Organic Tea Market

Organic Tea Market: Overview

The market size for organic tea was USD 378.5 million in 2021, and it is projected to grow at a CAGR of 15.9 percent during the forecast period. The growing importance of flavonoid-based food and beverages, which have antioxidant properties, is anticipated to enhance the market scope over the forecast period. Furthermore, increasing concerns about the harmful effects of cadmium on human health are anticipated to expand the scope of nutritional goods derived from organic crops. Organic tea has multiple benefits. Through several studies, it has been found that such products are helpful in upgrading digestive health. It also assists in improving the activity of healthy bacteria in the gut, thus upgrading gut health. Furthermore, organic tea is known to contain theanine, which decreases the high level of anxiety. It also intensifies relaxation by reducing drowsiness and lowering the heart rate. Such products contain caffeine, which fuels the focus and attention of the human body.

In developing countries, the consumption of organic tea is on the rise due to the growth in lifestyle-related diseases. Consumers today are on the lookout related the effects of their food & beverage consumption owing to health consciousness and body detoxification. This leads to increased consumption of organic tea to meet the requirement. Along with its medical application, the rich taste of organic tea has been favored globally, generating a positive impact on the organic tea market. However, the lack of awareness between the population and higher prices compared to non-organic tea is anticipated to affect the market growth.

Manufacturers of organic tea are investing heavily in the research and development of new and innovative variants of teas that meet the requirement of modern consumers who seek herbal, natural and clean label products. These companies have introduced functional products that prioritize wellness, sustainability and health. This has played a critical role in shaping the overall growth of the players in the organic teas market. For instance, in March 2020, Typhoo enhanced its organic herbal tea segment by adding three new products, immunity-boosting tea and purifying super green and digestive power seeds. Furthermore, In November 2019, Ajinomoto General Foods Inc., another key player in the organic tea market, announced a joint venture in Japan with Accenture plc, a global technology leader.

Organic Tea Market: COVID-19 Impact

COVID-19 did contribute to growing the market for organic tea. People preferred to utilize the non-store-based segment to get their products at home as they were not leaving their homes owing to the governments' precautionary instructions for COVID; the store-based segment was not broadly preferred. Furthermore, once the situation stabilized, the store-based distribution channel segment continued its normal sales rate. However, the impact on the manufacturing unit was significant in the early months of 2020 due to the high demand; the supply rate could not keep up.

Organic Tea Market: Drivers

Growing Knowledge Regarding Healthfulness & Safety of Organic Products to Fuel Market Growth

Consumer awareness regarding clean-label foods, including pesticide-free commodities, primarily drives the growth of the market around the globe. In the past few years, organic tea production has considerably increased due to the perceived higher quality of organically grown tea and the benefits for environmental and human wellbeing. Furthermore, organically grown tea sales are anticipated to have improved price realization and uplift the socio-economic condition of tea producers. The increasing awareness regarding food safety and growing demand for organic food and beverages in the global market has led to advancements in organic farming in several regions worldwide. Organically grown tea contains more catechins, including epicatechin, epicatechin gallate, and epigallocatechin gallate, compared to conventional black tea. The growing health consciousness of consumers related to the healthfulness of organically grown tea against the harmful effect of conventionally produced tea fuel its demand in countries including the U.S., Japan, Germany, and other European countries.

Increasing Demand for Specialty Teas to Fuel Market Growth

Modern-day tea consumers are actively looking for high-value specialty teas due to the emerging trend of natural, organic, clean-label, and healthful products. Consumers are also more aware of different types of tea and their origins and seek an authentic experience while drinking tea. Millennials actively search for healthy teas, which has necessitated producers of innovative tea blends, flavors, and ready-to-drink teas. Moreover, the growing knowledge of the healthful characteristics of organically grown tea would significantly contribute to the growing demand for organically grown tea. Sustainability has become a popular trend in the developed market of North American and European markets, which is anticipated to drive the growth of the organically grown tea market in the foreseeable years.

Organic Tea Market: Restraints

Increase in Utilization of Coffeeto Hamper Market Growth

The major restraints of this market are an increase in the trend of coffee utilization and fluctuating raw material prices caused by unpredictable climatic conditions. On the other hand, the market is predicted to enhance due to the growing demand for herbal tea and the introduction of new organic tea flavors and kinds. Furthermore, the industry's key players have embraced a marginal pricing strategy, which is anticipated to stifle overall market growth. The market's growth is also anticipated to be hampered by a lack of awareness about organic teas.

