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The herbal tea market size is estimated to grow at a CAGR of 4.94% between 2022 and 2027. The market size is forecast to increase by USD 885.1 million. The growth of the market depends on several factors, including the wide availability of substitutes, the rising cost of raw materials, and limited consumer awareness.
This herbal tea market report extensively covers market segmentation by type (green, black, and yellow), distribution channel (offline and online), and geography (APAC, Europe, North America, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The wide availability of substitutes is notably driving the market growth, although the rapid growth of e-commerce may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The wide availability of substitutes is notably driving the herbal tea Market growth. The demand for herbal teas is increasing due to the increase in health-conscious consumers. Herbal teas improve blood pressure and circulation, increase good cholesterol and lower bad cholesterol. Herbal teas are often marketed for their perceived health benefits, such as reducing stress, improving sleep, and boosting immunity. Consumers are looking for more convenient ways to consume herbal teas, including ready-to-drink formats and single-serving tea bags.
Herbal tea makers are experimenting with new flavor combinations and ingredients to create unique and varied blends that cater to the diverse tastes and changing preferences of consumers. As consumers are becoming more conscious of the environmental impact of herbal tea products, they seek out herbal teas that are sustainably sourced and made without the use of harmful chemicals. The demand for herbal tea is increasing, which will boost the growth of the market during the forecast period.
Rising demand for products with health benefits is a key trend influencing the herbal tea Market growth. Changing consumer preferences for online sales channels are having a positive impact on the growth of the market. The prevalence of online distribution channels in Tier 2 cities in emerging markets such as India and China is creating opportunities for vendors in the market to expand their product range. As consumers become more health-conscious, the demand for herbal teas is expected to grow. Online channels offer consumers a wide range of products at discounted prices. Demand for herbal products in online sales channels has increased steadily in recent years. This trend is driven by several factors, including the growing interest in natural and alternative medicines, the convenience of online shopping, and the increasing availability of quality herbal products online. Online sales of these products increase as consumers have access to a wide variety of products from around the world, including rare and hard-to-find herbal teas.
Online retailers often provide detailed product information and customer reviews so consumers can make an informed decision about which products to purchase. Another advantage of buying herbal tea products online is that they are often cheaper online than in traditional brick-and-mortar stores. With less overhead, online retailers can offer lower prices and often offer promotions and discounts not available in brick-and-mortar stores. It also improves convenience by allowing consumers to pick up their orders or have the product delivered to their doorstep. This is especially beneficial for consumers living in areas with limited access to herbal tea products. Overall, demand for herbal tea products in online sales channels will continue to grow as consumers increasingly turn to natural and alternative medicines and online retailers continue to improve their products and services. Therefore, the growing popularity of e-commerce will have a positive impact on the growth of the market during the forecast period.
The rapid growth of e-commerce is challenging the herbal tea Market growth. Due to the availability of several prominent herbal tea alternatives, such as regular milk/tea, fruit-infused water, energy drinks, juices, and other healthy beverages, vendors can face challenges. These alternatives are readily available in the market in a variety of forms at affordable prices. Despite the growing popularity of herbal teas, consumer awareness of the potential health benefits and uses of the various herbs used in such teas is still limited. Consumers should be educated about the benefits of tea and the different blends available to drive demand.
In addition, millennials are expected to be the major customer base for the herbal tea market as they make up the bulk of the current workforce. Also, the market lacks standardization regarding the quality, purity, and potency of the herbal ingredients used. This can lead to fluctuations in herbal tea quality and affect consumer confidence in the product. Herbal teas also face stiff competition from other beverage categories, such as coffee, energy drinks, and flavored waters. Manufacturers must find ways to differentiate their products and appeal to health-conscious consumers. Therefore, the availability of numerous alternatives will hamper the growth of the market during the forecast period.
The 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 Herbal 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.
BARRYS TEA: The company offers different types of tea products, such as loose black tea, green tea, fruit and herbal tea, and other types of tea.
