has changed due to increased consumer awareness of the health benefits of RTD tea and extensive marketing and advertising by leading brands, which is driving the growth of the global RTD tea market. Young people entering the middle class and who are urban and populous consume more tea and pay more for it. These elements are likely to increase consumer demand for premium tea. Therefore, the need for RTD tea and other beverages in the commercial sector is fueled by the exponential growth of the middle-class population, which also spends money at hotels and cafés, which drives the market's growth.

Health Benefits of Drinking Tea

RTD tea has several health advantages, including its high antioxidant and polyphenol content, consisting primarily of flavonoids and catechins. These stop widespread cellular degeneration by stabilizing dangerous free radicals in the human body. Vitamins (C, K, B12, B6, and E), minerals (trace amounts of potassium, manganese, magnesium, and calcium), and amino acids are all in tea's nutritional profile. In addition, research from several reputable organizations has shown that RTD tea helps people lose weight, lowers cholesterol, boosts immunity, and guards against neurological diseases. The above information suggests that RTD tea's health advantages fuel market expansion.

Global Ready-To-Drink (RTD) Tea Market Restraints

Rising Consumption of RTD Coffee

RTD coffee is a stimulating beverage that contains niacin, manganese, potassium, and magnesium. Additionally, it has been demonstrated to protect the liver, lower the risk of type 2 diabetes, and prevent some types of cancer. Coffee is a simple alternative to tea because of its advantageous properties. Additionally, several surveys about coffee consumption and the rising trend of coffee consumption outside the home conducted by reputable organizations among the public suggest that the global market will grow slower than anticipated.

Global Ready-To-Drink (RTD) Tea Market Opportunities

Introduction of New Tastes

To diversify their product offerings and increase market sales, various market participants in the tea industry are introducing multiple varieties of organic tea, green tea, and fruit tea. These consist of tiramisu black tea, caramel truffle herbal tea, custard tart herbal tea, peach turmeric herbal tea, apple pie à la mode herbal tea, and caramel apple tea. These flavored teas have a long history of advertising their natural health advantages, including their ability to aid in weight loss, build muscle, and support digestive health. Therefore, it is anticipated that each of these factors will present lucrative chances for the growth of the RTD tea market during the study period.

Regional Analysis

North America Dominates the Global Market

The global ready-to-drink (RTD) tea market is segmented by region: North America, Europe, Asia-Pacific, and LAMEA.

North America is the most significant revenue contributor and is expected to grow at a CAGR of 5% during the forecast period. The markets for RTD tea in the United States, Canada, and Mexico are all being researched. A moderate rate of growth is anticipated for this area in the future. With highly developed distribution networks and a mature economy, North America promotes the sale of food and drink. RTD tea consumption is rising in the region due to consumers' increased adoption of healthy lifestyles, boosting the market's expansion. Due to intense rivalry, the market in North America has been consolidating. Additionally, the consumer preference shift toward tea and coffee and healthier alternatives to caffeinated beverages is anticipated to create growth opportunities for the RTD tea market. RTD tea production also rises due to the presence of significant regional market players with high-volume production facilities. As a result, the expansion of the global market is driven by all these variables.

Europe is expected to grow at a CAGR of 5.7% during the forecast period. Germany, the United Kingdom, France, Italy, Spain, Russia, and the rest of Europe make up Europe. Increased consumption of healthy foods and beverages results from growing health and fitness awareness. The gap between out-of-home tea and coffee consumption is closing thanks to increased commercial tea consumption. RTD tea is primarily consumed in Germany and the United Kingdom Europe. The increase in tea and coffee drinkers is fueling the growth of the RTD tea market in Europe. A further factor driving the expansion of the RTD tea market is the rise in concerns about health and body image, which has prompted people in this region to adopt green tea as a healthy beverage to fight obesity. Due to the various nutrients and numerous health advantages they offer, green tea is currently gaining popularity among European consumers. Popular flavors include herbal and ginger. Numerous nutrients found in tea, including vitamins, amino acids, flavonoids, and trace minerals, improve metabolism, lower cholesterol, and prevent cancer.

China, India, Japan, South Korea, Australia, Indonesia, Pakistan, and the rest of Asia-Pacific are all included in the Asia-Pacific RTD tea market analysis. In 2019, China held the largest market share in the Asia-Pacific RTD tea industry. One of the world's leading tea producers in China. A new RTD tea called Meco Fruit Tea was also introduced in 2018 by Xiangpiaopiao, a Chinese company primarily involved in the research, development, production, and sale of milk tea products, to diversify its product offering in China's non-milk tea beverage market. Due to the widely practiced tea culture in nations like China, India, and Japan, the RTD tea market is expanding significantly in Asia-Pacific. Due to its widespread appeal and affordable price, black tea is expected to experience the most significant increase in demand in the region compared to other product categories. Since consumers are becoming more health-conscious and drawn to healthy products, the market for RTD tea is anticipated to grow. Additionally, improvements in taste and flavor will create new commercial prospects for the local market.

