The global fruit tea market size is expected to reach USD 5.1 billion by 2027, expanding at a CAGR of 9.6% over the forecast period, according to a new report by Grand View Research, Inc. Shifting preference of consumers toward healthy and caffeine-free beverages is boosting the demand for the product across the world. Fruits teas have become a popular out-of-home beverage among health-conscious consumers and are gaining more traction as compared to the traditional black tea.
Amidst the global pandemic crisis and the indefinite lockdown across nations, the consumer food & beverage industry first witnessed high demand for household staples, healthy food items, and consumables with longer shelf lives. The demand for frozen food products, fruits & vegetables, eggs, flour, and whole grains, among others, witnessed a considerable increase during the early stages of the crisis. Presently, most companies in the industry are faced with low consumption of their products and supply chain challenges. The companies are focusing more on altering their supply chains in order to reinforce their online presence and delivery measures, in an attempt to adapt to the present business environment. The changes in consumer buying behavior and the dynamic shifts towards online and D2C distribution channels may have serious implications on the near future growth of the industry. Our team is diligently working towards accounting these factors in our report with the aim of providing you with the up-to-date, actionable market information and projections.
In terms of product, the conventional segment accounted for over 80% of the market share in 2020. The dominance of this segment is majorly attributed to its affordability and easy availability. However, the organic product segment is projected to expand at the fastest growth rate over the forecast period owing to rising number of health-conscious consumers.
Considering the growing demand for organic products, manufacturers are introducing new products in order to tap the emerging market. For instance, in October 2020, Hain Celestial launched an organic wellness product, TeaWell, which includes delicious flavors with health benefits. These products are available in different fruit flavors including elderberry, grape, and lemon, which enhance immunity and wellbeing of the consumers. In addition, global food and beverage companies such as Nestlé and Coca-Cola are also entering the market with organic product lines in order to appeal to the consumers.
The key competitors in the fruit tea market include R. Twining and Company Limited, Stash Tea, The Bigelow Tea Company, Dilmah Ceylon Tea Company PLC, TIESTA TEA, and Bettys & Taylors of Harrogate Ltd. The companies are launching innovative products in order to expand their business and gain a competitive edge in the market.
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North America is anticipated to expand at the fastest CAGR of 10.5% from 2020 to 2027. Increasing popularity of the product in U.S. and Canada has widened the opportunity of manufacturers in the region. As a result, in June 2018, Unilever’s Lipton brand introduced two new flavors, watermelon and mango, under its fruit-infused iced tea bags for U.S. consumers.
Further key findings from the report suggest:
- North America is expected to witness fastest CAGR from 2020 to 2027 in light of growing demand for healthy beverages among millennials in U.S. and Canada
- Asia Pacific dominated the fruit tea market in 2020, accounting for more than 35% share of the global revenue. This dominance is attributed to increased popularity of these products as healthy drinks among consumers in countries including China and Taiwan
- Online distribution channel is expected register a CAGR of 10.6% from 2020 to 2027 owing to it rising popularity for providing extra-convenience and easy access of products to the consumers
- Major players in the market include Harney & Sons Fine Teas, R. Twining and Company Limited, Tata Consumer Products, Hain Celestial, Stash Tea, and Unilever. New product development is expected to remain as a critical success factor for the industry players.
The global fruit tea market size was valued at USD 2.4 billion in 2020 and is expected to expand at a CAGR of 9.6% over the forecast period. Growing popularity of fruit flavored tea products with low caffeine content among health-conscious consumers is expected to remain a key driving factor for the industry. Furthermore, shifting consumer preference toward customized tea gift sets along with growing importance of healthy lifestyle is expected to boost the demand for fruit teas across the world.
Millennials and wellness enthusiasts, who have become selective about their dietetic choices, constantly explore new varieties and flavors of fruit tea products, which is expected to have a positive impact on the market. Furthermore, both occasional and daily tea consumers are gradually shifting toward fruit-infused products owing to their numerous health benefits.
Fruit teas are more popular among young population as they are likely to prefer specialty beverages such as green tea and fruit tea as compared to old age population. Over the past few years, the buyers have become concerned about the origins of products’ ingredients owing to increasing awareness and consciousness among consumers across the globe. As a result, the manufacturers are focusing on more informative and detailed packaging to attract such customers.
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In addition, with growing awareness about harmful effects of plastic packaging, consumers now prefer more environment-friendly packaging options. Considering this shifting inclination toward eco-friendly packaging, the manufacturers of this industry, including Harney & Sons and R. Twining and Company Limited, have introduced products in recycled packaging options.
The conventional product segment dominated the market with more than 80% of the total fruit tea sales in 2020. Factors such as easy accessibility and affordability of conventional products are playing an important role in maintaining the segment’s market position. On the other hand, the demand for organic products is increasing remarkably across the world owing to growing concerns of consumers regarding health. Consumers are considering organic products as a healthier option as they do not contain any chemicals, fertilizers, pesticides, herbicides, or fungicides.
Organic products are generally grown on small-scale biodiverse farms, whereas conventional products are cultivated with mono-cropped and large-scale plantation methods. As a result, organic products are more expensive than conventional ones. However, health-conscious consumers are willing to pay a high price in order to avoid harmful chemicals. In September 2016, Coca-Cola Great Britain introduced a range of organic teas under the brand name Honest. This range includes different fruit flavors such as lemon, orange, mango, pomegranate, and blueberry.
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The offline distribution channel held the largest share of the market in 2020 and contributed to over 80% of the total revenue. This segment includes supermarkets, discount stores, department stores, teahouse, grocery stores, and health food stores where the consumer can taste the fruit tea flavors and make an informed purchase. Among these offline stores, supermarkets and discount stores account for majority of the market sale. In addition, the exclusive availability of teas in these stores also explains their dominant position. Over the past few years, specialist retailers or teahouses are gaining popularity, especially among millennials, who seek authentic teas with unique flavors.
Online channel is anticipated to expand at the fastest growth rate, registering a CAGR of 10.6% from 2020 to 2027. Companies such as Glenburn Tea Direct and Teabox are using online platforms to supply fruit tea products. These firms have established a business model, where they ship unbranded products directly to the international consumers sourced from the manufacturers. Implementation of this business model results in the reduction of transit time and preserving product’s freshness.
Asia Pacific dominated the global fruit tea market in 2020 with more than 35% share of the total revenue. China is the largest producer and consumer of fruit tea in the world. Over the past few years, consumers in the region have been exploring fruit and floral-infused beverages due to which the demand for the product has witnessed significant growth in the region.
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Grand View Research has segmented the global fruit tea market on the basis of product, distribution channel:
Fruit Tea Product Outlook (Revenue, USD Million, 2016 - 2027)
- Conventional
- Organic
Fruit Tea Distribution Channel Outlook (Revenue, USD Million, 2016 - 2027)
- Offline
- Online
About Grand View Research
Grand View Research, Inc. is a U.S. based market research and consulting company, registered in the State of California and headquartered in San Francisco. The company provides syndicated research reports, customized research reports, and consulting services. To help clients make informed business decisions, we offer market intelligence studies ensuring relevant and fact-based research across a range of industries, from technology to chemicals, materials and healthcare.
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