The 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.
The market share growth by the green segment will be significant during the forecast period. Green tea holds the highest share of the market. Consumption of functional teas and herbal teas has gained momentum in recent years as young consumers opt for health and wellness products like herbal teas. Vendors in the market offer innovative products with new ingredients. The demand for green herbal teas is growing with the increasing availability of different flavors and increasing consumer awareness of the health benefits associated with the products.
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The green segment was valued at USD 1,472.10 million in 2017 and continued to grow until 2021. Consumers prefer high-quality green tea with natural or organic ingredients that provide the health benefits they need. Premium herbal tea products carry quality seals from certification bodies such as the United States Department of Agriculture (USDA) and other certification bodies that ensure product quality standards. In addition, as lifestyles change around the world, consumers are becoming more health-conscious and prefer high-end beverages such as herbal teas to improve their health. Therefore, wealthy consumers will choose premium herbal tea products even if they are expensive. Therefore, the change in consumer lifestyles will increase the demand for green herbal teas, which will lead to growth during the forecast period.
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APAC is estimated to contribute 39% to the growth of the global herbal tea market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
APAC dominated the market with a high market share in 2022. Consumers in APAC are health conscious, driving demand for herbal teas. Due to the increasing disposable income of consumers in this region, there is a clear bias towards premium products. Global and regional herbal tea suppliers are growing their consumer base in APAC by increasing their e-commerce presence, especially through third-party online vendors such as Amazon.com Inc (Amazon). The rise in internet penetration and the rising trend towards online shopping in the region have also contributed significantly to the growth of the market. In developing markets such as China and India, e-commerce vendors are offering discounts to boost sales of various food and beverages, including herbal teas. Therefore, such factors are expected to drive herbal tea sales in APAC, boosting the growth of the market during the forecast period.
In 2020, the outbreak of the new coronavirus infection had a negative impact on the global economy and various industries, including the food and beverage industry. To curb the growing number of COVID-19 cases many countries across the world imposed strict lockdown restrictions, disrupting supply chain activities in most industries. All this negatively impacted herbal tea sales in the first half of 2020. However, demand from online channels increased as consumers rapidly shifted to online purchases. However, in the first half of 2021, the start of massive COVID-19 vaccination campaigns by the governments of India, China, and Japan reduced the number of COVID-19 cases. Since then, lockdown restrictions have eased, and offline stores in the region have reopened, spurring demand for herbal teas. Hence, increasing online penetration of herbal tea had a positive impact on the growth of the market during the forecast period.
The herbal 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.
Technavio categorizes the global herbal tea market as a part of the global soft drinks market within the overall food and beverages sector. The global soft drinks market includes segments such as carbonated drinks, juices and juice concentrates, bottled water, functional drinks, and sports drinks (plant-based drinks, prebiotic and probiotic drinks, soy-based beverages, dairy-based beverages, and specialty beverages). Technavio calculates the global soft drinks market size based on the total revenue of soft drink manufacturers.
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Herbal Tea Market Scope |
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Report Coverage |
Details |
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Page number |
150 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 4.94% |
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Market growth 2023-2027 |
USD 885.1 million |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
3.77 |
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Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
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Performing market contribution |
APAC at 39% |
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Key countries |
US, China, India, UK, and Germany |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Associated British Foods Plc, BARRYS TEA, Bigelow Tea, FAVA TEA CO., Full Leaf Tea Co. LLC, Green Earth Products Pvt. Ltd., Harney and Sons Fine Teas, Lake Missoula Tea Co., MB Holding GmbH and Co. KG, Mother Parkers Tea and Coffee Inc., Mysooru Tea Co., Nestle SA, Organic India, Tata Consumer Products Ltd., The Boulder Tea Co., The Hain Celestial Group Inc., The Mark T. Wendell Tea Co., Vahdam Teas Pvt. Ltd., Veda Tea Co., and Yunnancraft |
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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 |
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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 Type
7 Market Segmentation by Distribution Channel
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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