2015 continued to be a year of growth for the United States tea industry. While not all sections grew equally, the overall market shines and consumer interest, particularly from the Millennials and our old friends, the Baby Boomers, will ensure that tea is on the front burner for years to come.
Today, the United States is now the third largest importer of tea in the world, after Russia and Pakistan, according to statistics from ITC (International Tea Committee). We are only out of second place by some 9,000 tons (19,841,000 pounds), which is a small amount when considering the amount of tea traded in the world. We are still the only western country to grow in tea both imports and consumption.
Overall Market Continues to Grow; RTD and Specialty Tea Lead with Highest Growth Rates
The overall market continues to grow in the U.S., and for 2015 we estimate the total market growth to be around 4 – 5%. Looking forward, total retail sales for tea are expected to have a CAGR of some 5 – 6% over the next 5 years, according to Beverage Marketing Corporation.
Ready-to-drink tea still is the powerhouse, representing more than half the market in sales and growing some 4 – 6%. Growth here is varied, with the more premium teas advancing 5 – 7% and the more generic, low priced teas holding steady with little or no growth. Along with the portable convenience of RTD tea, the growing demand of health conscious consumers, is a predominant force driving its popularity.
Specialty Tea continues to be the star, as consumers exercise their grazing tendencies and their ATMs by trying offerings of high cost, unique and single origin teas. We are seeing the highest growth rates with RTDs and specialty teas, with specialty teas enjoying an 8 – 10% growth rate. Consumers, particularly Millennials, are becoming more engaged with products as they find delight in the discovery of new and differentiated flavors, ethnic or new cultural offerings and craft selections. Specialty tea sits in the bullseye of their target.