Organic Tea Market: Segment Overview

Tea Bags Segment to Generate Largest Share Due to its Easy Storage & Portability

The tea bag segment is anticipated to hold a prominent share in the global organic tea market during the forecast period. The increasing popularity of convenience and portable food & beverages has contributed to the strong growth of the organic tea bags segment around the globe. Due to its easy preparation process, teabags form holds the largest organic tea market share. The growing trend of on-the-go healthy hydration and ready-to-drink beverages has substantially facilitated the growth of the tea bags segment globally. Consumers nowadays seek innovative flavors in a range of organic tea types. The accessibility of tea bags for such various flavors permits consumers to carry assorted tea types along with them, enabling them to consume these teas on the go. The food packaging industry is developing rapidly owing to ongoing research, development, and innovations. Food grade packaging is a novel packaging type that assures the safety of packaged foods. The increasing utilization of food-grade tea bags has enhanced organic tea manufacturers to capitalize on the modern consumer trend of safe packaging. The increasing availability of different flavors of these teas in teabag form is expected to boost the segment's growth during the forecast period.

Rising Awareness Regarding Healthy Lifestyles Dominated Market

The herbal tea segment is expected to witness the fastest growth during the forecast years. The rapid growth is attributed to rising awareness regarding healthy lifestyles among generations X, Y, and Z. A vast number of product variants are available under the categories, such as chamomile, peppermint, ginger, hibiscus, eBrazilcea, rooibos, sage, lemon balm, rosehip, and passionflower. For instance, in October 2021, Hybrid Green Tea launched A- Grade herbal teas to improve lifestyle. The company developed tea mixes that assist in staying in shape at all times, ensuring that all products are dependable, hygienic, and secure.

Organic Tea Market: Regional Landscape

North America to Dominate Market due to Growing Preference for Natural, Safe and Clean-Label Products

The North American market is exhibiting robust growth owing to emerging trends such as consuming natural, safe and clean-label products. Consumers in the region are becoming more aware of the welfare and ethnicity of the healthy food they choose to consume. The trend of useful organic beverages in the U.S. and Canada augmented the market's growth in North America. The growing focus on developing and introducing innovative organic tea variants in novel packaging is anticipated to fuel the regional market growth during the forecast period. For instance, in October 2019, Celestial Seasonings introduced TeaWell, a product line that combines organic wellness tea with a potent blend of health benefits and exquisite tastes. The range includes a variety of flavors created utilizing a mix of herbs and botanicals. These products' "Daily Wellness Core" combines four vital ingredients: dandelion root, elderberry,  Panax ginseng and green rooibos.

The Asia Pacific market is showcasing substantial growth due to the growing discretionary incomes among consumers in the region. Consumers in China, India, Japan, and Indonesia have now started spending more on healthful products. The increasing popularity of green and herbal tea to upgrade beauty and health is primarily fuelling the market growth in the region. This tea is considered to be healthier as compared to conventional tea variants. The rapid expansion of the food and beverage industry in the region has also importantly contributed to the market growth in the Asia Pacific.

Global Organic Tea Market: Competitive Landscape

In January 2019, Mindful Inc. launched a ready-to-drink organic electrolyte tea. The company has been focused on producing next-generation functional products for consumers that prioritize health, wellness, and sustainability. Furthermore, in October 2019, Yogi Tea announced the acquisition of a leading company, Choice Organic Teas. This acquisition has authorized the company to enhance its presence in the market. Moreover, in September 2019, East West Tea Company acquired the brand Choice Organic Teas. This acquisition will allow the company to enhance its presence in the global market.

Few of the players in the organic tea market include Bombay Burmah Trading Corporation Limited (Wadia Group), Davidson's Organics, Hälssen & Lyon GmbH, Little Red Cup Tea Co., Mighty Leaf Tea Company (Peet’s Coffee Inc.), Numi Inc., PepsiCo Inc., Stash Tea (Universal Tea Company, Inc.), TIELKA Pty Limited and The Hain Celestial Group, Inc.

Regional Classification of the Global Organic Tea Market is Described Below:

North America

• U.S.
• Canada

Europe

• Germany
• France
• Spain
• U.K.
• Italy
• Russia
• Rest of Europe

Asia Pacific

• China
• Japan
• India
• Southeast Asia
• Rest of Asia Pacific

Latin America

• Brazil
• Mexico
• Rest of Latin America

Middle East and Africa

• GCC
• South Africa
• Rest of Middle East and Africa