What is Driving the Iced Tea Market’s Growth?

Introduction

The iced tea market is anticipated to surpass US$ 6,753 million in 2024 and is likely to attain a valuation of US$ 12,132 million by 2034, expanding at a CAGR of 6.0% from 2024 to 2034 (link).

Health and Wellness Trends

With the global shift toward healthy lifestyles, customers increasingly prefer items supporting their wellness aspirations. Iced tea, especially when marketed as a natural, low-calorie choice with possible health advantages from tea antioxidants and polyphenols, takes advantage of this trend.

Premium and Artisanal Products

Premium and artisanal items are becoming increasingly popular across various industries, including beverages. This trend is reflected in the iced tea industry, where premium, handcrafted blends made from top-quality tea leaves and botanicals are introduced.

Key Takeaways

• The global iced tea market size expanded at a 5.70% CAGR from 2019 to 2023.
• The powdered mixes segment holds 43.3% of market shares in 2024.
• The retail segment captured 54.3% of market shares in 2024.
• The market size in the United States is projected to rise at a 4.3% CAGR through 2034.
• The market size in Germany is anticipated to develop at a 5.1% CAGR through 2034.
• The market size in Japan is estimated to surge at a 3.7% CAGR through 2034.
• The market size in India is expected to increase at a 7.3% CAGR through 2034.

Competitive Landscape

The iced tea market is highly competitive, featuring significant competitors such as Nestle, Coca-Cola, and PepsiCo. These giants dominate due to their global reach and brand awareness. Harney & Sons and The Republic of Tea target the luxury category, while regional competitors like Arizona Beverage and Snapple cater to local tastes.

Recent Developments

• In February 2024, Tilray Brands, Inc. introduced two new ready-to-drink cold brew iced tea beverages under its premium cannabis wellness brand, Solei.
• In October 2023, the Indian functional beverage business Beyond Water debuted the nation’s first ready-to-drink (RTD) iced tea.

Ready-to-Drink Iced Tea Gaining Momentum

Compared to just ten years ago, the world of RTD beverages has drastically changed. Sales of soda are down while sales of water are increasing, and words like “craft,” “cold brew,” and “natural energy” have become widely used, partly because Millennials are still the main drivers of RTD beverage growth.

Expanding Customized Demand for Natural Ingredients

Consumers are looking for functional beverages that are appealing and ready to go, whether it is through the use of natural ingredients like turmeric or the addition of protein. Herbal teas, which are caffeine-free, provide a special combination of flavors and advantages.

Conclusion

The iced tea market is set for significant growth, driven by health and wellness trends, premium product offerings, and increasing consumer demand for natural and functional ingredients. Companies that innovate and cater to these trends are likely to capture a larger share of the market.