Brazil, Argentina, the United Arab Emirates, Nigeria, South Africa, Turkey, and the rest of LAMEA are all included in the LAMEA RTD tea market analysis. In 2019, Argentina's 23.0% market share in the LAMEA RTD tea market was the highest. The RTD tea market is predicted to experience growth thanks to innovation in various flavors. Increasing disposable income fuels the demand for RTD tea, so market players have introduced fresh and inventive flavors to meet the rising consumer demand. Additionally, a rise in the number of people who value their health is fueling the RTD tea market's expansion in LAMEA. Brazil's growing urbanization has resulted in a significant shift in consumer lifestyle and eating patterns. This has caused the urban population to switch over to RTD drinks, which significantly aids in the market's expansion. Additionally, it is anticipated that the market will expand in the upcoming years due to an increase in RTD tea consumption among Brazilians and manufacturers' promotional advertising campaigns for organic RTD tea.

Segmental Analysis

The global ready-to-drink (RTD) tea market is segmented by type, category, and distribution channel.

Based on type, the global ready-to-drink (RTD) tea market is bifurcated into green tea and black tea.

The black tea segment is the highest contributor to the market and is expected to grow at a CAGR of 5% during the forecast period. The most popular tea consumed worldwide is black tea. It is a fully oxidized tea with a more robust flavor than other teas that have undergone less oxidation. Additionally, it contains polyphenols, vitamins, proteins, carbohydrates, trace elements, and alkaloids like caffeine, theobromine, and theophylline. Additionally, it helps to maintain and improve intestinal microflora and contains high levels of antioxidants, which reduce the risk of free radical damage.

The withered and oxidized leaves of the Camellia sinensis plant are used to make green tea. This tea originated in China, but thanks to its high polyphenol and antioxidant content, it has become popular worldwide. As the most minor processed type of tea on the market, green tea also has several health advantages, including aiding in weight loss, maintaining heart and mental health, and improving digestion. Furthermore, it has been shown to lessen UVB radiation damage and tumor growth. The green tea segment is anticipated to experience exponential growth during the forecast period. This can be attributed to increased workplace preference for green tea to stay energized and to health and fitness awareness.

Based on category, the global ready-to-drink (RTD) tea market is bifurcated into organic and conventional.

The conventional segment owns the highest market and is expected to grow at a CAGR of 5.2% during the forecast period. Inorganic RTD tea is the name given to conventional RTD tea. As the ingredients used to make traditional tea are less expensive than those used to produce organic tea, it is anticipated that the conventional segment will hold a larger market share than the organic segment. Due to an improvement in living standards and increased awareness of the health benefits of RTD tea, such as its high polyphenol content, which primarily consists of flavonoids and catechins, conventional RTD tea has become more prevalent in recent years. Increased café culture, rising disposable income, shifting taste preferences, and introduction of new flavors with more nutritious ingredients are additional factors supporting the market's expansion.

Ingredients from organic sources are grown organically and are subject to FDA regulation. Natural resources are used to create organic products devoid of dangerous chemicals. RTD tea ingredients are grown organically, with hazardous chemicals strictly prohibited. Over the past few years, the demand for organic RTD tea has increased due to greater awareness of the many advantages that organic products have over their synthetic counterparts.

Based on distribution, the global ready-to-drink (RTD) tea market is bifurcated into supermarkets/hypermarkets, specialty stores, and online stores.

The supermarket/hypermarket segment is the highest contributor and is expected to grow at a CAGR of 4.90% during the forecast period. Most RTD tea is bought in large retail settings like supermarkets and hypermarkets. Supermarkets are big, self-serve grocery stores with a wide selection of food and household goods. They are more significant than regular grocery stores but more minor and have a smaller selection of goods than hypermarkets or big-box markets. A hypermarket is a type of retail establishment that sells a broader range of goods than a supermarket, including food, groceries, and merchandise, all under one roof. The preference for supermarkets and hypermarkets as places to buy goods is increasing in both developed and developing markets, driving the growth of the supermarket/hypermarket segment.

A specialty store is a retail establishment selling a broad selection of products and related goods. Specialty shops provide high-quality, added-value goods that are typically expensive. Customers buy tea products from specialty shops to take advantage of the knowledgeable staff's recommendations. In addition to offering customers higher service quality and professional advice, most specialty store business operators maintain considerable depth in the type of product that they specialize in selling, typically at premium prices.

Recent Developments

• November 2022- Neo, its next-generation "Coffee Shop at Home" experience, was introduced by Nescafé Dolce Gusto.
• August 2022- Danone declared the issuance of a Euros 600 million, 10-year bond with a coupon of 3.071%. This offering allows Danone to increase its funding flexibility while extending its debt maturity, keeping with the company's active liquidity management.