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The functional tea market size is projected to increase by USD 3,348.54 million and the market size is estimated to grow at a CAGR of 6.4% between 2022 and 2027. In 2017 the size of the market was valued at USD 7,424.80 million.
This functional tea market report extensively covers market segmentation by distribution channel (offline and online), type (herbal tea, fruit tea, flower tea, and others), and geography (North America, APAC, Europe, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges.
One of the key factors driving the global functional tea market growth is the health benefits of functional tea. The health benefits include improved immunity, hence protection against cold, and better digestion. Some other functional tea products and their health benefits are Yerba mate, Hibiscus tea, Lemongrass tea, and Chamomile tea. Yerba mate is rich in antioxidants and nutrients, boosts energy and immunity, improves mental focus and physical performance, helps to lose body fat and weight, and lowers blood sugar levels and the risk of heart diseases. Hibiscus tea is rich in vitamin C and contains flavonoids, reduces blood sugar levels, lowers blood pressure, aids in digestion, helps in reducing menstrual cramps, and keeps the liver healthy.
Moreover, the lemongrass tea is rich in inflammation-fighting compounds such as disorienting and chlorogenic acid, helps in relieving anxiety and pain, lowers cholesterol levels, prevents infection, boosts oral health, and increases the red blood cell count. Chamomile tea is rich in flavonoids, helps in reducing menstrual pain, lowers blood sugar levels, and helps with relaxation and sleep. Therefore, growing awareness among consumers regarding the health benefits of functional tea is likely to propel the growth of the market during the forecast period.
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Our researchers analyzed the data with 2022 as the base year, along with the key trends, and challenges. A holistic analysis of drivers, trends, and challenges will help stakeholders in the value chain refine their marketing strategies to gain a competitive advantage.
Premiumization of functional tea products is one of the key trends of the functional tea market. Premium functional tea products are marked with quality assurance stamps from the USDA and others, which regularize the product quality. Several vendors in the global functional tea market offer functional tea products under the premium category. For instance, Numi offers a product line of Premium Matcha green tea in two flavors called Citrus Matcha and Ceremonial Matcha.
It also offers Petite Bouquet, which is a tea box with four different flowering tea products. Flowering tea buds offered in this box include Dragon Lily, Sunset Oolong, Lavender Dream, and Golden Jasmine. Therefore, the premiumization of functional tea products is expected to propel the growth of the market during the forecast period.
One of the key challenges to the global functional tea market growth is the availability of counterfeit functional tea products. These types of products are leads to an uneven competitive scenario among genuine functional tea vendors. The counterfeit functional tea products lack quality and are priced lower than genuine products. Several instances of manufacturing and sales of counterfeit tea products, including functional tea products, have been seen in the global market.
For instance, a drug processing laboratory was raided by the Malaysian police in the Seberang Prai Selatan district of Malaysia. Drugs and more than 1000 fake herbal tea boxes were seized by the police from the facility. Consumers are often misled by similar product names and packaging as that of products of established brands, especially in APAC countries, such as China, India, and Thailand, and in Middle Eastern countries, such as the UAE, Saudi Arabia, and Qatar. This may hinder the sales of genuine functional tea products during the forecast period.
The market research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Functional Tea Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The functional tea market report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
Based on type, the market has been segmented into herbal tea, fruit tea, flower tea, and others. The herbal tea segment will account for the largest share of this segment. Herbal tea is witnessing high demand among health-conscious consumers as it has a higher proportion of antioxidants compared to other forms of tea. A variety of herbal tea products are available with different ingredients such as leaves, tree bark, plant roots, seeds, and various spices. The ingredients used in functional herbal tea have medicinal properties that help in curing body ailments, thereby leading to significant demand for functional herbal tea among health-conscious consumers. Some of the commonly used herbs in functional tea are linden leaf, holy basil, peppermint, and fennel. Various vendors offer herbal tea products in the global functional tea market.
The market share growth by the offline segment will be significant during the forecast period. Offline distribution channels play a significant role in the functional tea market, as they provide consumers with the opportunity to physically see, touch, and sample the products before making a purchase. These channels also allow for personalized customer interactions and the assistance of knowledgeable staff who can provide recommendations and answer product-related queries.
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The offline segment was valued at USD 4,711.99 million in 2017 and continued to grow until 2021. The offline segment of the global functional tea market refers to the distribution and sale of functional tea products through physical retail channels, such as brick-and-mortar stores, supermarkets, specialty tea shops, and health food stores. This segment involves consumers visiting physical locations to purchase functional teas rather than making purchases through online platforms or e-commerce websites.
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North America is estimated to contribute 32% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The increasing awareness about health and wellness among consumers is also increasing the demand for functional tea in North America. For instance, in 2020, a significant proportion of the total tea consumption in North America was contributed by functional tea, which included herbal tea and fruit tea. Also, the increasing adoption of functional tea in the tea bag format is positively influencing the growth of the market in the region.
In 2020, the outbreak of COVID-19 affected the market in countries such as the US and Canada. However, the initiation of vaccination drives led to the resumption of business activities in the functional tea market in the last quarter of 2020. This resulted in the restoration of the supply chain and the reopening of manufacturing units of functional tea in the region, which stabilized the growth of the market in 2021. Also, vendors are increasingly adopting e-commerce channels to increase their sales in the region. Thus, all these factors are expected to propel the growth of the regional functional tea market during the forecast period.
The functional tea market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Functional Tea Market Scope |
|
Report Coverage |
Details |
Page number |
165 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 6.4% |
Market growth 2023-2027 |
USD 3,348.54 million |
Market structure |
USD Fragmented |
YoY growth 2022-2023(%) |
5.78 |
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
Performing market contribution |
North America at 32% |
Key countries |
US, Canada, China, Germany, and UK |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
Arteasans Beverages LLC, Associated British Foods Plc, Barrys Tea, ekaterra, Godrej and Boyce Manufacturing Co. Ltd., Harney and Sons Fine Teas, Herbaty Szlachetne Sp. z o. o, MJF Exports Pvt. Ltd., Numi Inc., ORGANIC INDIA Pvt. Ltd., PHARMADUS BOTANICALS S.L, Tata Sons Pvt. Ltd., The Hain Celestial Group Inc., The Organic Merchants, The Republic of Tea Inc., and Tiesta Tea Co. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Distribution Channel
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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